Container availability and stuffing in the time of COVID

By Captain Andrew Kinsey, Senior Marine Risk Consultant, Allianz Risk Consulting LLC, and Member of the IUMI Loss Prevention Committee

During these times of unprecedented supply chain disruptions, the stranded loaded container has garnered much of the news interest. However, the nature of the container trade is that it is at its roots a circular trade route with the cargo hauling mechanism, the Twenty-Foot Equivalent Unit (TEU)/Forty-Foot Equivalent Unit (FEU), a reusable container. As a result, the back haul, or return of empty containers, is a critical component of the supply chain. The physical condition of the TEU/FEU is also of the upmost importance. Due to the nature of stowage and securing aboard a modern container vessel, the integrity of each container is vital to the integrity of the overall stow.

As the last 18 months have shown us, the overall supply chain is quite delicate and subject to disruptions because of port closures and cancelled sailings. The bottom line is if the empty containers, or back haul cargoes, do not return the containers to where they are needed then follow-on freight cannot be loaded. It is also critical that the physical condition of the container is suitable for continued usage.

The Convention for Safe Containers (CSC 1972) adopted by the United Nations and the International Maritime Organization (IMO) in 1972 has two goals: one is to maintain a high level of safety of human life in the transport and handling of containers by providing generally acceptable test procedures and related strength requirements, which have proven adequate over the years; the other is to facilitate the international transport of containers by providing uniform international safety regulations, equally applicable to all modes of surface transport. In this way, proliferation of divergent national safety regulations can be avoided. Therefore, every container used for international transport needs a valid CSC plate. It should also have users who understand what the CSC plate lays out. The CSC plate is fastened to every shipping container at the time of manufacture and is typically riveted to the outside of the left door.

Container owners are responsible for maintaining containers in a safe condition and must ensure containers are inspected at intervals appropriate to operating conditions. There are two inspection programmes offered in the CSC: Periodic Examination Scheme (PES) and the Approved Continuous Examination Programme (ACEP). Under the PES, every container must be examined not more than five years after manufacture, and thereafter at intervals of less than thirty months. The date of the next inspection (NED) is required to be marked on the CSC plate. The ACEP programme allows owners to update containers as inspected every time an approved inspection has been completed. 

The CSC plate is only valid if the container is in good order. If it is damaged during service and no longer safe to use, the owner must ensure that the container is removed from service and repaired in accordance with guidelines established by IICL5 (Institute of International Container Lessors).

Given current market conditions and container availability shortages, we are seeing older containers pressed into service. It is critical that our assureds have in place a container pre-trip inspection programme to ensure that provided containers are suitable for their intended cargo and that the boxes have valid CSC plates.

Another issue that the current global container imbalance and rapidly rising freight rates have resulted in is the desire by assureds to fully load containers to maximise their carriage capacity. This presents several challenges from the loss control perspective. First is that the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code) must always be adhered to. The CTU Code is a joint publication of the International Maritime Organization (IMO), the International Labour Organization (ILO) and the United Nations Economic Commission for Europe (UNECE), which addresses the packing of containers through a global code of practice for the handling and packing of shipping containers for transportation by sea and land. The CTU Code addresses the loading and securing of cargo in containers. This includes proper blocking, bracing and lashing to help prevent damage to the cargo, the CTU as well as handling equipment. Secondly, it is critical that the assured understands the limits of their cargo packaging. While the maximum weight limit of the container can never be exceeded, it is also critical that the individuals stuffing the container understand the physical limits of the crates, cases or boxes that they are stowing. In working with our assureds, we advise them to develop templates and packing plans for standard load out of 40-foot as well as 20-foot TEUs as well as high cube stowage diagrams. This will help to maximise stowage while still ensuring that cargo is evenly distributed, safely stacked and properly secured within the container. Thirdly, as assureds look to maximise stowage it is critical that they monitor the stowage of dangerous goods. The CTU code lays out some key requirements:

Packing of dangerous goods:

• Do check that all packages are properly marked and labelled.

• Do pack dangerous goods according to applicable dangerous goods regulations.

• Do pack dangerous goods near the door of the CTU where possible.

• Do affix required placards, marks and signs on the exterior of the CTU.

• Do not pack incompatible goods which should be segregated.

• Do not pack damaged packages.

In summary, bad stowage is one of the biggest reasons for physical damage to containers. Overloading the container, uneven distribution of the weight, improper securing of the cargo or insufficient use of dunnage can cause the cargo to sway during the transport. This results from the lack of supervision of the shippers, lack of knowledge in cargo stowing, and trying to save costs without understanding the consequences. This can lead to cargo damage as well as transport damage at various stages of the intermodal delivery chain, including racking in container guides, collapse in the container stack or overturning during road or rail transport.

During these challenging times, it is critical to remember the fundamentals of safe cargo transport and stress the importance of communication and proper planning. This will help minimise disruptions to the global supply chain for all users.