UP IN FLAMES: THE EXPLOSIVE RISKS OF MISDECLARED HAZARDOUS CARGO IN SHIPPING CONTAINERS FOLLOWING THE MAERSK HONAM FIRE.
I. Introduction 259 II. Regulation of Hazardous Goods at Sea 261 III. Casualty Studies Involving Hazardous Goods 266 a. M/V Sea Elegance (2003) 266 b. M/V ZIM Haifa (2007) 267 c. M/V Hyundai Fortune (2006) 267 d. M/V Rickmers Genoa (2005) 268 IV.Risk Exposure, Liability & Supply Chain Complexity 269 a. The Carrier 270 i. The Carrier 270 ii. The Cargo Interests 270 iii. The Shipper and Intermediaries 270 b. Case Law Studies 271 i. M/V DG HARMONY 271 ii. M/V MSC Flaminia 273 c. Supply Chain Fact Pattern 279 V. Possible Solutions 281 a. Insurance 281 b. Blockchain and Electronic Bills of Lading 282 VI. Conclusion 285
On March 6, 2018, the Maersk Honam, a 2017-built, Singaporean-flagged, 15,262-TEU Ultra Large Container Vessel (ULCV) caught fire in the Gulf of Aden while traveling from Asia to Europe.(1) The vessel was carrying 7,860 containers and 27 crewmembers.(2) The fire tore through most of the containers in the forward part of the ship, along with some of the accommodation block.(3) Five crewmembers perished.(4) Preliminary estimates suggest that damage from this fire exceeded $1,000,000,000 USD.(5)
Maersk, as vessel owner, declared general average on March 9.(6) General average is a remedy available to vessel owners to obtain monetary contributions from owners of cargo on board their vessel for either (a) a sacrifice on the part of the ship or its cargo to preserve the voyage or (b) an extraordinary expense for the joint benefit of the ship and its cargo.(7) As a result, owners of cargo on board the Maersk Honam had to post a general average and salvage security bond equivalent to 54% of their total cargo's value before they could receive their container from the port of refuge in the United Arab Emirates.(8) Authorities are in the midst of an investigation and the cause of the fire remains unknown.(9) However, these types of large-scale, unexplained fires on board containerships can often be traced back to a single plight facing the maritime industry: improperly declared cargo. This is an increasingly prevalent problem. By one estimate, one-third of all containers in transit contain misdeclared cargo.(10) In the age of 18,000-TEU containerships, the hazards posed by this problem, and the specific hazard of misdeclared containerized goods resulting in devastating explosions and fires, cannot be ignored by the maritime industry.
This article will explain the international regulations governing containerized hazardous cargo and some of the attendant risks when such goods are misdeclared, draw on some recent case studies to examine the liabilities of different parties in a complex supply chain, and then propose some solutions to the problem of misdeclared hazardous goods in containers.
II. REGULATION OF HAZARDOUS GOODS AT SEA
The regulation of hazardous containerized goods is governed internationally by the International Maritime Dangerous Goods (IMDG) Code. The IMDG Code is intended to (a) properly lump hazardous goods into classes by the type of risk presented and (b) provide safe handling instructions for each class of hazardous goods. The Code is managed by the International Maritime Organization (IMO) and is published biennially to incorporate developments in the chemical, manufacturing, and maritime industries.(11) The Code is meant to complement both the Safety of Life At Sea (SOLAS) Convention and the International Convention for the Prevention of Pollution from Ships (MARPOL), and is applicable to all ships flying the flag of a signatory nation to the 1973 SOLAS Convention.(12)
The IMDG Code arranges hazardous goods into nine classes and sub-classes based on the type of risk posed by the substance's chemical composition and reactivity. These classes are Explosives (Class 1), Dangerous Gases (Class 2), Flammable Liquids (Class 3), Flammable Solids (Class 4), Oxidizing Substances and Organic Peroxides (Class 5), Toxic and Infectious Substances (Class 6), Radioactive Materials (Class 7), Corrosive Substances (Class 8), and a catch-all "Miscellaneous Dangerous Goods" category (Class 9).(13) All hazardous substances are listed by class type in Volume Two of the IMDG Code and are given a "Proper Shipping Name" and a four-digit United Nations (UN) number to ensure (at least in theory) that they are universally labeled correctly.(14)
In addition to classifying hazardous substances, the IMDG Code specifies proper packaging, labeling, handling, stowage, and emergency response protocols for every hazardous good listed and requires handlers of hazardous goods at all stages of the supply chain to undergo training on these packaging and carriage rules.(15) The Code also prohibits a carrier from accepting hazardous goods unless a Dangerous Goods Transport Document and a Dangerous Goods Container Packing Certificate accompany every container of hazardous cargo.(16) The Dangerous Goods Transport Document must list the cargo's UN number, Proper Shipping Name, a secondary description of the cargo, a class and division number, and packing instructions for the cargo.(17) It must also certify that the goods are packaged, labeled, and otherwise marked correctly.(18)
While the IMDG Code is intended to be a comprehensive, user-friendly resource, every new edition introduces greater complexity and inconvenience for shippers.(19) This causes confusion for those who are attempting in good faith to comply with the Code. It also provides unscrupulous shippers with an opportunity to circumvent the rules entirely, perhaps assuming that any downstream party attempting to verify the accuracy of a cargo declaration will themselves be overwhelmed by the Code.
