Ship and Cargo Surveying

Marine vessels are often subject to surveys, for many reasons. A potential owner will usually want a detailed survey of the ship before a decision is made, or an insurance company might need to assess a claim following an accident. Sometimes, surveys of cargo are even carried out if there’s a suspicion of fraud among the ship’s personnel.

A survey of the ship’s cargo may need to be carried out in order to address safety and liability concerns. There are cargo surveying services in many ports around the world, ready to help customers, owners and anyone else with an interest with their concerns. In some cases, insurance companies and government agencies may also want to have a cargo survey carried out. Cargo surveyors can be independent or employed on behalf of a company.

Marine or Ship Surveyors have a wider remit, which sometimes includes a cargo survey too. A surveyor will board a vessel to assess, monitor and report on its condition, including the cargo if requested. Marine surveyors can also inspect brand new ships’ equipment to make sure that it’s safe for use on a vessel.

A marine survey usually involves a detailed inspection of a ship’s structure, machinery and equipment, along with an assessment of its general condition. Marine Surveyors are highly qualified professionals and have to pass several evaluations before they are qualified to approve vessels to go to sea.

Surveyors are often called in on behalf of insurance companies, because of the specialised area they deal with. Most insurers wouldn’t have the level of skill or training to be able to assess a vessel’s condition, and so independent surveyors are often hired to provide a professional and completely unbiased view.

If cargo is being surveyed, the surveyor will usually take a careful look at all of the ship’s cargo areas, in addition to asking for selected cargo to be opened. They may also want to talk to the ship’s personnel to discuss how it was loaded or is to be unloaded. If the cargo isn’t yet loaded up onto the ship, the surveyor can ask for it to be moved to a suitable place, such as a warehouse, while the loading plan is assessed. You can expect a cargo surveyor to bring a camera and take photographs and notes while they move around the cargo area and ship.

Some of the issues that might arise during a cargo inspection include:

• Correct documentation

• Illegal or questionable items

• The ship’s destination imposes restrictions on incoming cargo

• Safety issues and hazards

Cargo surveyors also want to check that any cargo is properly stowed, securely fastened and evenly distributed. They can ask for cargo to be moved if they have safety concerns.After reviewing a planned cargo a report will be prepared, and any documents that are needed for moving the loads between ports are drawn up. A review of the contents can also be drafted for insurance purposes or in cases where a ship owner suspects fraudulent activity.

What is the Baltic Dry Index?

The Baltic Dry Index, also known as the ‘Dry Bulk Index’ is a way of measuring the cost of transporting raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange looks at twenty different worldwide shipping routes for various materials every working day and averages them into one index. This Index is made up from three separate sub-indexes which apply to different sized merchant ships, or ‘dry bulk containers’, Capesize, Panamax and Supramax. 

The Baltic Exchange is the official London-based shipping global marketplace used for brokering shipping contracts which was created back in 1744. The Exchange contacts shipping brokers on a daily basis in order to assess the cost of transportation for any specified route, product to transport and the time (speed) to delivery. The index is quoted every working day at 1300 London time. 

These indexes are useful to traders, who use them to settle forward freight agreements, and they are used by investors and economists to find out about the current demand for shipping services contrasted with total shipping capacity.

When the BDI increases, the increase directly increases their margins and revenues, but when it decreases, producers see increased margins, and consumers get lower prices for their goods.The Baltic Dry Index is generally thought to be a good indicator of global trends in supply and demand, and a trustworthy indicator of future economic growth and contraction, because it looks at the value of the type of cargo that isn’t usually speculated on; raw, pre-production materials.Although the BDI has been a reliable way of predicting performance for centuries, the supply of large carriers tends to remain very tight and sometimes long lead times and high production costs can lead to volatility when the global demand for a particular route or cargo increases – or even unexpectedly drops. An example of this was back in 2008, when on June 5th(Capesize) bulk carrier was fixed at a record daily hire rate of $280,000 per day, but within the space of five months, the value of the same ship had plummeted to just $2,800 per day.

Overall, the BDI is considered to be one of the most useful indicators of global raw material and infrastructure demand, as it’s unaffected by consumer spending trends, or speculative players. The trading activity on the BDI is limited to member companies, so it only applies to parties who actually have ships or cargo.