that the IMO has no requirements specific to the carriage of EVs on passenger or cargo RoRo ships. In fact, SP 961 excludes EVs carried on Ro-Ros and car carriers from the requirements that apply to battery- powered vehicles or equipment. Consequently, carriers do not generally have a list of all EVs on board, or their respective locations.
Regulatory changes?
There have been calls to reclassify Li-ion batteries as class 4.3 under the IMDG Code. This covers flammable solids which, when in contact with water, emit flammable gases. They would then be subject to much more stringent segregation requirements.
The White Paper recommends revoking the SP 961 exemption for EVs so that carriers can plan stowage locations and the monitoring of EVs during the voyage in greater detail, with a view to developing early detection, evacuation and/or firefighting procedures.
It also proposes a separate UN number for Li-ion powered EVs so that they could be subject to specific requirements for declaration and documentation (for example, state of charge, type of battery, battery chemistry and capacity).
There are currently no rules governing the state of charge, except for transport by air. IATA Regulations specify a maximum of 30% and it has been proposed that this should be extended to transport by sea and other forms of transport. This would help in reducing the risk of thermal runway during transportation.
The IMO is reportedly considering whether any changes need to be made to the IMDG Code but nothing specific has yet been confirmed.
Legal considerations
Under Article III Rule 1 of the Hague/ Hague-Visby Rules, the carrier has a due diligence obligation to make the vessel seaworthy and to properly man, equip and supply the vessel. Article III Rule 2 sets out the carrier’s obligation to take reasonable care of the cargo, subject to certain exceptions set out in Article IV, including the fire exception in Article IV Rule 2b. Article IV rule 6 provides for the shipper’s indemnity in the case of dangerous goods, where they have been shipped without the carrier’s knowledge or consent.
Dangerous cargo can, of itself, make a vessel unseaworthy, as can faulty systems and inadequately trained crew. Whether the carrier acted as a prudent owner is not always straightforward because it may not be clear before or at the commencement of the voyage that a battery forming part of the cargo was defective and the carrier will not usually check on the contents of a container itself. Instead, it will rely on the documentation provided by the shipper. A hidden danger is nonetheless relevant.
The shipper has a strict liability for shipping dangerous goods without the carrier’s knowledge, but the indemnity will not be engaged where the loss has been caused by the carrier’s failure to exercise due diligence.
Ultimately, a shipper should protect itself by providing all the relevant documentation and making the relevant declarations. The carrier may not then be able to rely on lack of knowledge/consent, but it can stow the goods appropriately and take any required precautionary measures.
Contractual terms Transactions within the logistics industry are usually conducted on the basis of standard terms and conditions that will incorporate provisions dealing with the transport and/or storage of dangerous goods. The customer will normally be under a strict duty to notify a forwarder, carrier or warehouse keeper if goods are dangerous and to provide all the documentation and information required so that the goods can be stored or transported safely. However, a forwarder must still show reasonable skill and care in handling and transporting the goods. As the use of Li-ion becomes increasingly more common, forwarders, carriers and warehousing facilities should familiarise themselves with the potential risks associated with them.
Contractual clauses, particularly those dealing with dangerous goods and any exclusion/limitation of liability clauses, should also be reviewed to ensure that they provide sufficient protection and allocate risk as required. Where a forwarder has been negligent in its handling of the goods, it may not be able to rely on a standard exclusion/limitation of liability clause.
Mitigating risk
Damaged or defective Li-ion batteries are at greater risk from short- circuiting and while ideally they should not be shipped, there are likely to be an increasing number of used and reconditioned Li-ion batteries in the future, including those in second-hand EVs. Some carriers might refuse to carry them at all, but this could potentially encourage mis-declaration of cargo and may not be commercially viable in the long run.
Similarly, some carriers might refuse to allow batteries to be charged on board due to safety concerns, but they will come under commercial pressure to do so.
It has also been reported that manufacturers would like to see more powerful Li-ion batteries qualifying under SP 188. Potentially, technological developments might impact on the current classification because smaller batteries are increasingly more powerful. However, at an industry conference in March 2023, ‘Lithium-ion batteries in the logistics supply chain,’ it was stressed that manufacturers’ ambitions to develop more powerful, lighter and diverse battery cells should not be allowed to override safety concerns for their transportation. The importance of bringing manufacturers of EVs and the batteries that power them into the debate could not be over-emphasised.
In the meantime, participants in the supply chain should ensure that they do adequate due diligence on their counterparties and the cargo/goods in question so that they can satisfy themselves that the cargo has been prepared and declared correctly. Once batteries enter the intermodal supply chain, particularly if they have been shipped under SP 188, they are likely not to be checked to see if they are compliant.
Therefore, it remains crucial to keep up-to-date on legal and technological developments, comply with industry guidance and establish internal processes for minimising the risks.
This article first appeared on the Hill Dickinson website and is republished here with our thanks.
52 | ISSUE 107 | MAR 2024 | THE REPORT
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