The complexity of the IMDG Code is perhaps reflected in the most commonly misdeclared types of hazardous goods that pose risk of fire. Common household items like paints and aerosols are among the most routinely misdeclared types of cargo perhaps due to the seemingly innocuous nature of these goods whose true dangers may not be appreciated by infrequent shippers.(20)
Other hazardous goods may pose patent hazards to carriers, but their true dangers may not be accurately reflected in their IMDG Code classification. Charcoal is one such example. Charcoal, or carbon, is classified under the IMDG Code as a Class 4.2 hazardous material capable of spontaneous combustion.(21) As carbon mixes with oxygen in the air (creating carbon monoxide and carbon dioxide) it produces heat, which may become trapped within a shipping container and self-ignite as both temperature and oxidation rates increase.(22) However, not all charcoal products need be declared as Class 4.2 hazardous materials: if the charcoal was properly heat-treated it may pose little to no risk of self-heating and spontaneous combustion.(23) As a result, shippers, hoping to avoid cumbersome storage and testing documentation requirements for a Class 4.2 substance are incentivized to declare charcoal cargo as non-hazardous cargo bearing no procedural burdens. An example of this occurred in the case of the M/V Berge Charlotte, wherein a shipper declared a shipment of charcoal to be non-self-heating when it had reason to believe that it possessed all the characteristics of self-heating (and thus, hazardous) charcoal.(24)
Hazardous cargo risks under the IMDG Code involving nascent technology may present similar risks to the maritime industry due to the new and unacknowledged dangers posed by such cargoes. A good example here is lithium-ion batteries, which are the dominant technology in rechargeable batteries used to power most consumer devices ranging from smart phones and laptops to electric vehicles.(25) Lithium-ion batteries are classified as Class 9 ("miscellaneous") hazardous substances under the IMDG Code and consist of densely packed cells of lithium interacting through an anode and a cathode in a very contained medium.(26) For this reason, lithium-ion batteries possess an extraordinary energy potential and thermal runaway is a great possibility.(27) This is especially dangerous because lithium ion fires burn at extremely high temperatures, emit toxic fumes and flaming debris, and can easily reignite after appearing to be fully extinguished.(28) The danger this poses aboard a container ship on the open ocean is obvious. It is therefore imperative that lithiumion batteries be correctly declared, packaged, handled, and stowed in accordance with IMDG protocols.(29)
This imperative, of course, is not always fully heeded. Take for the example the recent case of the CMA CGM Rossini, which caught fire while transporting a cargo of used lithium-ion batteries.(30) An investigation revealed that the hazardous material declaration did not indicate that the cargo was used.(31) Furthermore, its packaging was inadequate.(32) While only the container of batteries caught fire, the fire burned at very high temperature for no less than four days.(33)
One of the most frequently shipped (and frequently misclassified) hazardous good that has been implicated in a number of fires and explosions aboard containerships in recent years is calcium hypochlorite. Calcium hypochlorite (Ca(C10)2), or Cal Hypo, is a common water purifier that is labeled as a Class 5.1 oxidizing agent under the IMDG Code.(34) At room temperature, Cal Hypo slowly decomposes, releasing chlorine gas, oxygen, and heat; higher temperatures accelerate this process.(35) If the heat is not able to escape, or if the oxygen is not able to ventilate properly, a chain reaction will cause what is known as "thermal runaway" wherein the substance's composition will continue to break down at an ever-increasing rate eventually resulting in an explosion or fire.(36) Decomposition is also accelerated by exposure to metals, moisture, or organic substances such as oil.(37)
As a result, the IMDG Code states that Cal Hypo should be stored in a cool, dry, well-ventilated space away from any radiant heat source and should not be exposed to heat in excess of 55[degrees]C for longer than 24 hours.(38) The International Group of Protection & Indemnity Clubs further recommend that Cal Hypo be stored in a clean plastic drum not weighing more than 45kg per drum, or 14 metric tons per container, with adequate air circulation.(39) It should only be stored on deck, be easily accessible by the crew, and be subject to further temperature-reducing measures if the prolonged ambient air temperature of the voyage is expected to reach 35[degrees]C.(40)
Shipping Cal Hypo in compliance with these regulatory measures is increasingly complicated and expensive and can result in substantial delays. Carriers can now charge shippers a premium for compliant cargo space on their vessels. Some carriers have even gone as far as prohibiting Cal Hypo from their ships altogether, further limiting available cargo space and increasing price for shipments. Coupled with the fact that global production of Cal Hypo is about 400,000 metric tons per year, shippers have an enormous incentive to misdeclare their Cal Hypo cargo.(41) Commonly used misdeclarations for Cal Hypo include: "BK powder," "calcium chloride," "bleaching powder," "disinfectant," "chloride of lime," and "chloridated lime."(42) None of these declarations provide adequate warning to carriers and crew about the hazards posed by this cargo. Consequently, Cal Hypo is often improperly packaged and stored on ships. As the casualty studies below reveal, misdeclaration of Cal Hypo and other hazardous goods can have devastating and costly consequences.
III. CASUALTY STUDIES INVOLVING HAZARDOUS GOODS
Over the past fifteen years, the container shipping industry has seen a number of catastrophic seaborne casualties as a result of misdeclared cargo. This section will briefly analyze four case studies: two involving misdeclared Cal Hypo, one involving poorly situated fireworks, and the final one involving an improperly packaged metal purifier. These cases illustrate the dangers of declaring a hazardous substance as something it is not; the compounding effects of an initial cargo fire or explosion on other combustible materials nearby; and the risks to ship, cargo, and crew that can result from a single item of hazardous cargo.
a. M/V Sea Elegance (2003)
On October 11, 2003, an explosion ripped through one of the cargo holds of the Singaporean-flagged container ship M/V Sea Elegance as it was about to dock in Durban, South Africa.(43) The explosion quickly turned into a massive fire that engulfed a large portion of the ship's container space.(44) Firefighting efforts by the crew proved fruitless and the captain gave an order to abandon ship.(45) One member of the crew was killed when he became separated from the rest of the crew during evacuation and was engulfed as fire spread throughout the ship.(46)
An investigation by the South African Maritime Safety Authority revealed that the cause of the initial explosion was misdeclared Cal Hypo.(47) As a result of this misdeclaration, the cargo and its container were not labeled or stuffed in accordance with IMDG Code requirements, as discussed in Section II. This container was stowed below deck next to the engine room, an obvious heat source for this volatile compound.(48) The Cal Hypo container was also stored near containers of rubber, plastics, and paper, causing the initial Cal Hypo explosion to morph into a large, devastating fire that was beyond the crew's ability to extinguish.(49)
b. M/V ZIM Haifa (2007)
Four years after the Sea Elegance fire, an eerily similar scenario unfolded on the Israeli-flagged ZIM Haifa in the Pacific Ocean. Here, a shipment of Cal Hypo was declared as "calcium chloride" and was again stowed below deck next to the engine room, presumably with similarly inadequate packaging and instruction to the crew as in the Sea Elegance case.(50) This shipment exploded two days after transiting the Panama Canal resulting in a fire that took days to fully extinguish.(51) The fire destroyed more than 100 containers with losses in excess of $3,000,000 USD.(52) It was revealed that the carrier had a standing policy not to accept any Cal Hypo cargo, which prompted the shipper to simply declare it as something else.(53)
The ZIM Haifa case, like the Sea Elegance, follows a common fact pattern: Cal Hypo is not declared properly, it is therefore not managed properly by the carrier, and it causes a serious maritime casualty, here the loss of one crew member, severe damage to the vessel itself, and millions of dollars of cargo destroyed.
c. M/V Hyundai Fortune (2006)
Like the Maersk Honam, the 1996-built, Panama-flagged M/V Hyundai Fortune was transiting from East Asia to Europe when it caught fire in the Gulf of Aden.(54) An explosion tore through the--somewhat ironically named--Fortunes, deck and, in addition to massive hull damage, caused 60-90 containers to fall into the ocean.(55) Seven containers full of fireworks ignited following the initial explosions, which gravely complicated firefighting efforts.(56) While the cause of the initial explosion was never determined, it appears to have originated from a container stored next to the ship's engine room.(57) One-third of the Fortune's containers were either burnt or lost overboard during the initial explosion, resulting in more than $800,000,000 in damage.(58)
It was estimated that ten percent of the lost cargo was uninsured.(59) The Hyundai Fortune case is an example of the chain reactions that can occur when a single container's cargo becomes volatile at sea.
d. M/V Rickmers Genoa (2005)
In March 2005, a Chinese manufacturer of a magnesium desulphurization reagent called SS-89 planned to ship 600 metric tons of this good to the United States.(60) SS-89 is used in steelmaking to remove sulfur impurities and will release highly flammable hydrogen gas when it comes into contact with water, especially saltwater.(61) This shipper packaged 600 metric tons of SS-89 into sacks that complied only with freshwater "dangerous when wet" regulations.(62) Although it was evidently properly declared, no evidence exists that the shipper informed its non-vessel operating common carrier (NVOCC) or the ocean common carrier about the dangers of SS-89.(63) Several days after departing China for the United States, the Rickmers Genoa collided with another ship and ruptured its hull, which caused seawater to flood into the hold containing the SS-89 cargo.(64) The SS-89 eventually exploded and a fire ensued causing a total loss to the SS-89 cargo, extensive damage to adjacent cargo, and further damage to the ship.(65) Litigation ensued in the United States District Court for the Southern District of New York that dragged on for years. (66) The Rickmers Genoa saga illustrates the need for shippers to adequately communicate the risks of their hazardous cargoes to all downstream parties.
