MIG MLAANZ Seminar Series Sydney The Innocent Stevedore (or how I came to better understand the...

MIG MLAANZ Seminar Series

Sydney

The Innocent Stevedore(or how I came to better understand the Waterfront)

February 2007

Agenda

1. Introduction

Seminar objective Why the Innocent Stevedore?

2. Australian Stevedoring context The Transport Logistics Chain Principal locations Service providers Industry issues

3. Stevedoring risk management – key issues

4. Legal considerations for stevedores

5. Summary

6. Q&A Source: Patrick Terminals

But first – another great claim

1. Introduction – Seminar objective

Objectives To understand legal

claims in the context of Australian stevedoring industry

Opportunities to reduce claims involving the waterfront

1. Introduction – Why the Innocent Stevedore? Fact or fiction - does the Innocent Stevedore exist?

Stevedores’ place in transport/logistics chain exposes them to a variety of risks, many (not all) beyond their control.

Demands of transport/logistics chain require stevedores to invest heavily in Capital equipment Technology Facilities Trained labour Procedures

Customer demands drive stevedoring efficiency, costs and reliability

Stevedore’s requirement to balance these demands with safety and vessel/cargo care considerations

Stevedores may not be (quite) perfect, but above factors combine to require stevedores to invest heavily in risk management strategies to avoid WCI and vessel/cargo damage claims

2. The Australian Stevedoring Industry context - the Transport/Logistics Chain

Source: Sydney Ports Handbook, March 1995

2. The Australian Stevedoring Industry context - principal locations

Source: P&O Ports Ltd

2. The Australian Stevedoring Industry context - Australian stevedoring service providers

A. General Stevedoring Operators – Port coverage summary

Stevedore Ports

Toll Patrick

Cairns, Mackay, Gladstone, Port Alma, Brisbane, Sydney, Geelong, Melbourne, Adelaide, Albany, Esperance, Kwinana, Fremantle, Geraldton, Dampier, Darwin

P&O Ports

Brisbane, Newcastle, Sydney, Port Kembla, Melbourne, Geelong, Adelaide, SA Outports, Bunbury, Fremantle, Port Hedland, Darwin

Newcastle Stevedores Newcastle

Illawarra Stevedores Port Kembla


B. Terminal Operators – equipment overview

Stevedore/Port Brisbane Sydney Melbourne Adelaide FremantlePatrickPortainer cranes 7 8 6 N/A 4Straddles 17 33 35 N/A 0RTGs 0 0 0 N/A 0RMGs 0 5 0 N/A 0Forklifts 6 12 7 N/A 18

Dubai Ports WorldPortainer cranes 5 7 6 2 3Straddles 0 0 36 0 9RTGs 0 20 0 0 9RMGs 1 0 0 0 0Forklifts 23 0 0 0 8

Sources: VariousApprox estimated replacement value = AUD 715M


B. Terminal Operators – 2004/05 & 2006/06 5 Port Performance Indicator Summary

Indicator/Year 2004/05 2005/05

% Increase/Decrease

Ships handled 3,724 4,171 11%Total containers (units) 3,082,933 3,165,019 2.70%Crane rate 27.38 27.43 0.20%Vessel working rate 33.98 35.25 3.70%Crane time not worked (percent) 26.50% 22.80% -15.00%40' containers (percent) 40.50% 41.25% 1.85%Ship rate 46.1 45.58 -1.10%Throughput (per berth mtr) 108 111 2.70%Source: DOTARS Waterline Report Issue No.41 (12/2006)


B. Terminal Operators – the future outlook

Australia’s total containerised trade increased by 8% over the past 5 years is forecast to grow over next 20 years by 5.4% pa (from 5.2M TEUs to 14.9M TEUs in 2024/25 (286%)

Source: BTRA Working Paper 65 – ‘Container & Ship Movements through Australian Ports 2004/05 to 2024/25’: (08/2005)


B. Terminal Operators – the port interface

Source: SPC Handbook 2006

Transport/logistics chain efficiency driven by

player interfacesdistancelocationmode

The more interfaces, the more risk

Stevedores rely on performance of other players


Performance Reduce vessel turnaround time

berthing windows, minimise restows, increased equipment [cranes, straddles], improved technology (terminal management systems, automated yard equipment)

