West Africa – the global rice trade and its challenges for marine cargo underwriters

17.08.2016

The West African region depends on international imports for some 40% of its rice supply (approximately 5 million tons of rice, some 20% of the rice traded internationally is imported). Thailand, and increasingly, Vietnam, are the region’s main rice suppliers. Rice accounts for a high proportion of the overall food intake of poor households. As such, a constant flow of rice is needed, which is shipped from Asia to West-Africa, where it will be discharged, stored and distributed in many different ports.

The main stakeholders are a number of big international trading houses, but marine insurance is also involved as often they face important claim issues related to transport and handling damages, as well as pilferage during discharge or during storage.

Although the situation varies considerably from port to port, the most common types of damages are:

– Wetting damage during sea transport,
– Bags found torn and/or leaking rice inside the holds,
– Torn bags due to rough handling by the stevedores,
– Overloaded discharge nets which bags can fall or burst open when lifted,
– Rough landing of nets onto trucks or loading platforms which will cause bags to burst open,
– Pilferage during discharge,
– Improper or too high stowage of bags inside the warehouse causing bags to fall and/or tear,
– Risk of misappropriation due to bad management in the warehouse.

In order to avoid or minimize these damages, the consignee’s role is very important. In some ports however, the consignee completely relies on the stevedoring company to ensure a proper handling and storage of the cargo, but experience has taught us that it is vital the consignee is present or represented by his surveyor to ensure a good operation. Equally important is the role of the stevedoring company who, with a team of inspectors, has to ensure damage (torn bags) or pilferage is minimized as much as possible. Besides the required cargo inspection and the supervision of the vessel’s discharge operation, the cargo underwriter’s surveyor will take the initiative to address any operational problem or deficiencies to the different stakeholders, and to ensure the cargo is discharged and stored in the best possible manner. In this regard, and to ensure a good operation and damage control, we suggest the following:

– The receiver should place supervisors in each of the vessel’s cargo holds and at the loading platform of the trucks, and if it is noted that certain individual workers are not doing a proper job, causing damage to the bags, then they should be removed from the vessel or terminal.

– A good business relationship between the receiver and the stevedoring company is vital, so the given cargo handling instructions and discharge procedures can be enforced.

-The stevedoring company must also have supervisors on board to check on the performance of the various labour teams.

– One of the most important recommendations is to have the port terminal secured in such a way that no unauthorized persons can board the vessel or gain access to the cargo while it is loaded onto trucks or stored in warehouses, this to avoid pilferage.

– Whenever possible, discharge operations should not be carried out at night. During the night the cargo is more vulnerable to theft as there is often less staff and supervisors present.

Once the cargo has been discharged and stored inside warehouses, regular follow-up surveys and stock controls should be carried out. Despite the fact that most of the time clear instructions are given to local stevedores on how such consignments of rice need to be discharged, handled and stored, we can only conclude that often these instructions are not entirely followed, and consequently a vigorous supervision is necessary in order to prevent damage occurring and to safeguard the interests of the cargo owners and underwriters.


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