As these casualty studies show, misdeclared hazardous cargo can cause massive damage to a vessel, its cargo, and its crew. (67) It can also expose a range of parties throughout the supply chain to legal liability.
IV. RISK EXPOSURE, LIABILITY & SUPPLY CHAIN COMPLEXITY
When misdeclared cargo causes a fire aboard a containership, as the previous casualty studies illustrate, numerous parties will be facing a variety of liabilities for cargo loss, vessel damage, and injuries or fatalities to crewmembers. When a fire engulfs a ship the size of the Maersk Honam, the dollar amount in damage can stretch into the hundreds of millions or even billions. This section will briefly outline the risks different parties will be exposed to and their likely courses of action after a massive cargo fire. It will then carefully examine two cases that have drawn published legal decisions in order to highlight how liability plays out in the aftermath of a major vessel casualty. Finally, it will discuss a fact pattern to illustrate the large number of parties involved in the container supply chain and how they may be able to reduce their own risk exposure through greater due diligence in combating misdeclared cargo.
a. The Parties
i. The Carrier
When fire strikes a containership, the first party to be affected is the vessel's owner, or the "carrier."(68) The carrier will be liable for damage to its vessel and injuries to its crew. Various overlapping insurance policies held by the operator--including a Hull & Machinery (H&M) policy covering damage to the ship, a Protection & Indemnity (P&I) policy covering liabilities to third parties such as the crew, and possibly even a separate pollution liability policy--are going to be invoked, as well as any number of excess policies. As in the Maersk Honam case, the carrier may well decide to declare general average and seek a pro rata contribution from all cargo interests whose goods survived the fire, in order to defray the cost of firefighting and cleanup, salvage and towing, vessel damage, and legal expenditures.
ii. The Cargo Interests
Cargo interests whose containers perished in the fire have one of two options: (1) make a claim against their cargo insurance or (2) sue the carrier and be stuck with the $500 per unit Carriage of Goods By Sea Act (COGSA) limit likely contained within their bill of lading with the carrier, which will probably not even come close to covering the full loss.(69) Cargo interests whose goods survived the fire may see their containers held as collateral until a general average contribution is posted, which may be a multimillion dollar expense depending on the value of that cargo.
iii. The Shipper and Intermediaries
Once an investigation determines that a particular container's cargo caused a fire or explosion, the carrier will no doubt seek compensation from that cargo's shipper.(70)
(68) In reality, at least one charterer will almost certainly be involved in renting out an owner's ship, but for simplicity's sake this bulletin will assume that parties with an ownership or operating stake in the vessel are one and the same.
(69) 46 U.S.C. [section] 1304(5) (2000).
(70) See Mark Russell and Charmaine Chu, Tackling Cargo Misdeclaration - A First Line of Defence Against Container Fires, GARD P&I CLUB (March 21, 2018), http://www.gard.no/web/updates/content/25186996/tackling-cargo-misdeclaration-a-first-line-of-defence-against-container-fires (stating that container charterers face "unlimited liability" if fire found to originate from their cargo).
Unfortunately, many shippers cannot be held financially accountable if they are a shell entity or are otherwise undercapitalized. In those instances, a carrier will likely invoke an indemnity provision in the relevant bill of lading to seek contribution from the intermediary--probably an NVOCC--that issued the bill of lading and who failed to adequately determine the nature of the relevant cargo.(71)
b. Case Law Studies
i. M/V DG HARMONY
The first case to be examined involving the liability of various parties is the case of the M/V DG HARMONY, an 1800-TEU container vessel that caught fire in 1998 as a result of an explosion involving the now-familiar substance Cal Hypo.(72) The DG HARMONY was owned by Navigator Shipping, a subsidiary of Safmarine & CMBT Lines and was registered in the Isle of Man.(73) It was chartered to DiGregorio Navegacao Limitada, which was part of the slot-chartering consortium Independent Carriers Alliance, which also included Cho Yang Shipping Co., DSR Senator Lines GmBH, Montemar S.A. Pan-American Independent Line, Zim Israel Navigation Co., and the now-defunct Hanjin Shipping Co., and was intended to facilitate liner services between the United States east coast and Brazil.(74) The vessel was managed by Leonhard & Blumberg, a crew and ship management company, and had a crew of 20 sailors at the time of the casualty.(75)
The DG HARMONY was traveling from New York to Brazil via Newport News, Savannah, and Miami.(76) The relevant cargo, 10 containers carrying 120 drums of Cal Hypo, was loaded at Newport News and was both manufactured and shipped by PPG Industries, Inc. (PPG).(77) Twelve days into the voyage the crew noticed a shudder aboard the DG Harmony accompanied by plumes of white smoke coming from the cargo hold.(78) The crew quickly determined that an explosion in the hold containing the Cal Hypo shipment had blown the hatch cover off and had ignited other nearby cargo.(79) Despite firefighting efforts by the crew, the fire eventually spread to the fuel oil tank further spreading the fire and causing additional explosions that forced the crew to abandon ship.(80) The fire burned for three weeks and caused extensive damage to cargo and to the ship itself; the DG Harmony was declared a total loss.(81)
Numerous lawsuits arose in this case by cargo interests, vessel owners, and charterers against a single eventual defendant, PPG.(82) These parties alleged that PPG was liable under strict liability, general negligence, breach of warranty, and negligent failure to warn theories under COGSA [section]1304, general maritime law, and New York law.(83)
A bench trial eventually determined that PPG's Cal Hypo shipment did indeed cause the relevant explosion and resulting fire as a result of thermal runaway. (84) The thermal runaway of the Cal Hypo was exacerbated by PPG's decision to (a) ship a freshly manufactured product that was still hot; (b) ship that product in large drums; (c) ship sealed drums that were stacked on top of one another; and (d) ship those drums in a container without adequate air circulation. (85) The trial court found PPG culpable for strict liability, general negligence, and negligent failure to warn of the hazards posed by Cal Hypo. (86)
The appellate court reversed the strict liability judgment on the grounds that COGSA, as interpreted by the case Senator Linie GMBH & Co. KG v. Sunway Line, Inc., only permits a manufacturer to be strictly liable when neither the shipper nor the carrier could have known of the dangerous properties of a cargo; this rule applies to charterers and third parties as well as the actual carrier. (87) Here, the carrier was indeed aware of the danger of heating posed by the Cal Hypo, so the plaintiffs' strict liability claim failed. (88) The appellate court also clarified the duty PPG owed the carrier to warn of the hazards posed by this cargo: the plaintiffs would need to show that (a) the shipper had a duty to warn because the cargo was dangerous in a way that the carrier could not have reasonably foreseen; (b) the shipper failed to provide an adequate warning; and (c) the failure to warn caused the resulting damage. (89) The appellate court found that PPG here did not provide a warning that described the risks presently, but remanded to determine whether the plaintiffs would have stored the cargo any differently if an adequate warning had been provided. (90)
The DG Harmony case is an example of a complex fact pattern involving the now-familiar substance Cal Hypo. This case stands for the proposition that it is equitable to ultimately hold the shipper liable for these types of incidents because the shipper was in the most practical position to be aware of a hazard and to notify the carrier. In that vein, the appellate court, in clarifying the rule of strict liability, apparently placed importance on the fact that the heating dangers of Cal Hypo were well known in the industry and were capable of being heeded by the carrier here. One may wonder how true this rule is (or how fair it would be) for emerging hazardous cargoes, like lithium batteries, or an obscure hazardous chemical whose dangers might not be fully realized within the shipping industry.
