rectified the two known defects years ago. Failure to have rectified the defects could prompt the court to conclude that the shipowner had displayed a cavalier attitude towards cargo/container safety, treating container losses as inevitable and an inherent cost of operating vessels – a notion with which many would agree.


With containers falling overboard, governments could turn their attention to unseaworthy vessels. The Australian Navigation Act 2012 ss.109 and 110 creates offences for shipowners and masters respectively, for sending/taking unseaworthy vessels to sea. Fault-based offences, max 10 years; civil penalty, max 6000 penalty units (A$222/unit).


Turning now to the rectification cost of the two known defects, this cost can only be considered by default, because there is no comparable research available as a guide. From a cost/benefit aspect, the rectification cost could be compared against the costs involved in container stack collapses and container retrieval from coastal waters. The cost of the former would run into the hundreds of millions of US dollars, involving, inter alia: cargo; containers; discharge/ reload operations; extended port stays; intermediate ports; delayed schedules; restoration of coastal works and tourist beaches; and container recovery from coastal waters. Such exorbitant costs could not reasonably be used as a guide. Turning to container retrieval costs from Australian coastal waters,


the Australian Maritime Safety Authority was reimbursed about A$18M (US$13M – YM Efficiency) and about A$22M (US$16M – APL England). Using the lower US$13M cost as a guide, a reasonable person would agree that the rectification cost would be a fraction of US$13M. But here’s the conundrum: on the one hand, shipowners appear to be content to incur costs associated with container stack collapses since around 2011; but on the other hand, in their Grounds for Application to Intervene in the matter of the CMA CGM Libra, the International Group of P&I Clubs noted that, since the Admiralty Court decision regarding that vessel in March 2019, claims received by shipowners concerning passage planning were estimated at US$116M:


26. These are matters of real financial importance. It is estimated that the total value of claims concerning passage planning that have been received by member clubs since the decision of the Admiralty Court in this case is in excess of USD 116 million.


The comments below put the issue with passage plans into perspective:


i. When the CMA CGM Libra grounded in May 2011, P&I Clubs should have advised their ship-owning members about the circumstances of the grounding and the need for passage plans to be compliant with the Guidelines for Voyage Planning, before and


110 | The Report • September 2022 • Issue 101


at the commencement of voyages; shipowners, since 2011, should have required their DPAs to ensure that passage plans were compliant, given the easy availability of electronic charts and nautical publications;


ii. The Admiralty Court’s decision was delivered in March 2019, almost eight years after the grounding; if shipowners had followed the advice in (i) above, all passage plans should have been compliant at the commencement of the voyages since 2011.


So, what we have here, is this: shipowners continue to operate their vessels with two known defects, despite having incurred losses in the hundreds of millions of US dollars, since 2011-2012. Their apparent willingness to accept such losses is at odds with their concerns around claims associated with passage planning. Had shipowners conducted risk assessments of their operations in 2011-2012, it would have demonstrated the need for urgent action to eliminate container stack collapses and avoid the resulting losses. Their failure to rectify the two known defects and prevent the ensuing losses, lends credence to the ‘notion’ that shipowners treat certain losses (or costs), as inherent to operating a vessel. Shipowners could discredit that notion by commencing research to rectify the defects that would eliminate container stack collapses, enhance safety at sea; prevent the risk of crew injury and reduce the burden of container losses on the consumer.


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