THE PACIFIC INSPECTION J.

S COMPANY
Head Office: 71 & 73 Le Quoc Hung Street - District 4 - Hochiminh City - Vietnam
ISO 9001 : 2000 Tel: (84.8) 8.26.27.88 Fax: (84.8) 8.26.27.99 E-mail: pico@ hcm.fpt.vn

PRELIMINARY REPORT Date: Sep. 12, 2005

To : SPICA SERVICES
Attn : Mr. Tran Viet Hung
Email : hungspica@hcm.fpt.vn
Your Ref. No. : CMP/006/05/VN/TVH
Our Ref. No. : 11303M/DN
From : Mr. Pham Minh Nguyen
Number of page : 5+

Subject: M/V "SINAR PADANG" - Alleged container damages due to stevedore - Quinhon
port of Vietnam, on Sep. 05, 2005 at 1320 LT

Dear Sir,

We refer our prelim, and would updated you on the matter development as followings:

1. Introductions:
Following the information reported, we – in conjunction with concerned parties – had
carried out further inspections on damages to container and their cargo containing:
- On Sep. 06, 2005, the container No. INKU 2256056 had been opened for Custom
check, with the cargo visually found in sound condition. And before lifting onto
truck for transportation to the consignee warehouse, on Sep. 08, 2005 at 0830 LT, we
had carried out the joint inspection to record all the damages sustaining to the cargo
and container. And then, the joint survey record was counter-signed with
representative of consignee.
- On Sep. 07, 2005 at 1600 LT, during open container GESU 4737011 for Custom
check, the cargo condition had been jointly checked with the present of consignee
and Vietfracht / APL surveyor (Vinacontrol), and our joint survey record had been
signed. And all damages sustained to the container had been recorded thereafter.
- Generally, all the cargoes of both containers were accepted to receive as sound ones
without claim, and our survey records jointly signed with consignee representative.
But damages sustaining to the containers are noticeable.
- As reported in our preliminary, we had checked on the cargo weight of container
GESU 4737011 and no overload found.
 No. 11303M-RP2
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2. Damage to container No. GESU 4737011:

At the time of joint inspection Sep. 07, 2005 at 1600 LT, the container GESU 4737011 was
laying on the open yard of Quinhon port. Carefully inspect the damages sustaining to the
container and cargo with representative of consignee (Doanh nghiep tu nhan Viet nhat -
Mr. Tran Van De) and APL surveyor (Vinacontrol Quinhon – Mr. Truong Hoang Viet), we
recorded:

2.1. Damage to the container GESU 4737011:

The details of damage sustaining to the container was recorded:

- Left hand side panel: at location of approx. 150cm from door, the panel got
exaggeratedly / heavily deformed of approx. 244cm (L) on entire the corrugation panel
breadth. Within this deformation area, approx. 246cm away from the door and close to
the left hand top side rail, the panel was torn in L form dimensioned approx. 100cm(L)
* 7cm(W).

- Right hand side panel: from location of approx. 170cm away the door, the panel got
heavily deformed of approx. 316cm (L) on the entire corrugations panel breadth. In this
deformation area, approx. 260cm away from the door and close to the right hand top
side rail, the panel was torn and open holed with dimensions of approx. 80cm(L) *
25cm(W).

- Corrugated roofing panel: from location of approx. 160cm away the door, the panel got
seriously deformed – both in convex and concave – in an area of approx. 280cm(L)
overall the panel breadth. The roofing panel was longitudinally torn along to the topside
rails: left hand section from location 140 cm to 280cm away the door, and at right hand
side section from 280cm to 440cm away the door. At rear end areas, the roofing panel
got slightly deformed.

- Top side rails: at the left and right hand side, both the top rails got fully broken and
partly loosen of approx. 35cm(L), and distorted at location of approx. 240cm to 280 cm
away the rear door.

