Marine

Our 6 values now have

meaningful symbols

attached to them

3. People

People

Develop true partnerships all

round. With our colleagues

across the company. Our

customers and associates

around the world. We exist to

build strong relationships based

on tolerance, understanding

and mutual co-operation. We

strive to develop our diverse

talent and reward excellence.

Symbolizing two or more people

or organizations working together

to realize shared goals. We do this

by sharing knowledge, learning and

building a consensus. The posture

and position of the figures signify

flying upwards together.

INSIDE THIS ISSUE:

∗ N-E-W-S

∗ PHOTO OF THE MONTH

∗ LEARN MORE

∗ KNOW YOUR CARGO

∗ BACK TO BASICS

∗

EDITOR’S NOTE: The New Year 2015 brings with it a new column in Marine Newslink styled “Learn more”.

Apart from write-ups on different types of cargo, readers had requested for something on

many commonly used words/phrases in Marine insurance. Hence, this addition. Glad to see

the number of right answers to the Question of the month going up. Should we introduce

some prizes for the right answers/best answers? Food for thought!

N-E-W-S Government exploring ways to boost cotton exports

NEW DELHI : Worried over decline in raw cotton prices, the Government has stepped

up efforts to find out new markets for the commodity.

The prices are declining because of a plunge in exports to its biggest market, China,

which had changed its policy on cotton imports. “Situation is very grim. India needs to

find ways to increase its cotton exports by exploring new markets. Government is seized

of the matter and is taking steps to stabilise the situation,”

India also needs to set up spinning and yarn units domestically and in countries like

Vietnam to boost exports of raw cotton and other value-added products. Recently a

team led by Commerce Secretary visited two cities of Vietnam. The South East Asian

nation is one of the biggest importers of India’s cotton and also an important centre on

spinning and yarn making. China has huge investments in this sector in Vietnam. In

December, the Government had eased cotton and cotton yarn export rules to boost

overseas sales as slowing demand from China has hit India’s trade in the commodity.

According to the USDA report, India the world’s second-biggest producer of cotton is

likely to export 7.69 million bales of the fibre in 2014-15 marketing year (August- July),

down by 35 per cent from last year due to sluggish demand from China.

China is the top cotton export market for India, followed by Bangladesh and Pakistan.

Newslink January 2015 – Volume 3 – Issue 3

FROZEN CONTAINER SHIP – This ship seems to lives up to its name.

Vessel icing may impair the safety & stability of a ship.

The ice adds to weight carried by ship and can also cause problems for usage of important ship equipment

like anchors and radars (rotating scanners can get jammed)

PHOTOS OF THE MONTH

WHAT IS DECK CARGO?

The phrase ‘deck cargoes’ refers to objects and/or commodities carried on the weather-deck and/or hatch-covers of a ship

and thereon exposed to sun, wind, rain, snow, ice and sea, so that the packaging must be fully resistant to, or the

commodities themselves not be denatured by such exposure. Even in RORO vessels, many areas above the actual ‘hold’

space can reasonably be considered as ‘on deck’ even though not fully exposed to the onslaught of wind and sea. The

combined effects of wind, sea and swell can be disastrous. Where damage and loss occur to cargo shipped on deck at

anyone’s risk and expense, the ship-owners, the master and his officers, and the charterers, must be in a position to

demonstrate there was no negligence or lack of due diligence on their part.

Deck cargoes, because of their very location and the means by which they are secured, will be subjected to velocity and

acceleration stresses greater, in most instances, than cargo stowed below decks. The risk is extensive and predominant.

The stowage, lashing, and securing of cargoes therefore require special attention as to method and to detail if unnecessary

risks are to be avoided.

CAUSES OF LOSSES

• Severe adverse weather conditions.

• Lack of appreciation of the various forces involved.

• Ignorance of the relevant rules and guiding recommendations.

• Cost limitation pressures to the detriment of known safety requirements.

• Incorrect/unbalanced stowage and inadequate weight distribution.

• Insufficient time and/or personnel to complete the necessary work before the vessel leave port.

