July 2008 | Commentary | Risks and Rewards

A Matter of Life and Death

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Q: I am a freight forwarder providing a service in which I deliver ISO tanks to my customer, who fills them with hazardous liquids and gas. Once the tanks are filled, I arrange to have them transported from my customer's facility to their destination, usually in a foreign country. I recently read about a case where a tank filled with odorless, colorless argon gas had been delivered to a port for ocean shipment. The tank developed a leak at the port, and three dock workers were overcome by the fumes and died. I am concerned that I might one day face a case like this one. What should I do?

A: Tragic as this case is, the unfortunate reality is that such situations are becoming more common. A recent case addressed a similar situation with less dire consequences.

An operator arranged to have a tank of ammonia gas delivered to Panama. While at the port, the valve on the tank sprang a leak, and a port worker was overcome by the fumes. The dock worker's illness in that incident was not fatal, but his exposure to the ammonia was severe enough to require medical treatment.

The severity of these cases raises fundamental questions about the handling and storage of dangerous substances. Existing guidelines require that qualified personnel handle this cargo and owners periodically inspect their tank containers.

In spite of the rules, accidents still occur because service providers fail to perform these actions. The greater your involvement in handling dangerous substances, the greater your risk of exposure.

Complications arise when you perform transportation services for one or more segments of the shipment, while relying on third parties to provide others.

Although your responsibility is related to the extent of your involvement in handling the material, bear in mind that the extent to which you are responsible for the acts of third parties will also affect your liability. The protections you secure for yourself when choosing those providers will therefore be significant.

In a recent case, a ship operator leased a chassis from a leasing company and arranged for a trucker to transport a tank container containing a corrosive colorant. During transit, an accident occurred and the corrosive material leaked onto the road, creating a dangerous condition.

In a vicarious liability jurisdiction, the steamship line and trucker would be held equally responsible for injuries resulting from the road accident, even though the ocean carrier did not actually handle the unit.

Forwarders who have no involvement in the actual handling or transportation of goods are nevertheless often accused of breaching their professional responsibility by failing in their duty to hire qualified third-party providers.

If you own tanks and make them available for customer use, you must comply with mandatory equipment guidelines. If you lease tanks from third parties or transport goods in tanks that your customer owns, ensure that you receive the proper indemnification from the party responsible for equipment maintenance.

If you arrange with third-party providers to transport a unit, make sure they are duly qualified to perform their services, and ask them for an indemnification for any accident arising from their services.

In every case, satisfy yourself that both your shipper and your service providers are properly insured for their operations.

Finally, if you do become involved in an accident, notify your insurer immediately to have the situation assessed by a qualified surveyor. While you may be powerless to prevent a claimant from taking you to court, a properly documented transaction will help your defense.

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