American Club Circular No. 23/14 1 AUGUST 11, 2014 CIRCULAR NO. 23/14 TO MEMBERS OF THE ASSOCIATION Dear Member: STEEL CARGO PRE-LOAD SURVEYS: AN UPDATE In Circular 06/02 of March 20, 2002 entitled The Carriage of Steel Cargoes: Loading and Discharge Surveys, the Club made extensive recommendations in regard to the conduct of precautionary surveys of certain steel cargoes to minimize the prospect of spurious steel cargo claims. Over the period since that Circular, Members have, for the most part, followed the recommendations it contained and made progress in minimizing and averting the risks, and consequent liabilities, associated with such cargoes. More recently, however, your Managers have seen cases where precautionary steel surveys at load ports were not performed. This has resulted in several significant cargo exposures. Accordingly, it has been thought appropriate to revisit and update Club advice on the handling of steel cargoes in order to reaffirm best practice going forward. A. General considerations To minimize the risk of exposure to such claims, the Club requires that Members appoint an experienced surveyor at the port(s) of loading steel cargoes to conduct a precautionary pre-load survey in order to: 1. assist the master in recording the apparent condition of the cargo prior to loading so that, where appropriate, mate’s receipts and bills of lading can be claused correctly as necessary; and 2. verify that the vessel’s cargo hatch covers and other openings in way of the hold spaces are in sound condition. It cannot be overemphasized that any failure to complete such a steel pre-load survey will prejudice the Member’s coverage for any cargo claims that are asserted against it and its vessel in connection with the subject shipment(s). If a Member fails to comply with this required practice and a claim in respect of cargo is subsequently asserted where the condition, nature or quantity of cargo would have been discovered during a precautionary steel pre-load survey, the Managers, in their absolute discretion, are authorized and entitled to (1) apply a double deductible for any cargo or other claim arising in connection with the shipment in question; and/or (2) to deny the coverage or reimbursement of any such claims, either in whole or in part. Furthermore, exclusions and/or limitations to coverage which have been imposed by reference to existing, outstanding deficiencies to hatch covers or any watertight boundaries to cargo holds will not be removed by a pre-load survey of cargo. Members are urged to ensure that they fully comply with this steel pre-load survey requirement and all other related conditions as may apply to an individual vessel’s terms of entry. American Club Circular No. 23/14 2 As it has done since 2002, the Association will, in all cases, make a 50% contribution toward the cost of such steel pre-load surveys. Of course, should a cargo claim arise in connection with the voyage in question, the cost of the steel pre-load survey will be applied towards the claims file cost for that matter, subject to any applicable deductible. B. Prompt notification to the Managers To ensure that clear and concise instructions are given to surveyors appointed to assist the master in clausing bills of lading, or to survey cargo upon discharge, timely requests for a surveyor’s attendance should be made directly to the Managers. This notification should include: 1. the vessel’s estimated time of arrival at the loading port; 2. the