• Dunnage not utilized in an effective manner.

• Inadequate strength, balance and/or number of lashings.

• Lack of strength continuity between the various securing components.

• Taking lashing materials around unprotected sharp edges.

• The perversity of shore-based labor when required to do the job properly.

• Securing arrangements, both supplied and approved, not fully utilized on the voyage under consideration.

This last point is particularly true of ISO freight containers and timber cargoes carried on the weather-deck, and of large

commercial vehicles carried in ro-ro vessels.

Unfortunately, despite all the loss-prevention literature available, there is a continuing incidence of the collapse and/or loss

overboard of deck cargo items. Losses continue of large vehicles, rail cars, cased machinery, steel pipes, structural

steelwork, packaged timber, freight containers, hazardous chemicals, boats, launches, etc.

GENERAL GUIDELINES

The Merchant Shipping set out some of the general ideas to be followed when securing deck cargoes. The list of

requirements is not exhaustive but provides a realistic base from which to work, and reads, inter alia:

Deck cargo shall be so distributed and stowed:

1) as to avoid excessive loading having regard to the strength of the deck and integral supporting structure of the ship;

2) as to ensure that the ship will retain adequate stability at all stages of the voyage having regard in particular to:

a) the vertical distribution of the deck cargo;

b) wind moments which may normally be expected on the voyage;

c) losses of weight in the ship, including in particular those due to the consumption of fuel and stores; and

d) possible increases of weight of the ship or deck cargo, including in particular those due to the absorption of water

and to icing;

3) as not to impair the weathertight or watertight integrity of any part of the ship or its fittings or appliances, and as to

ensure the proper protection of ventilators and air pipes;

4) that its height above the deck or any other part of the ship on which it stands will not interfere with the navigation or

working of the ship;

5) that it will not interfere with or obstruct access to the ship’s steering arrangements, including emergency steering

arrangements;

6) that it will not interfere with or obstruct safe and efficient access by the crew to or between their quarters and any

machinery space or other part of the ship used in the working of the ship, and will not in particular obstruct any opening

giving access to those positions or impede its being readily secured weather tight.”

LEARN MORE

Cotton is a soft, fluffy staple fibre that grows in a boll, or

protective capsule, around the seeds of cotton plants of the

genus Gossypium. The fiber is almost pure cellulose. The

plant is a shrub native to tropical and subtropical regions

around the world, including the Americas, Africa, and India.

The fibre is most often spun into yarn or thread and used to

make a soft, breathable textile.

The chemical composition of cotton is as follows:

a) cellulose 91.00%

b) water 7.85%

c) protoplasm, pectins 0.55%

d) waxes, fatty substances 0.40%

e) mineral salts 0.20%

Cotton is shipped in fully pressed bales, pressed to a

considerable density, without harm. Bales vary in size,

according to country of origin, in weights between 100 kgs

and 330 kgs., and are compressed to varying degrees,

strapped by steel bands or wire and covered with cotton,

jute or synthetic fibre, and sometimes plastic sheet.

There are four main factors to be considered when dealing

with raw cotton:

a) Grade – Cotton is graded by cleanliness or colour. Badly

ginned cotton contains more ‘trash’ – dirt, leaf, cut seed,

stains, etc., which means higher wastage for the spinner.

‘Stain’ is caused by climatic conditions during growing.

Lightning, for instance, will cause a yellow stain on the

mature bolls.

b) Staple – The length of the fibres. Evenness of fibre length

is an important consideration.

c) Micronaire – A term used to describe the thickness and the

maturity of the fibre.

d) Strength – the tenacity of the fibre at breaking point

tested by instruments such as Pressley, Stelometer or the

High Volume Instrument (HVI).

In addition to the long fibres, cotton also contains cotton-

linters. Cotton linters are fine, silky fibres which adhere to

the seeds of the cotton plant after ginning. These curly fibres

typically are less than 3 mm long.

Linters are traditionally used in the manufacture of paper

and as a raw material in the manufacture of cellulose. It is

also referred to as "cotton wool". This can also be a refined

product which has medical, cosmetic and many other

practical uses.

