Britannia Club: Key trends on bulk carrier claims

Bulk carriers make up more than 40% of the world’s fleet capacity, making it essential to closely monitor trends and recurring issues associated with these cargo types, Britannia Club highlighted in its ‘Bulk Carrier Claims Review 2025′. 

As explained, the Club has reviewed claims data of the years 2021 – 2024 for all bulk carriers carrying bulk or breakbulk cargo. This period was focused on to avoid the distorting impact of the COVID pandemic and to obtain the most recent claims data available.

According to Britannia, results showed that the most common claim types are:

• shortage
• physical damage
• contamination
• wet damage

Shortage

Shortage claims remain a substantial issue, with around 50% of registered claims relating to shortages.

It is perhaps unsurprising that paper shortage claims occur. The accuracy of measuring the quantity of bulk cargo loaded, transported, and subsequently discharged is imperfect. The two main methods used, draft survey and shore scale, are not comparing like with like, and differences are inevitable.

Similarly, the process lends itself to sellers and buyers of cargo either over or under measuring cargo to boost margins, usually to the detriment of the carrier.

There are also examples of actual shortages occurring, either due to poor cargo handling processes or deliberate pilferage. 

As shortage claims made by receivers may often be without merit, it is useful to identify regions (and some countries) by percentage of shortage claims recorded. 

• North and West Africa combined accounts for almost 44% of the Club’s recorded shortage claims. Notably, Algeria and Morocco together account for 27% of the global shortage claims. In East Asia, China accounts for most shortage claims, equating to 14% of the global total. This can be partly explained by China’s dominance in the import of bulk cargoes.
• Within South America (16% of the total), Brazil is the notable outlier with around 9% of global shortage claims. Again, perhaps reflected in the vast size of the country.
• Many claims are without merit, occurring even when the carrier has loaded and discharged all cargo without incident. It is therefore imperative that the ship’s crew and ship owners do all they can to avoid errors and maintain vigilance when conducting cargo operations.

Damage

Physical damage

For this category, the focus was on damage to material due to some external effect or the specific characteristics of the cargo. There are also cases of moisture damage recorded, where the crew failed to ventilate when they should have, differentiating from situations where moisture was added inappropriately.

According to Briatnnia, breakbulk cargoes contribute a substantial number of physical damage claims at around 57% of the total.

• Of this 57%, steel cargoes incur the highest number of physical damage claims. Notably, steel cargoes are often found to have existing damage or are damaged after discharge from the ship and before arriving at the receiver. It is therefore key that the ship maintains detailed records of the cargo condition before loading, during carriage, and at the point of discharge.
• Stowage and securing failures are often found during investigation of damage to breakbulk cargoes. The ship’s approved Cargo Securing Manual must be always followed, and the appropriate use of good quality dunnage is necessary.  
• Bagged rice makes a substantial sub-category within breakbulk cargo. Rough handling by stevedores and damage by sweat are the most common causes of damage to bagged rice. Britannia Club recommends documenting the standard of dunnage used and maintaining a close watch on the handling by stevedores. Ventilation of bagged cargoes in general can be difficult due to limited ventilation channels, but it remains imperative that ventilation take place following the appropriate rule, including during the hours of darkness if the conditions are correct.

Another area of concern is the over stowing of breakbulk cargo, where the bottom tier of cargo cannot withstand the accumulated weight above. The Club recommends that the shippers and charterers confirm that the load bearing weight has been calculated and is acceptable for the intended voyage.

Agricultural cargoes are prone to damage from heat and moisture. Soya bean cargoes have made up the majority (59%) of damage claims in this category, most often when discharging in China. Specific problems are known on the Brazil–China trade, where the product is often shipped in an unstable condition, with high moisture content, followed by a longer than optimal voyage to disport.

Contamination

Cargo can be contaminated by various sources and at various stages of a voyage. Britannia has found that the source of 68% of the contamination claims were from shore or third parties, with shipboard sources forming the remainder of incidents.

Internal leaks are the most common cause of contamination among shipboard sources. To differentiate this damage type from the category ‘Wet Damage’, internal leaks are defined as instances where bilge water, bunker fuel, and ships hydraulic oil have caused the contamination. Almost all these cases could have been avoided by thorough inspection of pipework, regular maintenance and strict operating procedures.  

