Pre-load Steel Surveys

Guidance for Members on the use and scope of pre-load surveys for finished steel cargoes

Introduction

The carriage of steel cargos frequently results in claims. These often arise from allegations that rust, mechanical damage, indentation, bending, contamination or other defects occurred during the voyage, when in fact some or all of the damage may have been present before loading.

A properly conducted pre-load steel survey can assist in establishing the apparent condition of the cargo before shipment and support the accurate description of the cargo condition in shipping documents.

The purpose of this guidance is to explain when the UK Club recommends pre-load steel surveys and the scope of such surveys.

UK Club policy

As a general principle, routine precautionary surveys are operational matters arranged by the Members at their expense. However, given the claims exposure associated with certain types of steel cargo, the Club supports undertaking pre-load steel surveys for finished steel products, and covers the cost of these, subject to the individual Member’s terms of entry and applicable deductibles. Where a Member has a fee-inclusive deductible, it will apply in relation to the pre-load survey fees.

Pre-load steel surveys are recommended for finished steel products because these cargoes are highly susceptible to surface damage and are frequently the subject of cargo claims. Products such as coils, sheets, plates, pipes and galvanised steel are often required to arrive in an essentially rust-free and undamaged condition, meaning even minor pre-existing rust, dents or scratches can result in significant claims post discharge.

In contrast, semi-finished steel products such as billets, blooms and slabs generally undergo further processing after discharge, making their value less dependent on surface appearance. Minor rust, scale or handling marks are often expected and do not affect their suitability for manufacture. As a result, claims arising from pre-existing cosmetic defects are less common, and the Club does not routinely cover the cost of pre-loading surveys for these cargoes.

These examples are provided as general guidance only. The classification of a cargo may depend upon its characteristics and intended use.

Objectives of a pre-load steel survey

The primary objectives of a pre-load steel survey are to:

• Record the apparent condition of the cargo before loading.
• Identify and document visible rust, contamination, deformation, mechanical damage, packaging defects, wetting or other abnormalities.
• Support the Master in determining whether remarks should be included on Mate’s Receipts and Bills of Lading.
• Provide contemporaneous evidence of the cargo condition at the time of shipment.
• Reduce the risk of disputes concerning pre-existing cargo defects.

Scope of the survey

A pre-load steel survey should focus on the apparent external condition of the cargo being presented for shipment.

The surveyor should assist the Master by:

• Examining cargo units that are reasonably accessible before and during loading.
• Recording visible exceptions and defects.
• Photographing representative cargo condition.
• Advising on appropriate cargo condition remarks where necessary.
• Assisting in discussions relating to the description of cargo condition in shipping documents.

The survey is not intended to:

• Certify the quality of the steel.
• Guarantee the absence of hidden defects.
• Confirm cargo quantity.
• Report on the condition of the ship’s holds and hatch covers.
• Perform tallying functions.
• Provide general cargo stowage and securing consultancy services.
• Replace the Master’s own responsibility for deciding whether cargo documentation accurately reflects the apparent condition of the cargo.

Bills of Lading and cargo documentation

A key benefit of a pre-load steel survey is the support it provides to the Master when assessing whether cargo documentation accurately reflects the apparent condition of the cargo presented for loading.

Where damage, rust, wetting, contamination, packaging defects or other abnormalities are observed, appropriate remarks should be considered for inclusion in Mate’s Receipts and, where applicable, Bills of Lading. The surveyor’s observations may assist the Master in documenting such findings.

Members should remember that cargo interests are entitled to rely upon statements regarding the apparent order and condition of cargo contained in shipping documents.

Practical considerations

To maximise the value of a pre-load steel survey, Members should:

• Arrange the survey as early as practicable.
• Ensure surveyors are given reasonable access to the cargo.
• Retain survey reports and photographs.
• Notify the Club promptly if significant disputes arise concerning cargo condition.
• Ensure that any concerns identified during loading are properly documented.

Conclusion

Pre-load steel surveys remain an effective loss prevention measure for finished steel products. When properly conducted, they help establish the apparent condition of cargo before shipment, support accurate cargo documentation and provide valuable evidence should cargo condition disputes arise after discharge.

By focusing surveys on finished steel products that present the greatest exposure to cargo claims, Members can make effective use of this important risk management tool.