Shipment / Storage / Usage

Having regard to the main characteristics mentioned, and the

method of packing, there are five main causes of partial loss:

a) Fire

b) Water

c) Contamination

d) Burst bales

e) Internal damp

Fire

Cotton, either in dry or wet condition, is incapable in itself of

spontaneous combustion, except when the cotton will, and

does generate heat, but this temperature is far short of the

point of ignition. Fire to baled cotton is usually caused by

a) bursting of bands contacting other ferrous metal and

creating sparks,

b) smoking, cigarettes, matches, etc.,

c) electrical faults,

d) spread of fire from other commodities.

When baled cotton is involved in fire, the extinguishing of

the outbreak will leave a coating of charred cotton on the

exterior of the bale, varying in depth according to the density

of the fire. In most cases because of the density of the

pressed bale the in-roads into the bale by the fire are not

excessive, making for much sound cotton inside the bale.

Because of the make-up of the cotton fibre much oxygen

remains in a bale after pressing, and this allows, in many

cases, the rekindling of the fire, days or even weeks after

seemingly having been extinguished.

After the fire has been extinguished, the charred coating on a

bale of cotton (when dry) forms a hard surface of carbon,

which to a certain extent protects the undamaged interior of

the bale and further stops the interior cotton from taking in

more oxygen. Only in exceptional circumstances is it

advisable to break open bales when fighting a fire. Where

bales are damaged by fire and water, or water alone, it is

advisable to contact a reputable reconditioning firm with a

cotton press, have all the bales opened up and the damaged

cotton removed and sound cotton re-pressed. Loss would be

on the basis of value of damaged cotton, plus picking and re-

pressing charges. The grade in the salvaged cotton should in

no way be affected by this operation. Pickings may realize a

small salvage value.

KNOW YOUR CARGO - COTTON

Risk factors and loss prevention

Temperature

Cotton requires particular temperature, humidity and

possibly ventilation conditions (storage climate conditions).

At temperatures > 25°C, cotton dries out, becomes hard and

brittle and losses elasticity. The optimum temperature for

mold development is 25 - 35°C.

Cotton is subject to self-heating/spontaneous combustion.

In some cases, damaged cotton has been placed in

intermediate cold storage to prevent rot.

Humidity/Moisture

Cotton behaves strongly hygroscopically (hygroscopicity). It

must be protected from sea, rain and condensation water

and also from high levels of relative humidity, if decay,

discoloration, mold, mildew stains and rot are to be avoided.

Damage to cotton due to moisture is divided into "country

damage" and "heart damage.

"Country damage" may arise in the country of origin as a

result of water penetrating from outside or soiling with dirt,

mud or sand.

"Heart damage" arises as a result of compression performed

under excessively moist conditions during wrapping and is

not visible from outside. The cotton bales may swell by

absorbing water vapor, resulting in an increase in volume of

approx. 40 - 45%.

At a relative humidity of 95%, cotton may increase its water

content to 25 - 27% without feeling wet. Moisture levels

should be measured when a consignment is accepted.

Moisture-damaged bales must not be accepted.

Self-heating / Spontaneous combustion

Cotton has an oil content of 0.4 - 1.0% (waxes).

The auto-ignition temperature of oily cotton is 120°C.

Its high cellulose content makes cotton particularly liable to

catch fire through external ignition. Therefore, it must

always be protected from sparks, fire, naked lights and lit

cigarettes.

Fire-fighting is best performed using CO2.

Water must not be used for fire-fighting, since the swelling

capacity of the cotton fibers (40 - 45% increase in volume)

may cause damage to the hold or container walls.

Odour

Passive behaviour Cotton is sensitive to unpleasant or

pungent odours.

Contamination

Cotton is sensitive to contamination by dust, dirt, fats/oils

and rust as well as oil-containing goods, such as oil-bearing

seeds/fruits, copra, raw wool etc., Residues from previous

cargoes, such as ores, stones, coal, metal filings, fertilizers

etc., result in losses. Rust contamination may be caused by

rusty steel straps, among other things. Reddish-brown

discoloration of the bales indicates "country damage”.

