August 12, 2023

A cautionary tale of a prepaid shipment that ended up rotting


Every week, FreightWaves explores the archives of American Shipper’s nearly 70-year-old collection of shipping and maritime publications to showcase interesting freight stories of long ago.

This article comes from the January 1976 issue of American Shipper and offers a cautionary tale of a rotting shipment that had already been paid for.

Demuwerk pre-paid freight on ship troubled with debts; Cargo rots while lawyers ponder next moves

In early November, Demuwerk, S.A. of Belgium bought 5892 metric tons of diammonium phosphate (DAP) from an American fertilizer producer and looked forward to delivery of the cargo at Bordeaux, France during the month of December.

The cargo was to be transported aboard a Cypriot flag vessel named M/V Galaxy Faith which had been built at Abderdeen, Scotland only 18 years ago as the M/V Insco Producer but had come upon hard times, been purchased by a firm known as Lyra Shipping of Nicosia, and allowed to deteriorate until her value — even for scrap — was nominal.

Demuwerk pre-paid freight on the cargo, valued at more than $1,000,000, and the ship was loaded at Donaldsville, La., on the Mississippi River north of New Orleans.

Galaxy Faith had experienced troubles even prior to her loading at Donaldsville. After picking up Demuwerk’s cargo, those troubles seemed to mount and the Belgian firm found itself caught in the middle — the innocent victim of circumstances over which it had no control. (Except, of course, if it had investigated further before pre-paying its freight.)

At Christmas time, when Demuwerk had expected the cargo to be safely ashore at Bordeaux, it was still sitting in the Galaxy Faith moored to an abandoned pier in Jacksonville, Florida. The ship’s crew was being repatriated under orders from a U.S. District Judge. The ship had been taken out of class by Lloyd’s Register of Shipping. And the cargo itself was reported deteriorating due to moisture. Value of the ship was believed to be less than the cost of repairs and there was considerable evidence that she would be abandoned, to be fought over by attorneys.

Demuwerk, meanwhile, was struggling to get its cargo off the ship. Consideration was being given to transferring the DAP to LASH barges which could come alongside. At this writing, decisions were still in doubt.

Prior to picking up the cargo of phosphate in Donaldsville, La., the Galaxy Faith had undergone generator repairs at Talleres Technico Marina, S.A. in Panama. Apparently in seagoing condition the vessel left for Houston to pick up supplies.

The events

Meanwhile, Demuwerk had purchased the phosphate from Agricultural and Industrial Chemicals of New York, and Agrinde Shipping Corporation chartered the Galaxy Faith to deliver the cargo of phosphate to Bordeaux.

The ship called on Donaldsville and picked up the cargo. A few days later while off Fort Pierce, Florida, the ship had a generator failure and technicians were sent out to the ship to perform tests. During one test on November 12, there was a fire in the engine room. The Coast Guard assisted in putting out the fire with only minor damage to the ship.

On November 15, the vessel was diverted to Jacksonville by its owners and underwent emergency repairs at Jacksonville Shipyards, Inc., including some work to the generators.

Suits filed

On November 24, Talleres Technico Marina, acting through Tampa attorney Earl R. McMillin, filed suit against the Galaxy Faith and its owners and had the ship arrested by the U.S. Marshal. The owners were given two weeks to claim the ship and pay the $14,325.60 bill.

Delta Marine Supply Corporation received permission to intervene in the suit November 25 to collect for supplies delivered to the vessel on October 31 in the amount of $11,228.11.

Farboil Company, a division of Beatrice Foods Company, intervened on November 26 for supplies it had delivered to the ship in the amount of $1,893.84. Jacksonville Shipyards joined the others and intervened in the suit when it became apparent that the ship was probably abandoned, leaving them with an uncollected bill of $18,375 for work they had performed on the ship.

On December 11, Gulf Steamers Supply Company of Louisiana filed suit and intervened in the case to collect $25,899.81 for an unpaid balance for supplies delivered to the vessel between August 1974 to August 1975.

The largest suit against the vessel and its owners was one by Demuwerk for $1,160,655.76 for unspecified damages. Included as defendant in that suit was Agrinde Shipping Corporation which had chartered the vessel.

The status of the cargo at the time of publication was understandably confused.

On December 8, seven days before the Demuwerk suit was filed, John B. Culp, Jr., attorney for Demuwerk, petitioned Federal Judge Charles R. Scott of Jacksonville to permit the removal of the cargo. Because the freight has been prepaid, the cargo belonged to Demuwerk and none of the suits to that time or in the week following had made any claim against the cargo.

Removal of cargo

Since Culp had not yet received authorization from Demuwerk to remove the cargo, no plans had been made as to how to remove the cargo, and no one could say whether the cargo was worth removing, Judge Scott deferred a decision on permitting removal of the cargo. At the same time he refused to issue an order to sell the ship since disposition of the cargo would affect any sale.

Roger Parry, with Toplis and Harding, Inc., Lloyd’s agent in Jacksonville and representative for Hendry Vote Genicot, Belgian underwriter for the cargo, said that no problem was expected in getting permission to remove the cargo.

There is some question, according to Parry, as to how much of the cargo can be saved. Since the DAP phosphate is granular and free-flowing, water can cause the granules to break down releasing the beneficial elements in the phosphate and destroying it.

In addition to the ship’s other problems, there is a crack in the below the water line which permits water damage to a portion of the cargo in the number one hold. A cement box has been placed over the crack, eliminating most of the water seepage and stopping the spread of the water. How much of the cargo in the hold can be removed without further water damage is unknown.

Assuming Judge Scott permits removal of the cargo, Demuwerk has two options open to it. They can have the cargo loaded on LASH barges and send it to Europe, selling it in route, or have it removed and stored in Jacksonville for sale in the area.

Parry said trying to sell the phosphate in Florida, one of the world’s largest phosphate producing areas, might prove as difficult as “selling coals to Newcastle.” Selling the cargo in Europe, on the other hand, would not be too difficult, according to Parry.

If the cargo is to be loaded on LASH barges, Parry said a floating crane would probably be employed and operate between the Galaxy Faith and the barges lifting the phosphate from the ship and dumping it in the barges. Taking the vessel to Tampa or Savannah where bulk loading and discharging equipment were available is not considered practical because of the cost involved.

If the cargo is discharged to be sold domestically, cranes would probably be used to discharge the cargo into rail cars or trucks.

FreightWaves Classics articles look at various aspects of the transportation industry’s history. Click here to subscribe to our newsletter!

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