LOSS PREVENTION DATA ANALYSIS: BULK CARRIER CARGO CLAIMS REVIEW 2025

Published: 11 December 2025

Bulk carriers account for more than 40% of the world’s fleet capacity, the largest of any ship type. Similarly, within the Britannia Group, bulk carriers are one of the largest individual classes of ship entered. It is therefore important to identify and investigate any trends that are apparent with these cargo types to best mitigate their exposure to the Club and our Membership.

We have subsequently 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.

Results showed (Figure 1) the most common claim types are:

shortage
physical damage
contamination
wet damage

These were examined further below.

Figure 1 – Shortage and damage Claims as a relative percentage

SHORTAGE

Shortage claims remain a substantial issue, with around 50% of registered claims relating to shortages. Whilst many of these are relatively low value, they place a substantial demand on Members and the Club to administer and process.

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. We have seen various examples of cargo spillage when using crane grabs, and many bagged cargoes contain desirable contents that are deliberately taken.

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. The below chart indicates quite obviously where the largest issues lie.

Figure 2 – Regional locations of registered shortage claims as a percentage of the total

North and West Africa combined accounts for almost 44% of our recorded shortage claims. Notably, Algeria and Morocco together account for 27% of our 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.

As noted above, 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.

Often the best defence against a claim remains accurate record keeping. We recommend shipboard draft surveys at each stage of cargo operations, with any substantial discrepancy from shore figures investigated further. For cargoes that contain large amounts of water such as coal or iron ore, the records of cargo hold bilge soundings and discharges are essential. Close supervision of cargo operations and recording of poor practices can assist in demonstrating that cargo has been lost. An accurate tally of bagged cargo is also vital. Cargo hatch sealing and appointment of cargo surveyors with local knowledge can also assist in helping to defend and occasionally avoid claims.

We have produced the following guidance, amongst others that may be consulted to obtain more detailed advice:

DAMAGE

In this category, the three most frequent damage claims to bulk and breakbulk cargoes were focused on over the reporting period. These were categorised as physical damage, contamination, and wet 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.

To group the claims into meaningful data, each were categorised into broad groups relating to the cargo type, as seen below in Figure 3.

Figure 3 – Cargo types as percentage of total suffering from physical damage

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. We recommend 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. We recommend 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.

For all cargoes in this category, it is important to follow ventilation rules strictly with accurate records, minimise fuel tank temperatures, and consider appointing a surveyor promptly at disport to assist in mitigation should damage be found.

We have produced the following guidance, amongst others that may be consulted to obtain more detailed advice:

CONTAMINATION

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

Figure 4 – Sources of contamination as a percentage of total

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.

Finally, 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.

Stevedore rough handling and equipment malfunctions were responsible for 18% of the claims. We recommend that stevedores are kept under supervision, and any evidence of rough handling is recorded using video recording, pictures, and communications of any protests.

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.

We have produced the following guidance, amongst others that may be consulted to obtain more detailed advice:

WET DAMAGE

For the purposes of categorisation, wet damage in this instance relates to damage by both fresh and sea water and has included ventilation where water vapour has been added to the cargo hold in error.

Figure 5 – Causes of wet damage claims as percentage of total

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. We encourage 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.

We have produced the following guidance, amongst others that may be consulted to obtain more detailed advice:

It is clear when reading this document that many of the claims are the result of obvious mistakes or basic errors. After analysing these claims, we can conclude that that in many cases, “the basics” are not being done adequately and obvious mistakes happen regularly.

Adhering to adequate company procedures is of the upmost importance, and there must also be proactive confirmation that procedures are understood and are being followed. It is unhelpful to discover that a pattern of basic errors or omissions exists only after a cargo claim occurs. The crew must also be supplied with adequate tools to do their job, and maintenance must never be neglected. Communication between ship and shore staff is key, with regular ship visits to understand how work is being conducted onboard.

The variety of bulk and breakbulk cargoes that are provided for carriage are almost limitless. Understanding the nature of the cargo is of great importance, with the shipper’s declaration vitally important in this regard, along with the cargo care instructions provided by the shipper and charterer. The value of learning lessons is also key, and we encourage sharing knowledge within your company, both when things go well, and when they go wrong.

Our Loss Prevention team always welcomes any requests for advice or recommendations on bulk or breakbulk matters, and we can be contacted at lossprevention@tindallriley.com.

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