Insect infestation / Diseases

Insects, in particular ants and beetles, may damage the bales

during storage ashore. So-called honeydew is deposited as a

secretion on the cotton by an insect (white fly). This

secretion contains sugar and makes the cotton fibers sticky.

Honeydew is barely visible to the eye.

Mold growth caused by heat and moisture may start even in

the cotton field. This leads to a reduction in value by staining

and discoloration due to rot.

Mold and bacteria change the color of the cotton to yellow,

yellow/green, orange, red to chestnut-brown and gray.

These variations may be observed after 3 - 4 weeks. Approximately 50% of world cotton production is destroyed by parasites

and diseases.

Container transport

Hydraulic pressing machines are used to compress ginned

cotton into bales of 160-170 kgs. These are wrapped in white

cotton cloth with 10-12 plastic straps to hold the bale. A

1X40FCL container can load up to 150 bales and

approximately 25 tons of cotton.

Cotton handling

In damp weather (rain, snow), the cargo must be protected

from moisture, since cotton is strongly hygroscopic and

readily absorbs moisture. This may lead to discoloration,

decay, mold, mildew stains and rot. In addition, the cotton

may swell by absorbing water vapor, resulting in an increase

in volume of 40 - 45%.

Do not use hooks for cargo handling, since they may lead to

sparking when they come into contact with the strapping.

Smoking is absolutely prohibited during cargo handling.

Cotton securing

The cargo is to be secured in such a way that the bales or

strapping are not damaged. Strapping is essential to

maintain compression of the bales during transport. If the

strapping is broken, compression is diminished, which results

in an increased supply of oxygen to the inside of the bales.

This in turn increases the risk of combustion or feeds a fire

which has already started. Bursting or chafing of the steel

straps and wires may lead to sparking and external ignition.

If you have any comments / feedback please send it to

R. Balasundaram Vijay Pal Singh

Vice President - Marine Marine Loss Control Manager - India

r.balasundaram@tata-aig.com vijaypal.singh@tata-aig.com

CONTACT US

Tata-AIG General Insurance Company Limited, Peninsula Business Park, Tower A, 15th

Floor,

G.K.Marg, Lower Parel, Mumbai 400013.

TEL: 022 66699697, FAX: 66546464.

www.tataaiginsurance.in

DISCLAIMER

The publication is for private circulation only. It is for internal additional information of employees and associates. Views expressed in the article are personal

views of author and the publisher, editor does not own any responsibility legally or otherwise. Though due care is taken to give accurate information, the

readers are advised to verify independently the correctness of the information given.

This month’s question:

Correct answers will get a mention in the next issue.

Question:

What is the difference in the definition of ‘Terrorism’ between the Institute Cargo Clauses of 1982 and

2009?

Last month’s QUESTION:

What is the difference in the Risks covered under ICC-B and Institute Coal clauses?

Answer to last month’s question:

Institute Coal clauses cover loss or damage to subject matter insured reasonably attributable to fire explosion or

heating, even when caused by spontaneous combustion, inherent vice or nature of the subject-matter insured.

The other coverage is the same as ICC-B except that “overturning or derailment of land conveyance” does not

find a place under Institute Coal clauses, implying it will be a port-to-port cover only.

Right answers from:

Mr. Sateesh Seethiraju - India Insure, Hyderabad

Mr. V.P. Mohankumar - Link-K Insurance Broker Co. Pvt. Ltd., Coimbatore

Mr. Santosh Varma - Kadel Insurance Brokers, Hyderabad

Mr. M.R. Udaykumar - Beacon Insurance Brokers Pvt. Ltd., Vadodra

Ms. Sangeetha Nambiar - Icare Insurance Broking Services Pvt. Ltd., Mumbai

Mr. Aloke Kumar Mukherjee - National Insurance Company Limited – Ex Employee

BACK TO BASICS