2. MIG MLAANZ Seminar Series Sydney The Innocent Stevedore (or how I came to better understand the Waterfront) February 2007

3. Agenda 1. Introduction  Seminar objective  Why the Innocent Stevedore? 2. Australian Stevedoring context  The Transport Logistics Chain  Principal locations  Service providers  Industry issues 3. Stevedoring risk management – key issues 4. Legal considerations for stevedores 5. Summary 6. Q&A Source: Patrick Terminals

4. But first – another great claim

11. 1.Introduction – Seminar objective Objectives  To understand legal claims in the context of Australian stevedoring industry  Opportunities to reduce claims involving the waterfront

12. 1.Introduction – Why the Innocent Stevedore? Fact or fiction - does the Innocent Stevedore exist?  Stevedores’ place in transport/logistics chain exposes them to a variety of risks, many (not all) beyond their control.  Demands of transport/logistics chain require stevedores to invest heavily in Capital equipment Technology Facilities Trained labour Procedures Customer demands drive stevedoring efficiency, costs and reliability Stevedore’s requirement to balance these demands with safety and vessel/cargo care considerations Stevedores may not be (quite) perfect, but above factors combine to require stevedores to invest heavily in risk management strategies to avoid WCI and vessel/cargo damage claims

13. 2. The Australian Stevedoring Industry context - the Transport/Logistics Chain Source: Sydney Ports Handbook, March 1995

14. 2. The Australian Stevedoring Industry context - principal locations Source: P&O Ports Ltd

15. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers A. General Stevedoring Operators – Port coverage summary

16. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers B. Terminal Operators – equipment overview Sources: Various Approx estimated replacement value = AUD 715M

17. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers B. Terminal Operators – 2004/05 & 2006/06 5 Port Performance Indicator Summary

18. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers B. Terminal Operators – the future outlook Australia’s total containerised trade  increased by 8% over the past 5 years  is forecast to grow over next 20 years by 5.4% pa (from 5.2M TEUs to 14.9M TEUs in 2024/25 (286%) Source: BTRA Working Paper 65 – ‘Container & Ship Movements through Australian Ports 2004/05 to 2024/25’: (08/2005)

19. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers B. Terminal Operators – the port interface Source: SPC Handbook 2006  Transport/logistics chain efficiency driven by  player interfaces  distance  location  mode  The more interfaces, the more risk  Stevedores rely on performance of other players

20. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers Performance  Reduce vessel turnaround time berthing windows, minimise restows, increased equipment [cranes, straddles], improved technology (terminal management systems, automated yard equipment) C. Industry issues  Reduce truck turnaround time Match R&D shifts to vessel working shifts Improved technology & processing (1Stop VBS, PRAs) Improved terminal handling (efficient terminal layouts, new equipment)  Maintain labour productivity Bonus vs OH&S/WCI Training, career opportunities

21. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers Competition  Reduce costs/increased efficiency? increased investment/labour, same throughput interface coordination (ships/terminal/trucks/train/cargo owners) C. Industry issues Source: Patrick Terminals

22. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers Future development  Terminals Reduced berthing windows/ larger vessels Improved stack density Improved road/rail interface Port land cost C. Industry issues Source: Patrick Terminals  Road/rail Increase rail capacity to 40% total landside exchange Adequacy of track and road access Intermodal/inland terminal development Landbridging options – East/West, Melbourne/Brisbane

23. 2. The Australian Stevedoring Industry context - Australian stevedoring service providers Port Security Terrorism legislation Vessel/Terminal/cargo security/access Increased regulation: surveillance/disclosure C. Industry issues

24. 3. Stevedoring risk management - key issues Managing the waterfront player mix – operational services  Vessels, terminal, trucks, trains, cargo owners: operating rules  Berthing windows  VBS  Rail windows  PRAs  Vessels: fit for purpose  Labour: productivity vs safety  Cargo care: security, safety (hazardous cargoes/DG’s)  Data: vessel stow plans, manifests, cargo documentation – accurate & timely provision  Storage: minimising terminal congestion  R&D: reasonable cargo cutoffs

25. 4. Legal considerations for stevedores Customer warranties  Is owner/authorised agent of vessel/container/goods?  Has customer accurately & fully described goods/containers & provided all necessary info/instructions re handling/care & control having regard to their nature?  Do goods/containers/vessel comply with all applicable laws & will customer provide stevedore with all assistance to enable compliance?

26. 4. Legal considerations for stevedores Customer warranties  Are goods packed to withstand ordinary risks of stevedoring?  Are customer vessel, containers, equipment in survey/fit & proper condition for stevedoring?  Has customer disclosed full description of any DGs or temperature controlled goods re stevedoring handling?  Will goods be removed within 3 days after discharge (unless otherwise agreed)?

27. 4. Legal considerations for stevedores Customer warranties  Will customer incorporate an effective Himalaya clause in the B/Ls, noting that stevedore will have benefit of the B/L provisions?  Will no other party make a claim against the stevedore other than the customer for stevedoring services?

28. 4. Legal considerations for stevedores Stevedore’s rights  Entitled to deliver goods to bearer of B/L  If stevedore believes goods are DGs or vessel/container/goods do not meet statutory requirements or are unsuitable for stevedoring, it may refuse to provide services or take appropriate measures to ensure compliance or safe to handle  Lien - stevedore can relocate or dispose of containers/goods not removed from wharf

29. 4. Legal considerations for stevedores Stevedores’ liability  Generally relates to stevedore’s negligent act/omissions  Excludes liability for inaccurate documentation  Generally excludes consequential losses  Subject to time bars (normally requires suit to commence 12 months from date of container/goods delivery or vessel arrival at facility or date of incident)  Force majeure  Broad definition  Extends to include storm/wind damage

30. 4. Legal considerations for stevedores Liability issues  Substandard vessel/container presentation  Vessels: AMSA Marine Orders  Containers: when is a unit too old?  Reefer containers/cargoes  Stevedores extensive reefer handling procedures  PRAs  vessel manifests  receivals  monitoring

31. 4. Legal considerations for stevedores Liability issues  DGs/Hazardous Goods  non/mis-declaration – description, handling  inappropriate presentation, packaging or stowage  Inadequate container presentation  overloading  poor packing  insufficient cargo packaging (protection & secural)  Truck damage  understanding terminal procedures  is truck suitable (ie, side lifters)?

32. 5. Summary Stevedores part of dynamic transport logistics chain  Relies heavily on other players’ performance – a 2 way street Stevedores operate in certain legal framework, with obligations clearly identified  No new obligations, but details changing Reduce risk of waterfront damage  Understand risks, improve procedures, educate staff The innocent stevedore – your call! Stevedores investing now for significant future growth  Focus on cost-effective service delivery  Interest in OS&H & vessel & cargo care, with minimised injuries, and minimised damage to vessels & cargo