ii. M/V MSC Flaminia
Another recent example of a containerized cargo fire resulting in massive litigation is the case of the M/V MSC Flaminia. The Flaminia was traveling from New Orleans to Belgium when a cargo of divinylbenzene (DVB) exploded causing three deaths among members of the crew, destruction of several thousand containers, and significant damage to the vessel itself. (91) Claims for death and bodily injury settled quickly leaving only claims relating to cargo loss and vessel damage to be adjudicated by bench trial. (92)
The Flaminia was owned by a German conglomerate, Conti; was operated by another company, NSB; and was under time charter to the Mediterranean Shipping Company (MSC) at the time of the relevant casualty. (93) These parties sued the manufacturer and shipper of the DVB at issue, Deltech Corporation, and its NVOCC, Stolt Tank Containers, under various legal theories. (94) They were joined by a third-party manufacturer, Chemtura Corporation, which entered this litigation solely to establish that its cargo of diphenylamine (DPA), an exothermic substance stored near the DVB on the same voyage, did not contribute to the explosion. (95)
A bifurcated trial resulted in this case. The first phase of the trial was set to determine the cause of the DVB exploding. The trial court held that the DVB cargo, a Class 9 ("miscellaneous") hazardous good under the IMDG Code, was properly produced and packaged when it left Deltech's control. (96) The facts indicated that the relevant cargo was manufactured in Baton Rouge, Louisiana and spent 10 days sitting in direct sunlight at the New Orleans cargo terminal pier--where daytime high temperatures reached 96-98 degrees Fahrenheit--before being loaded onto the Flaminia. (97) Furthermore, the carrier's storage of the DVB cargo within close proximity to heated bunker fuel coils and a lack of proper ventilation in the hold contributed both to the high temperatures causing the DVB's thermal runaway and the inability of the hold to disperse hazardous gases released by the DVB's auto-polymerization. (98) The trial court finally found that firefighting efforts by the crew were the proximate cause of the explosion under the theory that a loose spark introduced by the firefighters mixed badly with flammable vapors compressed inside the unventilated hold. (99)
The second phase of the MSC Flaminia trial adjudicated the liabilities of the numerous parties in this case. The trial court ultimately apportioned 55% fault on the manufacturer/shipper, Deltech, and 45% fault on its NVOCC, Stolt.(100) The court found that Stolt had served as Deltech's NVOCC for years and had shipped numerous cargoes of DVB before. (101) Despite this substantial course of dealing, Stolt failed to adequately convey information to the carrier, MSC, regarding the heat-sensitive characteristics of the DVB cargo. (102) Deltech provided Stolt with a Material Safety Data Sheet (MSDS) that laid out several warnings about the DVB cargo, namely that it could auto-polymerize at high temperatures and release combustible gases, and must therefore be stored out of direct sunlight and other sources of heat. (103) Stolt failed to incorporate any of this information into its database entry for DVB and merely entered the substance's UN number, Proper Shipping Name, IMDG class number, and packing group. (104) Deltech also provided many of the same warnings that it included in its MSDS in its Booking Request for this particular shipment. (105) A Stolt employee failed to even look at these special instructions and instead merely searched Stolt's database which contained the inadequate entry for instructions relating to DVB--for information. (106) Had this employee noticed a discrepancy between the instructions on the Booking Request and those stored on the database, it would have been industry practice to contact Deltech to verify the correct instructions; the employee did not do this. (107) Stolt was also tasked with preparing a Dangerous Goods Declaration (DGD) with information provided in the Deltech's Booking Request, but it only included the following entry: "Environmentally Hazardous Substances, Liquid, NOS UN 3082, Class 9." (108) Finally, Stolt used a document specialist, BDP, to prepare the Master Bill of Lading for this shipment. (109) BDP included Deltech's warnings about heat sensitivity and storage instructions that Deltech listed in its Booking Request in a draft bill sent to MSC. (110) However, MSC sent back a return draft that did not include these instructions and BDP apparently failed to notice the omission and prepared a final Master Bill of Lading that included no warnings about heat. (111). Thus, none of Deltech's special instructions regarding this particular shipment were included on any of the documents sent by Stolt to MSC.
