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September 29, 1972

du PONT de NEMOURS INTERNATIONAL S.A. and E.I. du Pont de Nemours & Co., Inc., Plaintiffs,
The S.S. MORMACVEGA, her engines, boilers, etc., and Moore-McCormack Lines, Inc., Defendants

Brieant, District Judge.

The opinion of the court was delivered by: BRIEANT

BRIEANT, District Judge.

Plaintiffs du Pont de Nemours International S.A. and E.I. du Pont de Nemours & Co., Inc., Delaware corporations, have brought this action in rem against the S.S. MORMACVEGA, and in personam against her owner and operator, Moore-McCormack Lines, Inc., a Delaware corporation having its principal place of business in the City and State of New York. The action, tried before me without a jury on May 1 and 2, 1972, seeks to recover damages for cargo lost overboard at sea, one ocean shipping container containing 38 pallets of synthetic resin liquid.

 Defendant was a common carrier of merchandise by water for hire. The synthetic resin liquid was the product known as "Teflon", and is not explosive, inflammable, nor otherwise dangerous.

 The shipping container was delivered by a freight forwarder employed by E.I. du Pont de Nemours & Co., Inc. to Moore-McCormack's pier in New York City on April 28, 1967, consigned to du Pont de Nemours International S.A. In consideration of the agreed freight, Moore-McCormack agreed to carry the ocean shipping container, as a common carrier on the MORMACVEGA to Rotterdam, and issued its straight (or "clean") bill of lading, Exhibit 1.

 The shipping container was stowed on deck at New York. It was lost at sea at about midnight on May 5/6, 1967. This cause is within the admiralty and maritime jurisdiction of this Court.

 MORMACVEGA was built new in 1964 as one of a group of vessels (the "Constellation" class) intended for the transportation of general cargo. Such cargo was then loaded on what is described for convenience as a "break-bulk" basis, that is to say, in such packages or crates, or on pallets as received from a consignor, or loose in cargo nets, and stowed by the stevedoring department of Moore-McCormack with such dunnage as circumstances required.

 In 1966, MORMACVEGA was converted and reconstructed so as to be a combination break-bulk and container cargo vessel. Substantial structural changes were made, including the installation of a flume stabilization system to dampen the roll of the vessel, modification and strengthening of the hatches, and installation of support pedestals so as to permit ocean shipping containers to be stacked in tiers, three high, and so lashed and carried in safety. The pedestals consisted of twelve inch steel, with brackets at each tier level, cap plates, sockets and related gear, all specifically designed for the sole purpose of holding and carrying ocean shipping containers on deck. The conversion had the result of placing the vessel in the same structural situation as if she had been designed and constructed from the keel up, as a container ship.

 After this conversion, which was accomplished at great expense, said to be in excess of $385,000.00, MORMACVEGA was duly surveyed in Baltimore on September 12, 1966. Her conversion for this combined usage, and open carriage of containers on deck was approved and the vessel recommended to be, and she was, retained in class. The extent and nature of the conversion is fully described in Exhibit A, and in the Spring of 1967, MORMACVEGA represented the best possible state of the art in the ocean transportation of shipping containers.

 The theory or design of the conversion was that most of the containers would be carried on deck. Some containers, however, were to be carried in the hold. The number of containers stowed below deck on any particular voyage depended solely upon the quantity of break-bulk freight also being carried below, but approximately 35 containers could be stowed below deck. Ocean shipping containers as referred to herein, measure 40 feet in length, 8 feet in width and are 8 feet high, although in some locations, two "half-containers" with a total length of 40 feet were carried, instead of one. The total capacity of MORMACVEGA was 135 containers of 40 feet in length.

 An unstructured procedure dictated by the practical necessities of the trade was followed in determining container stowage. In the first instance, as noted above, the amount of break-bulk merchandise being carried on a particular voyage determined the amount of cargo space left below deck for containers. If there were a large amount of break-bulk freight, few, or perhaps no containers would be carried below deck. The balance of the containers would be carried on the deck.

 In determining the stowage of the vessel for a particular voyage, the stevedoring department of Moore-McCormack considered first, the amount of cargo space left below deck for containers after accommodating the break-bulk freight. To the extent possible, depending on the port at which the container was to be discharged and its time of arrival for loading, containers containing merchandise of great weight, containers holding items which had to be protected from freezing or atmospheric conditions, and containers available for loading early in the loading plan, which could be discharged after the deck containers had been removed, were stowed below deck. In 1967, no standard policy regulated the placement of containers, other than as herein set forth, except that containers holding explosive or inflammable material were generally loaded on deck, and containers to be discharged at the first port of call and containers which arrived late for loading, were usually placed on the deck. Presumably, to the extent possible in stacking containers on deck, the heavier containers were, in order to improve the vessel's stability, placed in the lowest of the three tiers.

 Container shipping is a relatively new method. The practice of carrying containers of miscellaneous freight on merchant vessels began in 1956 in the carriage of containers entirely on deck, by Sea-Land in the Puerto Rican trade. These containers, in effect, were the bodies of trailer trucks and on arrival, wheels were fitted to them and they were transported as highway trailers. The vessels first used were tankships, carrying no cargo below decks.

 In 1966, container shipping gained acceptance in the North Atlantic trade, and Moore-McCormack was one of the pioneers in this type of carriage from the port of New York. Those engaged in the North Atlantic trade in April, 1967, including defendant, carried all, or a portion of their load of containers on deck.

 It was common practice to issue clean bills of lading where a container was stowed on deck. This practice had been followed in the Puerto Rican trade, and as a practical matter, shipping companies often issued the bill of lading (in lieu of a dock receipt) on arrival of the cargo at the pier, before the stevedore had established a complete plan of loading, and before it could be foretold with any certainty whether the particular container would be loaded on deck or below deck.

 The contract of carriage affecting plaintiff's container is regulated by COGSA. Defendant offered no evidence to explain the cause of the loss. Defendant has abandoned the defenses raised in its answer based on due diligence used to make the vessel seaworthy, properly manned, equipped and supplied, etc., originally alleged to avoid all liability, pursuant to COGSA. Defendant also abandoned at the trial defenses previously asserted that the loss was occasioned by a peril of the sea in the nature of an unusually severe ocean swell, acting alone, or together with negligence of the Master in navigating on an unsafe course with respect to the ocean swell, or at an unsafe speed.

 Accordingly, the plaintiff is entitled to judgment. The sole issue in the case is whether or not the carrier may limit its liability to $500.00 per package, pursuant to 46 ...

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