• Insufficient hold cleaning between cargoes is normally identified prior to loading, however when this has been missed or not found, the cost can be substantial. In one cargo of cement the previous cargo was a grain cargo, and upon arrival at the discharge port, seeds were spotted on the surface of the cargo, having fallen from hold structures during the laden voyage. This resulted in the cargo being initially rejected until remedial work including removal of all seeds had been conducted, at considerable expense and delay to the cargo operation. It is recommended that adequate pictures are taken of the cargo holds post cleaning for future reference.
• Furthermore, cross contamination can occur when cargoes with detrimental characteristics to each other have been deliberately loaded into the same hold. These claims typically involve insufficient physical separation between bulk cargoes or bagged cargoes that have burst, mixing their contents.

There are also examples of ship-sourced material, such as rust or paint flakes being discovered within a cargo, necessitating costly remediation activities. Regular inspection of cargo holds, and maintenance of coatings is necessary to reduce the chances of this type of issue.

Of the 68% shore/third party contamination claims, 14% were successfully identified by the ship’s crew before or during loading, resulting in rejection of the cargo, and/or the ability to successfully reject claims.

The alertness of the crew and documentation of cargo condition and shore loading equipment remains a central role. This is further borne out when considering that existing contamination of the cargo was proven to be present in 41% of the incidents, meaning there remains much room for improvement in early detection. 

…Britannia Club highlighted. 

Moreover, stevedore rough handling and equipment malfunctions were responsible for 18% of the claims. Infestation by insects and rodents are additional contaminants that are best prevented by good hygiene practices, close examination of dunnage provided, and following the fumigators instructions.

Wet damage

Internal leaks are the single largest cause of wet damage claims. The recorded cases were principally caused by leaking or unsecured ballast tank lids, corroded ballast pipework, and breached (cracked, punctured, etc.) ballast tank structures. Regular inspections of ballast tank vent lines, pipe work, and cargo hold perimeters are a good method to identify any areas of concern. Prompt maintenance when evidence of corrosion or leakage is seen can prevent cargo damage. Hydrostatic testing of ballast tanks during ballast voyages is a useful method to identify leaks in a controlled environment. Documenting maintenance and tests provides good evidence of a shipowner’s due diligence.

• Rain is a regular source of wet damage claims. Water is very often detrimental to all cargo types, and where cargo is liable to damage by wetting, we do not recommend cargo handling in any rain, including through cement holes as is often offered by ports and charterers.
• Rain damage also commonly occurs due to delays in closing hatch covers due to equipment failure, or obstructions preventing closure. The Club recommends adequate weather forecasting, closure of non-working hatches, and regular maintenance and testing of cargo gear and hatch cover equipment to ensure reliability.
• It is also important to inspect cargo and dunnage for signs of wetting, as they are often stowed outside and therefore subject to the elements. Wet dunnage can cause moisture damage to any susceptible cargoes stowed in the same hold, and when pre-existing wet damage is documented, it makes a substantial difference in defending a claim.
• External leaks were predominantly due to encountering gale force winds and the resulting rough seas. The cases identified involved leakage through the cargo hatch covers, and in many of the cases there was further evidence found of insufficient weathertightness of the cargo hatch covers. Hatch covers and sealing arrangements must be regularly maintained following manufacturers’ instructions and regular testing should be done to ensure they remain in good, weather-tight condition. Details of maintenance and any hatch cover leak testing should be adequately recorded.

Where possible, weather routing may be used to avoid the worst effects of weather. As much evidence of encountering severe weather as possible should be obtained to assist defending a claim, including logbook entries, video and photographic footage, weather forecasts etc.

In several cases, insufficient cargo hold cleaning was also found to be a contributing factor, noting that cleaning should also include the cargo hatch coamings and drains. In some cases, previous cargo residues have blocked the coaming drains or prevented adequate weather tightness resulting in wet damage to the cargo. 

Ventilating when inappropriate for the cargo (e.g. many fertilisers), or when the atmospheric conditions do not meet the appropriate rule to allow ventilation are always detrimental.

source : safety4sea