In addition to booking storage space for the DVB cargo on the MSC Flaminia and preparing transport documents, Stolt was also responsible for transporting the DVB cargo to the New Orleans container terminal and negligently arranged for the DVB to be filled into containers and deposited at the terminal when it was foreseeable that the cargo would be sitting in direct sunlight and intense heat for several days prior to its voyage. (112) Deltech was negligent in arranging shipment of the DVB out of New Orleans in late June (in violation of its own in-house procedures) when it had full knowledge that the cargo would be sitting outdoors for days in high ambient temperatures. (113) Deltech was also responsible for the premature filling of the DVB containers. (114)
The trial court apportioned no fault to the time charterer, MSC, because it was not privy to the specific conditions to which the DVB cargo at issue had been exposed, despite having general knowledge of DVB's heat sensitivity. (115) The owner, Conti, and its operator, NSB, were not liable because they provided a seaworthy vessel, properly crewed the vessel, and properly conducted firefighting operations when the DVB began to degrade. (116) Stolt's documentation department, BDP, bore no liability because, notwithstanding a breached duty to accurately list safety instructions, no evidence suggested that any party would have relied on information that BDP had failed to provide. (117) Furthermore, the DPA manufacturer Chemtura was not liable because it was not foreseeable that its cargo would be stored next to the already-unstable cargo of DVB. (118) Finally, the terminal operators at the Port of New Orleans were not liable because cargo was segregated on the pier by IMDG class and was otherwise stored consistent with industry practice. (119)
The trial court ultimately found Deltech and Stolt liable in tort, under theories of strict liability and negligent failure to warn. Deltech and Stolt breached their duty under COGSA [section]4(3) to warn of hazards of which the carrier could not have reasonably been aware. (120) The Court rejected Stolt's argument that because it warned MSC of the heat-sensitive characteristics of DVB in general it had satisfied its duty; rather, an NVOCC has a duty to warn the carrier of hazards specific to a particular cargo in order to satisfy its duty, namely that the DVB here had been exposed to unusually high temperature that would make it unstable. (121) The Court also used these facts in applying a line of Second Circuit cases to hold Deltech and Stolt strictly liable for the explosion. (122) Under COGSA [section]4(6), a shipper may be strictly liable for losses caused by the flammable, explosive, or otherwise dangerous qualities of cargo. (123) Under this rule, a carrier may invoke strict liability if it does not have knowledge that a substance may be combustible or unstable if heated. (124) The Court here was compelled to hold Deltech and Stolt strictly liable because MSC, while possessing general knowledge that DVB was a hazardous substance, did not know anything about the particular storage conditions that caused this exact shipment of DVB to pose an explosion risk. (125)
In addition to these tort claims, the Court also found against Deltech and Stolt on several contract-based claims. First, Conti, as vessel owner that declared general average, was entitled to a general average contribution from both Stolt and Deltech, pursuant to a clause in the Sea Waybill for the voyage here. (126) Pursuant to clauses in that same Sea Waybill, the Court also granted Conti, NSB, and MSC full indemnification from Deltech and Stolt for all damage, loss, and expenses arising from the explosion. (127)
The MSC Flaminia decisions, in addition to the appellate court ruling in the DG Harmony case, are the latest in the trend of high-profile containerized cargo explosion liability. As in the DG Harmony case, the Court saw fit to place sole liability for the loss on the shipper--here the DVB manufacturer and its NVOCC. The MSC Flaminia case is yet another example of the need for shippers to adequately convey the dangers of hazardous cargo to downstream parties and to thoroughly consider weather conditions at ports of departure to ensure that excessive sun exposure, among other risks, will not turn a relatively innocuous substance into a ticking time bomb. Shippers should be advised that such decision-making can be used against them at trial. This case also illustrates the need for shippers to select competent intermediaries who will sufficiently relay all warnings about a cargo to the carrier. In this case, with an NVOCC with a long-established course of dealing, it also highlights the need to regularly audit intermediaries to ensure that they are fulfilling their obligations to properly complete Material Safety Data Sheets and Dangerous Goods Declarations.
The DG Harmony and MSC Flaminia cases represent two useful examples of liability for hazardous cargo incidents and help illustrate how these kinds of cases tend to be litigated and the types of claims that are made against various parties. While neither case involves misdeclared cargo per se--the goods in both cases were properly declared as what they really were--the true dangers of the substances were not fully appreciable due to breakdowns in the notification system and the cargo posed the same risks to the ship and crew as completely misdeclared cargo would have. Therefore, the ultimate placement of liability by the Courts onto the respective shippers here seems justified.
On the issue of strict liability, the trial court in MSC Flaminia diverged from the Second Circuit in the DG Harmony case and found that the shipper there could be held strictly liable. The Senator Linie case, which the Second Circuit relied upon in DG Harmony, held that strict liability is proper when neither the shipper nor the carrier were aware of the dangers posed by the hazardous substance at issue. (128) The Second Circuit in DG Harmony held that the carrier was aware of the dangers posed by Cal Hypo. (129) The role of industry custom may explain this divergence. Cal Hypo's dangers, as this article has shown, are well known within the shipping industry. However, it is unlikely that DVB's risk of auto-polymerization is comparably well known; indeed, the risk here really came from specific storage conditions to which the DVB had been exposed that posed the hazard, not so much the substance itself. The role of strict liability should be even more pronounced when a carrier thinks it is carrying a completely different cargo than it is actually carrying.
c. Supply Chain Fact Pattern
The two cases discussed above dealt with cargo that was at least perfunctorily declared as what it really was. Now consider the following fact pattern borrowed from an actual case handled by The Standard P&I Club, which will illustrate the ease with which unscrupulous shippers can actively manipulate the global supply chain to more conveniently transport hazardous goods.
A Chinese manufacturer of calcium hypochlorite (Cal Hypo) sought to transport several containers of this substance aboard a vessel owned by a European entity and time chartered to an Asian shipping company. (130) The manufacturer contracted with a "shipper"--a shell corporation with no assets--to prepare booking documents for these containers, which listed the manufacturer as a separate company that did not actually exist. (131) The shipper also listed the cargo as "water treatment compound," one of the common misdeclarations for Cal Hypo. (132)
The shipper contracted with a legitimate freight forwarder, customs agency, and logistics company, who in turn forwarded the fraudulent booking documents to the time charterer's local shipping agent in China. (133) The time charterer's liner port agent - relying on the shipper's fraudulent booking documents - drafted a bill of lading identifying another non-existent company as the shipper, a freight forwarder at the cargo's destination as consignee, and the cargo as "water treatment compound." (134)
The original shipper then contracted with another legitimate freight forwarder to change the bill of lading to now correctly identify the cargo as "calcium hypochlorite," the original shipper as the shipper, a new party as consignee, and the previously listed consignee as the freight forwarder. (135) Shortly thereafter, the original shipper issued a material safety data sheet (MSDS) that again identified the cargo as "water treatment compound." (136) The original shipper also provided samples of the supposed cargo to a legitimate chemical testing company, which issued a certificate stating that the cargo was safe for transport. (137)
The Cal Hypo cargo was eventually stowed below deck on the carrier's ship and caught fire. (138) The fire spread to nearby containers full of flammable goods and caused a blaze that took days to extinguish. (139) No crewmembers were injured, but the fire extensively damaged the ship itself and adjacent cargo. (140)
The Standard Club identified five "red flags" in the booking process that could have detected this misdeclared Cal Hypo before it was improperly stowed on board the ship. First, the time charterer's local booking agent should have recognized "water treatment compound" as a common alias for Cal Hypo and should have alerted the charterer. (141) Second, a proper vetting process put in place by the logistics company would have indicated that the manufacturer listed on the booking documents did not exist and that the listed shipper was a shell company. (142) Third, checks in the system would have quickly detected the inconsistency between the shipper listed on the booking documents and the shipper on the initial bill of lading. (143) Checks would also have shown that the shipper on the bill of lading was a non-existent company and that the "water treatment compound" was a potential alias for Cal Hypo. (144) Fourth, checks in the system would have also detected the inconsistencies between the two bills of lading, which listed two different companies as shipper, two different companies as consignee, and the cargo as both "water treatment compound" and "calcium hypochlorite." (145) Finally, checks in the system would have detected the inconsistency between the cargo declarations in the final bill of lading and the MSDS and the testing certificate. (146)
In addition to highlighting the somewhat alarming ease with which an unscrupulous shipper can transport a hazardous cargo like Cal Hypo without proper declaration and deceive a relatively large number of intermediaries along the way, The Standard Club's case study also raises concern about the liability these numerous parties may be exposed to in the process. Recall that the original shipper here is a fraudulent entity with no assets. Following the fire, the carrier and its insurers would have been looking to recoup some of their losses from one or many of the legitimate intermediaries in the supply chain once it was determined that the actual shipper was judgment-proof.
