Cargo Loss or Damage

  P&I Clubs do not directly insure the cargo for loss or damage but they do insure shipowners or managers for their liability to cargo owners for loss or damage arising while the cargo is in the custody of the ship. Many cargo claims are prevented by good maintenance, careful handling, stowage and transportation.

General Procedures

    At the loading port

    Cargo is often damaged before shipment. If the damage goes unnoticed before the cargo is loaded and clean bills of lading are issued, receivers will claim against the ship owner for pre-existing damage. There are different reasons for pre-shipment damage and you should look out for the following:

    – cargo loaded with debris or foreign bodies;

    – cargo damaged or in substandard condition when loaded;

    – cargo exposed on the quayside prior to loading.

    β€’ if cargo is being loaded which shows signs of damage – stop loading and call the P&I correspondent. The mate’s receipts and bills of lading may have to be claused;

    β€’ if water-sensitive cargoes are carried, note in the ship’s cargo log the storage conditions prior to loading and method of delivery to the ship;

    β€’ if cargo is steel products, always arrange with the local P&I correspondent for a pre-loading survey. Cargo can also be damaged during loading:

    – by rain;

    – by the stevedores;


    – because the cargo hold or tank has not been cleaned properly or prepared for the cargo;

    – because it is stowed improperly or in the wrong location inside the ship.

    These last two causes are generally your responsibility.

    β€’ if cargo is loaded in the rain, stop loading and close the hatch covers. Note down the periods of rain when the hatch covers were open. It may be necessary to discharge wet cargo;

    β€’ if cargo is roughly handled by stevedores, protest and make a note of the damage;

    β€’ make sure cargo holds or tanks are clean and ready to receive the cargo – where possible inspect the spaces before loading. The fact that holds are passed by surveyors representing charterers or shippers is not enough to relieve the ship of liability if the holds are not in fact suitable for the cargo;

    β€’ check stowage before loading (ask for a stowage plan and find out the proposed location for stowage of heavy, hazardous or sensitive cargoes);

    β€’ if loading oil products or chemicals, witness any sampling, review the results of any tests on the samples, store the samples in a secure location – check for contamination.

    Cargo can be damaged during the ocean voyage because it has been stowed badly.

    β€’ always supervise stowage and insist upon changes if stowage is inappropriate, unsafe or likely to damage cargo. If in doubt, call the local P&I correspondent and ask for a surveyor to examine the stow.

During the voyage

    Damage often occurs during the voyage because of moisture or because the stow shifts.

    β€’ check lashings before departure and during the voyage. Check with charterers for ventilation and carriage temperature requirements (only ventilate when you are sure the conditions are correct).

    At the discharge port

    If cargo is found damaged on arrival at the discharge port you should:

    β€’ notify your owner or manager;

    β€’ immediately call the P&I correspondent and arrange the attendance of a surveyor;

    β€’ delay discharge until the nature and extent of the damage is found;

    β€’ if short-delivery or contamination is reported, contact the P&I correspondent: you will need a surveyor to witness any sampling or to calculate the shortage.


    Some wet damaged cargoes can give off gas. Access to cargo holds should be restricted until the hold atmosphere has been tested and declared safe.

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