After a 12-day lockout, cargo began trickling across the docks on the west coast of the United States yesterday, leaving carriers in the familiar position of having to count their losses. Some shipping lines have in the past decade tried to offset the traditional feast-to-famine volatility of the container shipping trade by diversifying into terminal operations. But for those which acquired stakes in terminals on the west coast, that may now backfire in light of the lockout. Carriers are largely exempted from claims for loss or damage resulting from 'strikes, lockouts or restraint of labour, whether partial or general' under the provisions of the 1996 Carriage of Goods by Sea Act (Cogsa). That is unless they played a part in causing the labour to be locked out, which appears to be the case with lines such as Maersk Sealand and Hanjin Shipping, both board members of the Pacific Maritime Association (PMA). The PMA locked out union workers after work to rule campaigns slowed productivity on the docks. '[Cogsa] should provide owners/operators with a good defence, unless of course [they are] also the operator of terminal and is the employer that has locked out the longshoremen,' Hong Kong-based law firm Healy & Baillie said in interpreting provisions of of the act. 'In that case, the cargo interests will no doubt argue that the proviso applies to eliminate the carrier's right to rely on the strike exception.' Healy & Baillie commercial maritime lawyer Nigel Binnersley said it was unclear whether that also made the terminal operating carriers culpable for cargo on non-affiliated lines, but he expected those issues to be played out in US, British and Hong Kong courtrooms over the next few months. 'People are being very sensible so far. The shipping lines I have spoken to seem fairly comfortable,' Mr Binnersley said. 'But the sums involved are very large, so that may or may not change.' It is difficult to quantify the aggregate losses for the Grand Alliance, more than half of whose vessels were disrupted by the lockout. Singapore's NOL Group has estimated its carrier loss to be US$10 million, in line with the Hong Kong Liner Shipping Association's (HKLSA) projection for major transpacific players. One executive for a carrier from within the HKLSA said the association might be well short of the mark. Rather than look at direct losses, he preferred to cite the loss of potential revenue, which he pinned at the peak season eastbound transpacific freight rate, presently US$2,150, per available slot. With about 300,000 boxes estimated to have been delayed during the lockout, that formula would see industry losses in the hundreds of millions. A local shipper, however, said it was hard to see how the carriers would have bills to pay on that scale. 'If you read the small print at the bottom of the bill of lading, carriers are well protected,' he said. In fact, one consultant said the lockout has the potential to work to the carrier's benefit. For several lines, force majeure, a legal term which means 'unforeseeable circumstances' or 'irresistible force', has already become part of their lexicon. According to maritime contract law, when the freight-payer books space on a vessel the company enters into a joint-venture contract. It does not buy a transport service. Shared risk is part of the agreement and declaration of force majeure brings that into effect. 'What this means is the line can go to the freight payer and say 'the joint venture was a failure and these are our losses'. They become partially recoverable,' the consultant said. Moreover, force majeure could allow carriers to suspend the unprofitable service contracts which presently restrict loss-recovering rate increases to about 20 per cent of cargo crossing the Pacific from Hong Kong. 'They may be able to recover significant amounts - 20 to 50 per cent - of their losses,' the consultant said. 'Tack that on to the potential to shed contracts and large increases in the demand for capacity and it can turn things around very quickly.' If the carrier owned a terminal that was determined to have effected the lockout, however, that windfall would probably be mitigated.