V. POSSIBLE SOLUTIONS
In light of the endemic problem of misdeclared hazardous cargo in the containerized shipping sector, two overall proposals seem evident to combat this problem and to protect upstanding parties along the supply chain.
First, all parties should ensure that they are adequately insured to protect their own assets and to cover any third-party liabilities that may crop up. Carriers are required to obtain P&I policies to insure claims from third parties in the event of a fire. They are also going to have an H&M policy to cover their ship, as well as a pollution coverage policy that may be implicated depending on the extent of fire damage and cleanup efforts. However, these policies probably have limits that may not cover the full scope of risk posed by the danger of container fires. Carriers should take a careful look at their insurance coverage to determine all policy limits and any gaps in coverage.
Similarly, cargo interests should ensure that they have a cargo insurance policy to cover damage to their goods, as well as a separate general average coverage policy. (147) In the wake of the Maersk Honam general average declaration, the industry group iContainers released a statement highlighting the risks of uninsured cargo and the wisdom of obtaining an adequate cargo policy, along with excess policies as needed. (148) iContainers stresses that without one's own cargo policy, a shipper with fire-damaged cargo will be forced to wait in line for the carrier's P&I policy to cover their loss, rather than filing a claim with their own cargo insurer. (149) Furthermore, if the carrier declares general average, the cargo containers can be held as collateral until a bond is posted, delaying delivery for months, whereas a cargo insurer will pay to have cargo released almost immediately. Shippers of containerized cargo should ensure that they have their own cargo insurance policy with limits that cover the full cost of their goods.
Finally, as The Standard Club's case study illustrates, the supply chain for containerized cargo shipping is enormously complex and can involve any number of booking, customs, freight forwarding, and consigning entities between the shipper and the carrier. As in The Standard Club case study, these entities may be the unwitting pawns of a fraudulent, judgment-proof shipper of hazardous goods and may face suit when they allow hazardous cargo onto a ship that causes a fire. (150) Intermediaries should consider hiring a marine risk engineer to determine any weak links in their vetting procedures. (151) This will give intermediaries a greater sense of the adequacy of their current insurance policy limits and whether it may be a prudent investment to purchase an excess policy or a policy to cover an unexamined risk.
b. Blockchain and Electronic Bills of Lading
Second, while it is in the interest of all parties in the containerized cargo supply chain to be properly insured to cover the risks of fire damage, the industry as a whole is ultimately better served by preventing misdeclared hazardous cargo from getting onto a ship in the first place. As The Standard Club case study suggests, having a robust vetting and checks system, and "knowing your customer," will detect a great amount of fraud in booking documents and bills of loading. This is perhaps easier said than done, given the ever-increasing scale of the containerized cargo industry and the pressures on all parties in the supply chain to quickly move goods down the chain. A number of entities have attempted to introduce greater transparency to the supply chain in recent years, like Hapag-Lloyd's Cargo Portal, which provides real-time scans of booking documents for certain key words--for example, a declared cargo of "water treatment compound". (152) However, the widespread lack of "e-commerce" alternatives to paper documentation in the maritime industry complicates these good-faith efforts. (153) Much of the commercial documents utilized by our industry, like bills of lading and booking records, continue to be in paper form. This adds opaqueness to each stage of the supply chain and facilitates fraud and manipulation.
One solution to this problem is the adoption of "Blockchain" technology. Blockchain is an electronic ledger system that links a list of records, or blocks, by a cryptographic hash function of the previous block in the chain. (154) Data is distributed via peer-to-peer network sharing and validation of each block.(155) Once a party creates a new block of information it cannot be edited unless every previous block on the chain is also edited, which would require the consent of all parties to the transaction. (156) Blockchain is unique in that it does not require any central server or authority, which makes it extremely secure from hacking and allows for instantaneous transfer and usage of information. (157) By its nature, Blockchain introduces transparency to transactions and makes it much more difficult for an error in one block to continue down the chain. (158) Blockchain is considered an ideal accounting format for storing and managing records, and for identity and document provenance verification. (159) Blockchain does not rely on paper documentation and alleviates a lot of the logistical shortcoming of storing and carrying tangible records of a transaction. (160) The transparency introduced by Blockchain would make it much easier for parties in the container supply chain to verify the accuracy of information, vet their customers, and detect shell companies and companies with deficient compliance histories.
The adoption of electronic bills of lading, applying Blockchain technology, would be an especially timely development in the maritime industry. (161) Paper bills of lading have been in use for much of the industry's history but are also one of the industry's biggest hindrances. They are inefficient--a physical copy of the bill of lading must be presented to any recipient and to any financial institution that is using the relevant cargo as collateral, which adds considerable delay to the cargo's delivery--and are prone to human error and exploitation. (162) Electronic bills of lading, by contrast, are easier to deliver and collect and cannot be lost, destroyed, or easily altered. (163) E-bills would introduce much-needed efficiency and eliminate a lot of the perils posed by hazardous cargo that have been discussed in this article.
Blockchain technology also allows for the encryption of a massive amount of data on the chain itself. (164) This offers intriguing possibilities for supply chain verification. For example, shippers could now be required to provide chemical testing records--along with a copious chain-of-custody verification--for any products that they wished to ship. This information would be provided all the way down the chain via the cargo's electronic bill of lading to the actual crew of the ship carrying that cargo, with no bulky paperwork to manage and no possibility of the shipper being able to alter this data once it was introduced in the chain. Carriers would no longer be left to rely on the declaration of a shipper when it comes to the contents of a container. Containers could also be inspected upstream by imaging or physical inspection. That inspection data could be included on the chain, relieving the considerable burden on terminal operators and customs officials to examine thousands of containers waiting to be loaded onto ships.
Recall the case of the MSC Flaminia discussed above. There, instructions regarding safe handling and stowage provided by the shipper via a material safety data sheet (MSDS) were not relayed from the NVOCC to the carrier. Blockchain could have prevented this scenario. Theoretically, the MSDS would have formed the first block in a chain, which would have then been automatically incorporated into any booking request eventually be incorporated into the final bill of lading, thus ensuring receipt of all necessary storage and handling information by the carrier and every other party along the chain. Human error, as demonstrated by the NVOCC in Flaminia, would be a non-issue.
It is worth noting that even optimistic projections suggest that widespread incorporation of Blockchain technology, or even electronic bills of lading, is several decades away. (165) In the meantime, robust due diligence checks are still the best course of action for all parties in the containerized cargo industry. If the earlier Standard Club case study discussed above reveals anything it is that so many parties did not bother to vet their customers or to compare readily available documents side-by-side for discrepancies. These are relatively easy fixes for the industry to incorporate. The benefits will be worth the burden.
