The Rules have been designed to regulate marine cargo liabilities internationally and may ultimately replace the Hague Rules, the Hague-Visby Rules and the Hamburg rules in those countries that are signatories to those conventions.

The sixteen states who signed were Congo, Denmark, France, Gabon, Ghana, Greece, Guinea, the Netherlands, Nigeria, Norway, Poland, Senegal, Spain, Switzerland, Togo and the United States. China is a public supporter of the Rules but is not yet a signatory, whilst New Zealand, the United Kingdom, Singapore, Bulgaria, Slovenia, Japan, Finland and Crotia have not yet signed the Convention.

20 signatories are required for the new rules to come into force, and whilst the USA has been very vocal in its support of the rules, the European Shippers Council (amongst others) believes that the new rules could put shippers in a worse position than they were prior to the introduction of the original Hague Rules.

The Rotterdam Rules have been six years in the making, and are argued by some to be necessary to reflect the recent modernisation in trade practices as well as provide for industry needs in respect of cargo moving door-to-door.

Lowering worldwide consumer demand has already heavily impacted commodity prices. Profit margins have narrowed, and markets have diminished, which we expect to lead to increasing numbers of claims from buyers who reject goods on spurious grounds where previously they might have accepted them. Manufacturers and shippers also cut costs by using cheaper methods of packaging and shipping, and cutting the size of their workforce (often including the number of qualified staff and surveyors).

We also anticipate an increasing number of smaller claims as it becomes more profitable to pursue them; an increase in claims for theft because of organised crime and petty thefts; and an increase in abandoned cargo as buyers struggle to manage cash flow, access credit, or declare bankruptcy.

In a recent case regarding strict liability, PPG Industries Inc, a manufacturer and shipper of cal-hypo, was found liable for the loss of a 1,799-teu vessel, the DG Harmony and her cargo, after a fire broke out as a result of the water-purifying commodity being stored inadequately.

The judge remarked: “Although I have concluded that PPG was not actually aware of the full risks of shipping cal-hypo in 300-pound drums in the manner in which it was shipped here, I conclude also that the hazard was reasonable, as there were sufficient red flags to have caused PPG, in the interests of reasonable care, to have investigated further the dangers presented.”

Ruling
The court ruled PPG was strictly liable to the vessel and other cargo interests under the US Carriage of Goods Act, even though the claimants were not party to the bill of lading contract. PPG was negligent for not conducting appropriate safety tests on the method of storage they chose, and failed to warn the carrier of the known risks of cal-hypo, an unstable commodity with a history of costly accidents.

Implications
Information set out in the IMDG code for the shipment of dangerous goods is a guideline only. Full information and warnings relating to the risks of cargo, both actual and possible, should be supplied to the carrier by the shipper, and further investigations conducted if in any doubt.

The carrier must be in a position to make the decision to carry dangerous cargo on the basis of “informed consent” and shippers should be aware that this ruling will have an impact on them if they do not pass on full and thorough information to the carrier.