- Left hand side bottom rails: at area of approx. 380cm away from the door, the bottom
rail got heavily bent / deformed and angled with it’s original profile of approx. 8 degree.
The bottom rail’s web and flange got slightly dented or bulged at some places at
adjacent area
 No. 11303M-RP2
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- Right hand side bottom rail: at location of approx. 430cm away the door, the bottom rail
got heavily bent / deformed and similarly angled with it’s original profile of approx. 8
degree. The bottom rail’s web and flange got slightly dented or bulged at some places at
adjacent area

- The front panel was slightly bulged at center area of approx. 50cm above the floor.

- Cross member and other floor structures: could not be checked at time of joint survey.

And generally, at area of approx. 260 cm from rear, the container was seriously concaved
and deformed, formed with it’s original axis an angle of approx. 8 degree, as a results of
both the top side rails were broken, the bottom side rails heavily bent and deformed as well
as distortion and torn on the roofing and side panels.

Comment: The container got seriously damaged around the rear end, and its repairable
abilities should be considered further.

2.2. Cargo condition:

Together with consignee representative, we had opened and check for the cargo condition
and recorded:

- Cargo: 39 pieces of used stone cutting machine

- Condition: in sound condition without damage

- Cargo stowage / dunnage / lasing: the pieces of the used stone cutting machine – at
different sides and shapes – were directly stowed in the container without lashing or
dunnage apply.

The cargo was accepted to receive as sound one without claim.

3. Damage to container No. INKU 2256056:

After opening for custom formality check on Sep. 06, 2005, the container was left on the
Quinhon container yard in open condition. Carefully inspect the damages sustaining to the
container and cargo – on Sep. 07 and 08, 2005 - with representative of consignee (North
east trading & service Co., Ltd. - Mr. Ta Ngoc Tan) and APL (Mr. Bui Ngoc Thinh –
Viconship), we recorded:
 No. 11303M-RP2
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3.1. Damage to container INKU 2256056:

- Left hand side panel: exaggeratedly bulged an area of approx. 334cm(L) * 240cm(W) at
location of approx. 250cm away from door

- Right hand side panel: exaggeratedly bulged an area of approx. 400cm(L) * 240cm(W)
at location of approx. 270cm away from door

- Corrugated roofing panel: from location of approx. 350cm away the door, the roofing
panel was indent at both sides and deformed down in an area of approx. 540cm(L)
overall the roofing breadth.

- Left hand side top rail: heavily bent inward in an area of approx. 220cm(L) of approx.
7cm max. – at location of approx. 250cm away the door

- Right hand side top rail: heavily bent down of 8cm max in area of approx. 280cm(L) at
area of approx. 260cm away the door

- Other component: visually in normal worn and torn condition.

3.2. Cargo condition:

Together with consignee representative, we opened container and checked the cargo
condition and recorded:
- Cargo: 43 logs of “eucalyptus grandis sp fresh cut logs” or approx. 26.590 MT
- Condition: in sound condition
- Cargo stowage / dunnage / lasing: the logs were longitudinally / orderly stowed in
container without lashing or dunnage.
The cargo was accepted to receive as sound one without claim, and record counter-signed.

4. Further information / comment:

According to the information supplied by concerned parties, basing on our results of

inspection, we would comment as followings:
It’s unsafe for 40’ container working by slings in the Quinhon port. We noted that the
container load of GESU 4737011 is not excess the full load, but seriously destroyed when
lifting up by slings and touch to the cell guide.
 No. 11303M-RP2
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The damage occurred to the containers is attributed to the negligent of Quinhon stevedore
during unloading by slings, and combination with touching to the cell guide, which
collapsed to container GESU4737011 and damaged to container INKU 2256056.
No claim to the cargo damage announced, and they were all received as sound ones. Most
of involving damages are sustaining to the container (owned by APL and Lloyd Triestino).
We are now investigating on the local cost of repair of relevant container and will inform
you soonest.

Best regards,

Pham Minh Nguyen

Enclosure:
Available documents and photos in one attached file.