The recent fire aboard the Maersk Honam has drawn the well-discussed topic of misdeclared hazardous goods back into the forefront of the maritime industry. As this article illustrates, the international regulations for transporting hazardous goods in containers are complex and provide ample incentive and opportunity for shippers to misdeclare hazardous goods for shipment. If these goods cause or contribute to a fire or explosion at sea, this can have devastating effects on the ship, its cargo, and its crew, and can expose all parties in that supply chain to liability. All parties to a containerized cargo shipment are well advised to look carefully at their insurance policies and determine that their level of coverage adequately reflects their likely risk exposure. Until Blockchain technology and electronic bills of lading become widespread, the shipping industry as a whole is encouraged to instruct its members to have in place aggressive customer and cargo screening procedures, and to be on the lookout for relevant recommendations from the P&I clubs, in order to combat the ongoing scourge of misdeclared hazardous cargo.
(*) LL.M., Tulane University Law School, 2015. J.D., DePaul University College of Law, 2014. B.A., Lawrence University, 2011. Special thanks to Blythe Daly, Jim Saville, LeRoy Lambert, Ray Waid, Harry Morse, and Joshua Force for their insightful comments and advice in evaluating various drafts of this article. An earlier draft of this article appeared in Benedict's Maritime Bulletin, 16 BENEDICT'S MAR. BULL. 74 (Second Quarter 2018).
By Kyle Brennan (*)
(1) Mike Wackett, Cargo Owners Still Waiting for News of Maersk Honam Containers, THE LOADSTAR (April 6, 2018), https://theloadstar.co.uk/cargo-owners-still-waiting-news-maersk-honam-containers: Jai Sharma, Casualty Notice: MAERSK HONAM - Serious Fire and Salvage, CLYDE & Co LLP (March 28, 2018). https://www.clydeco.com/insight/article/casualty-notice-maersk-honam-serious-fire-and-salvage.
(2) Wackett, supra note 1.
(3) Sharma, supra note 1.
(4) Wackett, supra note 1.
(5) Sharma, supra note 1.
(8) Maersk Honam General Average Declared, BRITISH INTERNATIONAL FREIGHT ASSOCIATION (March 2018), https://www.bifa.org/news/articles/2018/mar/maersk-honam-general-average-declared?l=y.
(7) Robert Force, Admiralty & Maritime Law, FEDERAL JUDICIAL CENTER 195-96 (2004), available at https://www.fjc.gov/sites/default/files/2012/Admiralt.pdf.
(8) Gavin van Marie, Shippers with Cargo on Maersk Honam Face Hefty Bill to Get It Released, THE LOADSTAR (May 18, 2018), https://theloadstar.co.uk/shippers-cargo-maersk-honam-must-pay-get-released/.
(9) Mike Schuler, Maersk Says New Dangerous Goods Guidelines to Improve Containership Safety After Maersk Honam Fire, GCAPTAIN (Sept. 26, 2018), https://gcaptain.com/maersk-says-new-dangerous-goods-guidelines-to-improve-containership-safety-after-maersk-honam fire/.
(10) Victor Enzler, The Perils of Misdeclared Cargo, AXA XL (March 14, 2017), http://xlcatlin.com/fast-fast-forward/articles/the-perils-of-misdeclared-cargo.
(11) Ilian Djadjev, The Evolving Law and Regulation of the Carriage of Dangerous Goods By Sea - The IMDG Code and the IMSBC Code 1-2, (2015), available at http://www.rug.nl/research/portal.
(12) Id. at 2. The United States has incorporated the provisions of the IMDG Code in the Hazardous Materials Transportation Authorization Act, 49 U.S.C. [section][section] 5101-5127 (1994).
(13) MELTEM DENIZ GUNER-OZBEK, THE CARRIAGE OF DANGEROUS GOODS BY SEA 54-59 (Hamburg Studies on Mar. Affairs ed., 2008).
(14) Yves Vandenborn, Standard Safety: Better Box Booking, THE STANDARD CLUB 3 (March 2018), available at http://www. standard-club.com/media/2678898/standard-safety-better-box-booking-march-2018.pdf.
(15) Id. at 2.
(16) Djadjev, supra note 11, at 2. A Dangerous Goods Transport Document can be a bill of lading, shipping order, waybill, or other document.
(19) Vendenborn, supra note 14, at 3.
(20) See Joanne Ellis, Undeclared Dangerous Goods--Risk Implications for Maritime Transport, 9 WMU J. MAR. AFFAIRS 5, 19-20 (2010) (discussing the prevalence of paint as a misdeclared cargo).
(21) CARGO INCIDENT NOTIFICATION SYS. & INT'L GRP. OF P&I CLUBS, GUIDELINES FOR THE CARRIAGE OF CHARCOAL & CARBON IN CONTAINERS (2017) at *3, available at http://www.standard-club.com/media/2608637/cins-igpi-guidelines-for-the-carriage-of-charcoal-carbon.pdf.
(23) Id. at 4.
(24) Boykin v. China Steel Corp., 73 F.3d 539 (4th Cir. 1996); see also GERMAN FED. BUREAU OF MAR. CAS. INVESTIGATION, INVESTIGATIVE REPORTS 455/15 AND 58/16, SERIOUS MARINE CASUALTIES: CHARCOAL CARGO FIRE ON THE CONTAINER VESSELS MSC KATRINA IN THE ELBE ESTUARY ON 20 NOV. 2015 AND LUDWIGSHAFEN EXPRESS IN THE RED SEA ON 21 FEB. 2016 (2016) at *58 (discussing charcoal fire casualties aboard the vessels M/V MSC Katrina (2015), M/V Ludwigshafen Express (2016), M/V Safmarine Nomazwe (2011), M/V Santa Rosa (2014), M/V Caroline Maersk (2015), M/V Moreno (2015), and M/V MSC Sveva (2015)).
(25) R. Thomas Long, Michael Kahn & Celina Mikolajczak, Lithium-Ion Battery Hazards, Soc'Y OF FlRE PREVENTION ENG'RS (2012), available at ahttps://www.sfpe.org/page/2012_Q4_2/Li thium-Ion-Battery-Hazards.htm.
(30) See generally BUREAU D'ENQUETES SUR LES EVENEMENTS DE MER, MARINE INVESTIGATION REPORT: FIRE OF THE CARGO ABOARD THE CONTAINERSHIP CMA CGM ROSSINI ON 15 JUNE 2016, IN THE PORT OF COLOMBO (SRI LANKA), available at http://www.bea-mer.developpement-durable.gouv.fr/IMG/pdf/beamer-fr cma cgm rossini 2016.pdf
(31) Id. at 40.
(32) Id. at 38.
(33) Id. at 34.
(34) Vandenborn, supra note 14, at 3.
(36) Id.; see also UK Protection & Indemnity Club (UK P&I), Safe Carriage of Dangerous Goods in Containers (April 8, 2016), http://www.ukpandi.com/knowledge-publications/article/safe-carriage-of-dangerous-goods-in-containers-135685/.
(37) Vandenborn, supra note 14, at 3.
(39) Report of the Preliminary Enquiry into the Explosion and Fire Onboard the M/V "Sea Elegance" on 11 October 2003 at the Durban Anchorage, South African Maritime Safety Authority (SAMSA) at *7 (July 19, 2004), available at http://www.sjofartsverket.se/upload/5812/10-INF2.pdf; Vandenborn, supra note 14, at 3.
