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Stolt incident highlights consequences of lack of data and information sharing

The ubiquitous shipping container recently celebrated its 68th birthday with around 866 million TEUs shipped globally in 2023 and projected to reach 988 million TEUs by 2027..!!

While misdeclaration in weight or hazardous content has been the bane of the container shipping industry for many years leading to heavy consequences, the industry also seems to be facing issues due to a lack of data and information sharing..

Nothing highlights the consequences of lack of data and information sharing more effectively than the incident in which Stolt Tank Containers, part of Norway’s Stolt-Nielsen Limited (referred to as Stolt in this article), has agreed to pay up to USD290 million in compensation due to this very issue..

The incident on MSC Flaminia

The incident referred to, was an explosion that happened on board the MSC Flaminia, a container ship operated by MSC, killing 3 crew members in July 2012..

At the time of the incident in July 2012, MSC Flaminia was carrying 2,876 containers en route from Charleston in the USA to Antwerp in Belgium, including 149 containers of hazardous cargo of which, 3 tank containers were carrying DiVinylBenzene (DVB), a monomer additive used to manufacture plastic resins..

Court ruling

The US District Court for the Southern District of New York found that the explosion resulted from runaway auto-polymerization of DVB80 loaded in 3 ISO Tank Containers belonging to Stolt..

The court found the shipper Deltech and the tank container operator Stolt liable for the incident and assigned 55% and 45% liability to the companies respectively..

Stolt appealed the District Court’s ruling with the US Court of Appeals in 2018 only for the ruling to be upheld by the Court of Appeals and after 12 years of back and forth at the courts, Stolt finally agreed to pay this sum as compensation, accepting partial liability for the incident..

Not sharing critical data and information

The US courts held Stolt liable because while they possessed extensive information regarding the heat-sensitive nature of the DVB, it did not share this critical information with the ocean carrier MSC, in an effective manner regarding the dangers of heat exposure..

The report also found that Stolt arranged loading the DVB80 into tank containers in June 2012, transported the containers to the New Orleans Terminal, and offloaded them in the open yards at the terminal for shipment, earlier than it should have..

June/July being hot summer months in New Orleans, these containers were left baking in the hot sun for 10 days before being loaded on the MSC Flaminia on 1st July 2012..

As per the findings, one of the characteristics of DVB is that it can self-polymerize and generate large amounts of heat if exposed to temperatures over 85° F for a prolonged period..

After being left out in the hot temperatures in the terminal, these containers were stowed underdeck in Hold 4 of the ship further adding to the heat as the underdeck of ships can reach quite high ambient temperatures..

In addition, these containers were stored adjacent to a heated cargo of DiPhenylamine (DPA) and these containers were stowed near the ship’s heated bunker fuel tanks..

The continued exposure to a higher-than-normal temperature before and during the voyage were key factors in the auto-polymerization of DVB80 which caused the explosion..

Assigning liabilities

The court assigned Deltech the greater liability (55% share of the liability) for the accident because as the manufacturer of this cargo, they were aware of the substance’s tendency to polymerise..

In the ruling, Presiding Judge Katherine B. Forrest noted

Contrary to their own safety protocols developed after prior polymerization incidents that determined that shipping DVB out of New Orleans should be avoided in warmer months, Deltech booked the shipment of DVB80 out of New Orleans for late June.

This fateful decision was the result of — at the very least — a combination of a considered decision at the highest levels of Deltech and managerial errors that followed

The court ruled that MSC was not liable for the loss on the grounds that

although MSC also possessed substantial information regarding the heat sensitive nature of DVB before the MSC Flaminia voyage, it lacked sufficient information that the tanks not only contained a heat sensitive product, but —very importantly— had already been exposed to conditions that transformed them into ticking time bombs..

While MSC was not held liable for this particular loss, it has been reported that they were still ordered to pay the owner of the MSC Flaminia, Conti, an amount of USD200 million towards the considerable repairs that the ship had to undergo..

As per Marine Traffic, MSC FLAMINIA has subsequently been renamed CMA CGM SAN FRANCISCO and is currently registered and operating under the flag of Liberia after being deregistered from the German flag at the time of the incident..

Conclusion

The MSC Flaminia incident underscores the profound impact of data and information sharing within the shipping industry.. Hopefully, the lessons learned from this tragedy will serve as a catalyst for change as container shipping continues to grow..

On the positive side, the advancements in technology, standards, and digitalisation in the industry mean that stakeholders have several options that they can exercise to prioritise data transparency, sharing, and communication..

Ensuring the seamless flow of critical information will not only enhance operational efficiency but also build a more resilient, safe, and responsible shipping ecosystem.. Let us all contribute to it..


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Hariesh Manaadiar
Hariesh Manaadiarhttps://www.shippingandfreightresource.com
I am Hariesh Manaadiar, the Founder of Shipping and Freight Resource.. I have been in the dynamic shipping and freight industry for over three decades and have worked in several sectors.. I share my experiences and knowledge of the industry through this blog for those looking for help in the industry.. Stay subscribed for more free useful content about shipping, freight, maritime, logistics, supply chain and trade..

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