C. Industry issues

Reduce truck turnaround time Match R&D shifts to vessel working shifts Improved technology & processing (1Stop

VBS, PRAs) Improved terminal handling (efficient terminal

layouts, new equipment)

Maintain labour productivity Bonus vs OH&S/WCI Training, career opportunities


Competition Reduce costs/increased efficiency?

increased investment/labour, same throughput interface coordination (ships/terminal/trucks/train/cargo owners)

C. Industry issues

Source: Patrick Terminals


Future development Terminals

Reduced berthing windows/

larger vessels Improved stack density Improved road/rail interface Port land cost

C. Industry issues

Source: Patrick Terminals

Road/rail Increase rail capacity to 40% total

landside exchange Adequacy of track and road access Intermodal/inland terminal development Landbridging options – East/West,

Melbourne/Brisbane


Port Security Terrorism legislation Vessel/Terminal/cargo security/access Increased regulation: surveillance/disclosure

C. Industry issues

3. Stevedoring risk management - key issues

Managing the waterfront player mix – operational services

Vessels, terminal, trucks, trains, cargo owners: operating rules

Berthing windows VBS Rail windows PRAs

Vessels: fit for purpose

Labour: productivity vs safety Cargo care: security, safety (hazardous

cargoes/DG’s) Data: vessel stow plans, manifests, cargo

documentation – accurate & timely provision Storage: minimising terminal congestion R&D: reasonable cargo cutoffs

Gibson


Customer warranties

Is owner/authorised agent of vessel/container/goods?

Has customer accurately & fully described goods/containers & provided all necessary info/instructions re handling/care & control having regard to their nature?

Do goods/containers/vessel comply with all applicable laws & will customer provide stevedore with all assistance to enable compliance?


Customer warranties

Are goods packed to withstand ordinary risks of stevedoring?

Are customer vessel, containers, equipment in survey/fit & proper condition for stevedoring?

Has customer disclosed full description of any DGs or temperature controlled goods re stevedoring handling?

Will goods be removed within 3 days after discharge (unless otherwise agreed)?


Customer warranties

Will customer incorporate an effective Himalaya clause in the B/Ls, noting that stevedore will have benefit of the B/L provisions?

Will no other party make a claim against the stevedore other than the customer for stevedoring services?


Stevedore’s rights Entitled to deliver goods to bearer of

B/L

If stevedore believes goods are DGs or vessel/container/goods do not meet statutory requirements or are unsuitable for stevedoring, it may refuse to provide services or take appropriate measures to ensure compliance or safe to handle

Lien - stevedore can relocate or dispose of containers/goods not removed from wharf


Stevedores’ liability

Generally relates to stevedore’s negligent act/omissions

Excludes liability for inaccurate documentation

Generally excludes consequential losses

Subject to time bars (normally requires suit to commence 12 months from date of container/goods delivery or vessel arrival at facility or date of incident)

Force majeure

Broad definition Extends to include storm/wind damage

4. Legal considerations for stevedores Liability issues

Substandard vessel/container presentation Vessels: AMSA Marine Orders

Containers: when is a unit too old?

Reefer containers/cargoes Stevedores extensive reefer handling procedures

PRAs vessel manifests receivals monitoring


Liability issues

DGs/Hazardous Goods

non/mis-declaration – description, handling

inappropriate presentation, packaging or stowage

Inadequate container presentation

overloading poor packing insufficient cargo packaging

(protection & secural)

Truck damage

understanding terminal procedures

is truck suitable (ie, side lifters)?

5. Summary

Stevedores part of dynamic transport logistics chain

Relies heavily on other players’ performance – a 2 way street

Stevedores operate in certain legal framework, with obligations clearly identified

No new obligations, but details changing

Reduce risk of waterfront damage

Understand risks, improve procedures, educate staff

The innocent stevedore – your call!

Stevedores investing now for significant future growth

Focus on cost-effective service delivery Interest in OS&H & vessel & cargo care, with

minimised injuries, and minimised damage to vessels & cargo

MIG MLAANZ Seminar Series Sydney The Innocent Stevedore (or how I came to better understand the...

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