(40) SAMSA, supra note 39, at 7. Some maritime safety authorities have also floated the idea of storing Cal Hypo in refrigerated containers if the voyage is expected to travel heavily through tropical regions. Id. at 9.
(41) Vandenborn, supra note 14, at 3.
(42) UK P&I, supra note 36.
(43) SAMSA, supra note 39, at 2-4.
(44) Id. at 4.
(46) Id. at 5-6.
(47) Id. at 6.
(50) Enzler, supra note 10.
(53) Ellis, supra note 20, at 20.
(54) MV Sea Elegance, WIKIPEDIA (Mar. 11, 2018, 6:46 PM), https://en.wikipedia.Org/wiki/MV_Hyundai_Fortune#cite_ref-cgmix_2-0.
(57) Id. The cause of the explosion aboard the Fortune was rumored to be storage of improperly labeled petroleum-based cleaning products.
(58) MV Sea Elegance, supra note 54. A number of refrigerated containers suffered spoilage of their cargo when the ship eventually lost power as a result of the fire. Id.
(60) In re M/V Rickmers Genoa Litig., 622 F. Supp. 2d 56, 62 (S.D.N.Y. 2009).
(61) Id. at 60.
(62) Id. at 62.
(65) In re Rickmers Genoa, 622 F. Supp. 2d at 62.
(66) See Chem One, Ltd. v. M/V Rickmers Genoa, 660 F.3d 626 (2d Cir. 2011); see also, In re Rickmers Genoa, 622 F. Supp. 2d 56.
(67) For additional case studies involving misdeclared hazardous cargo, and especially their treatment under English law, see  EWHC 1880 (Comm.) ("The Aconcagua"); see also  EWHC 2399 (Comm.) ("The Ythan"); see also  2 Lloyd's Rep. 255 ("The Kapitan Sakharov").
(71) See Scholastic, Inc. v. M/V Kitano, 362 F. Supp. 2d 449, 457 (S.D.N.Y. 2005) (indicating that an NVOCC may be held to be the shipper of cargo under certain circumstances).
(72) In re M/V DG Harmony, 394 F. Supp. 2d 649, 650-52 (S.D.N.Y. 2005).
(73) Id. at 653.
(76) Id. at 654.
(77) In re M/V DG Harmony, 394 F. Supp. 2d at 651-52, 654.
(78) Id. at 654.
(79) Id. at 654-55.
(80) Id. at 655.
(82) In re M/V DG Harmony, 394 F. Supp. 2d at 651.
(83) Id. at 652.
(84) Id. at 669.
(85) Id. at 674.
(86) In re M/V DG Harmony, 394 F. Supp. 2d at 674-75.
(87) Mark J. Fisher, Inc. v. M/V DG Harmony, 533 F.3d 83, 92 (2d Cir. 2008) (citing 291 F.3d 145, 148 (2d Cir. 2002)).
(88) Id. at 93.
(89) Id. at 96.
(91) In re M/V MSC Flaminia, 2018 WL 4301368, No. 92-CV-8892 (S.D.N.Y. Sept. 10, 2018) at *l-2.
(92) Id. at *2.
(93) Id. at *5.
(94) Id. at *6.
(95) Id. at *7.
(96) Flaminia, 2018 WL 4301368 at *14-15.
(97) Id. at *9, 25.
(98) Id. at *4.
(99) Id. at *2.
(100) In re M/V Flaminia, 339 F.Supp. 3d 185, 191 (S.D.N.Y. 2018).
(101) Id. at 205-06.
(112) Id. at 210.
(103) Id. at 206-07.
(104) Id. at 208.
(105) Flaminia, 339 F.Supp. at 209.
(107) Id. at 212.
(108) Id. at 212.
(109) Id. at 217.
(110) Flaminia, 339 F.Supp. at 217.
(112) Id at 205-09.
(113) Id. at 209.
(114) Id. at 230.
(115) Flaminia, 339 F.Supp. at 195.
(118) Id. at 196.
(119) Id. at 222.
(120) Flaminia, 339 F.Supp. at 236, citing Contship Containerlines, Ltd. v. PPG Indus., Inc., 442 F.3d 74, 78 (2d Cir. 2006).
(121) Id. at 237-39.
(122) Id. at 239, citing Senator Linie, 291 F.3d 145, 168 (2d. Cir. 2002).
(123) Id., citing Senator Linie, 291 F.3d at 168.
(125) Flaminia, 339 F.Supp. at 239.
(126) Id. at 243.
(127) Id. at 246.
(128) Senator Linie, 291 F.3d at 148.
(129) In re DG Harmony, 533 F.3d at 93.
(130) Vandenborn, supra note 14, at 8.
(134) Id. at 9.
(135) Vadenborn, supra note 14 at 9.
(140) Vadenborn, supra note 14, at 9.
(141) Id. at 8.
(143) Id. at 9.
(145) Vadenborn, supra note 14, at 9.
(147) The Importance of Cargo Insurance, iCONTAINERS (Mar. 22, 2018), https://www.icontainers.com/us/2018/03/20/the-importance-of-cargo-insurance/.
(150) See Senator Linie, 291 F.3d at 168; see also, Scholastic, Inc. v. M/V KITANO, 362 F. Supp. 2d 449, 456-57 (S.D.N.Y. 2005) (discussing NVOCCs functioning as the legal shipper of cargo under certain circumstances).
(151) See Enzler, supra note 10.
(152) HAPAG-LLOYD, Cargo Portal and Protection Reimagined, https://www.hapag-lloyd.com/en/products/cargo/dg/cargo-patrol.html (last visitedApr. 9, 2018).
(153) Allison Skopec, Comment, PIN Chagrin: The Glencore Heist and EDI Through the Lens of Delivery Orders, 42 TUL. MAR. L.J. 221, 221-22 (2017).
(154) The Great Chain of Being Sure About Things, THE ECONOMIST (Oct. 31, 2015), https://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable.; see also JOSIAS N. DEWEY, SHAWN S. AMUIAL, & JEFFREY R. SEUL, THE BLOCKCHAIN: A GUIDE FOR LEGAL AND BUSINESS PROFESSIONALS (2016) (providing an exhaustive discussion of Blockchain technology and its applicability to legal and business professionals).
(157) Skopec, supra note 153, at 239-41.
(158) Economist, supra note 154.
(160) Skopec, supra note 153, at 239.
(161) See Koji Takahashi, Blockchain Technology & Electronic Bills of Lading, 22 J. OF INT'L MAR. L. 202 (2016) (discussing in-depth how electronic bills of lading would comply with the Rotterdam Rules and their requirements regarding exclusive control, issuance, and transferability).
(162) Id. at 206.
(163) Id. at 210.
(164) Mary Ann Callahan, Blockchain: Is It The Future of Data Storage? (Nov. 7, 2017), https://www.cso.com.au/article/629644/blockchain-it-future-data-storage/.
(165) Marco Iansiti & Karim R. Lakhani, The Truth About Blockchain, HARVARD BUSINESS REVIEW (Jan.-Feb. 2017), https://hbr.org/2017/01/the-truth-about-blockchain.
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