Risks in container shipping - 16/10/2014

Risks in container shipping


CONTAINER shipping is, some half century after inception, remarkably resilient and successful in operational terms — if not necessarily always in profitability.

Mankind, particularly in the developed world, takes it for granted that it is possible to buy exotic fresh produce that has travelled weeks from another continent, or to pick up a bargain in the latest electronic gadgetry that is most likely to have been manufactured in Asia.

The ability to move hundreds of millions of these humble containers each year with relatively low failure rate is testament not only to the original pioneers in the unit load shipping industry, but also to those who have incrementally improved processes, ensuring that increasingly varied cargo can be transported safely and securely.

Formidable foundations were set in the early days, such as with the International Convention for Safe Containers, which has, with only modest amendment, provided guidance for the structural control of freight containers.

Such foundations have been supplemented over the decades with a plethora of national and international regulations concerning how cargo should be packed in containers, then loaded and secured on ships — work that necessarily continues.

Container shipping has had its share of maritime incidents over the last decade that demonstrate the challenges the industry faces as it seeks to match the appetite for goods to be transported against the need for cost efficiencies, most readily epitomised by the increase in individual ship capacity.

When Rena ran aground in October 2011 on the Astrolabe Reef off New Zealand, the industry witnessed the complexity of the ensuing salvage operations carried out in adverse sea conditions and in a sensitive marine environment.

The logistical challenges following any incident could be typified by Emma Maersk, which suffered a flooded engine room in the Suez Canal in February 2013.

Most ports have dwell time for containers of two to four days and do not anticipate a mass influx to be handled and stored pending onward movement.

However, in this instance 13,000 entirely undamaged containers were discharged into the unexpectant terminal.


Although tonnage is vulnerable, the MSC Flaminia incident in July 2012 perhaps highlights what can be termed adjacency.

Cargo on board the ship caught fire, claiming three lives and forcing the ship to be abandoned in the Atlantic, about 1,000 miles from the English coast.

Although the fire was brought under control, it took almost two months before the ship was brought safely to a berth — itself indicating the longstanding international dilemma over ports of refuge.

It took a further six months for all the cargo to be discharged in an environmentally sensitive fashion.

The precise cause of the fire is now subject to litigation, although the German Maritime Administration issued a report on its investigations in early 2014.

Whatever is ultimately established, there is a simple truism that a single consignment, package or drum, packed in a container and loaded on board a ship has the potential to wreak havoc.

This is the adjacency risk that has continued to fuel the industry, with initiatives such as the liner operators’ Cargo Incident Notification System as well as the development of the CTU Code (IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units).

The latter is nearing final UN approval, following which the challenge will be to ensure that everyone involved in packing cargo and consigning it to the supply chain understands and satisfies their responsibilities.

The simplicity of the unit load remains one of its most intractable risks — what is in the CTU and how it is packed is essentially invisible to those charged with handling and moving the ubiquitous box.

Peregrine Storrs-Fox is the TT Club’s risk-management director.


In http://www.lloydslist.com/ 16/10/2014