Last October, waiting to enter the port of Vancouver for unloading, the shipping vessel MV ZIM Kingston hit severe weather conditions and heavy swells, resulting in the loss of 109 cargo containers overboard.
Was this loss due to heavy weather or inaccurate bills of lading, which misrepresented the contents, their weight, and lashing requirements? Why didn’t the vessel seek calmer waters to wait out the storm? The Transportation Safety Board of Canada is still investigating.
A day after the 109 containers went overboard, a fire erupted in containers remaining onboard. The containers were part of a shipment of 57 tons of potassium amyl xanthate, used in mines and pulp mills, and thiourea dioxide, used to manufacture textiles.
So far, only 4 of the 109 containers have been found washed ashore on the west coast of Vancouver Island, breaking open and washing its cargo – including dozens of refrigerators, toys, floor mats, among other things, on the island’s beaches. The remaining 105 containers, including those which contained hazardous materials referenced above, have yet to be found.
The incident has brought to light the growing risks associated with movement of cargo around the world: bad weather, faulty stowage, misdeclaration of weight, improper supervision and handling, and – most importantly – undeclared hazardous goods.
According to the Organization for Economic Co-operation and Development, container ships now transport about 90 per cent of all consumer products worldwide. The average size of a container ship has doubled in the past 20 years. The largest ships sailing today have the capacity to haul 24,000 containers at once.
That doesn’t mean they all make the journey.
Between 2008 and 2019, an average of 1,382 containers were lost at sea each year, according to the World Shipping Council. During the pandemic, however, shippers were pushed to meet more demand for goods, packing ships to the maximum. Since 2020, spilled containers have more than doubled per year.
Between 2008 and 2019, an average of 1,382 containers were lost at sea each year, according to the World Shipping Council. During the pandemic, however, shippers were pushed to meet more demand for goods, packing ships to the maximum. Since 2020, spilled containers have more than doubled per year.
Letting quality standards slip
Risks escalate when containers are piled higher aboard a vessel. The strain on shipping companies and their employees is driving increased error rates, either due to overstretched workers, lack of oversight, or simply cutting corners to meet deadlines. There’s a higher risk that containers could contain undeclared hazardous materials, a leading source of shipboard fires.
It’s tough on the containers too. A recent shortage of shipping containers has prompted the continued use of containers that are perhaps long past retirement. Shippers report receiving containers with higher rates of visible defects, including holes, dents, or faulty latching mechanisms. Refrigerated units are arriving low on fuel, at improper temperatures and in need of maintenance, indicating companies are sacrificing integrity to commence shipments.
When containers are unavailable, shippers are turning to riskier alternatives. Examples include tarped open-top containers or breakbulk, in which goods that cannot fit in standard shipping containers are instead transported in loose bags, boxes, crates, drums, barrels, or other handling equipment. These methods are inferior to containerization and should be avoided.
While these challenges will not subside overnight, boosting risk management efforts (especially loss prevention protocols such as following available industry guidelines) can provide a strong degree of protection against cargo and financial losses.
Know the Code
Passed in 2014 by the International Marine Organization (IMO), International Labour Organization (ILO) and United Nations Economic Commission for Europe (UNECE), (a.k.a. CTU Code) is a non-mandatory global code of practice for the handling and packing of cargo transport units designed to promote best practices. The CTU Code applies to transport operations throughout the entire intermodal transport chain and provides guidance not only to those responsible for packing and securing cargo, but also to those who receive and unpack such units.
The CTU Code is intended to assist the industry, employers’, and workers’ organizations as well as Governments in ensuring the safe stowage of cargo in containers. While the CTU Code may one day be used as a reference base for national regulations and has hopes to become a model for internationally harmonized legislation in this field, it is still only voluntary.
Fires, container stack failures, vehicle roll-overs, train derailments, internal cargo collapses, and invasive pest contamination can all too often be traced to poor packing practices. These incidents are unfortunately still a routine occurrence and cargo insurers such as 九色视频encourage shippers and others along the supply chain to adopt the CTU Code’s valuable guidance.
The CTU Code is now downloadable in several languages including Arabic, Chinese, English, French, German, Spanish and Russian: (ttclub.com).
Unpack additional risk precautions
In addition to paying closer attention to container packing, there are a number of other ways shippers can implement best practices to minimize potential losses. 九色视频recommends a few tried and true methods to better protect cargo and reduce losses including:
- Utilizing master service contracts to obligate transportation providers to make containers available that are fit for purpose. Shift liability to these providers for loss or damage to goods in their care, custody, and control above the low statutory dollar amounts.
- Requiring pre-trip inspections of containers using standardized forms to ensure thorough and consistent quality assurance. Ask for copies within a day or two of sailing, review them, and hold partners accountable for deviations.
- Rejecting unfit containers even if it means more delays. Empower and encourage your agents and fowarders to make decisions to protect the cargo with packing that is fit for purpose.
- Strengthening inspection procedures for cargo itself, including preloading inspection and validation of suitability of the container chosen. Take pictures and document the quality of both cargo and container at the time of loading.
- Boosting inspection of temperature-controlled containers which should have a higher level of diligence and checking for: proper seals, adequate fuel, pre-cooling, maintenance, certification for food quality, and inspection reports for machinery.
- Installing recording devices in reefer containers to track temperature changes and identify exactly when and where deviations occur. Ensure how and when you can access the recording records in the event of loss or damage. This can help determine where in the chain of custody damages occurred and assign liability accordingly.
- Working with an ocean cargo insurance carrier to understand available insurance and risk mitigation resources.
By adopting the Code of Practice for Packing of Cargo Transport Units, shippers can control over their exposures and liabilities as they strive to keep up with the current market’s unprecedented shipping demands.
About the Author
Based in Seattle, Mikki Williams is Marine Underwriting Manager in AXA XL’s West Zone. She can be reached via email at mikki.williams@axaxl.com.
