Refrigerated cargo issues in terminals

  • Date: 20/04/2015
  • Author: Laurence Jones, Director Global Risk

Reducing refrigerated cargo spoilage at container terminals could help reduce the number of people dying from starvation and also perhaps mitigate adverse climate change.

These are bold claims, perhaps but given some validity considering the amount of edible commodities that are shipped through the world’s ports. The FAO (Food and Agriculture Organisation of the United Nations) in its 2013 report Food Wastage Footprint, estimates that each year approximately one third of all food produced for human consumption in the world is lost or wasted. Such a volume of lost or wasted food would apparently occupy around 1.4 billion hectares of land!

In addition, most people now acknowledge that increases in greenhouse gases and the resultant changes in climate are exacerbated by human activities. The practice of deforestation to increase available agricultural land and even the environmental impact of CO2 and other noxious gas emissions resulting from the transport of goods to markets, are part of the adverse conditions resulting from human activities.

According to the United Nations, about 21,000 people die every day of hunger or hunger-related causes. This is one person every four seconds. Sadly, it is often children who are most vulnerable. Imagine, then, the environmental and humanitarian benefits we could achieve if we were able to eliminate or substantially reduce the one third food wastage.

Of course, the port industry alone can’t do this, but we can play our part. The TT Club in its position as a provider of insurance and related risk management services to the port and terminal sector globally is in an informed position to provide observations on this effort. Data from the TT Club claims analysis indicate an persistent and growing incidence of claims for damage and loss of refrigerated cargo, which is to a great extent made up of perishable foodstuff. Cargo damage claims in relation to refrigerated goods are within the top ten claim cost areas across the TT Club’s membership.

The two main causes of deterioration of refrigerated cargo at terminals are interruption to the power supply, usually simply not plugged in, and incorrect setting of the required temperature.

The following is a list of suggested actions designed to reduce the incidence of spoilage of refrigerated cargo in containers at terminals.

• Double check all data related to the refrigerated (reefer) container, including the required temperature settings in the documentation and the TOS (Terminal Operating System).
• Check whether temperature figures are in Celsius or Fahrenheit.
• Check whether the temperature figures are + or -.
• Use EDI (Electronic Data Interchange) to communicate documentation and cargo instructions – this reduces the risk of data entry errors. If it transpires that the documented temperature setting is wrong, use of EDI means it will be the error of the shipper or shipping line, and not the terminal’s liability.
• If your terminal is involved in packing containers, ensure that your staff have the necessary training to pack it correctly. Besides securing cargo adequately, ensure suitable placement of the cargo to provide adequate circulation of air and the correct humidity control via fresh air ventilation settings.
• When the reefer arrives at the terminal ensure it is plugged in as quickly as possible. For imports it will have already been off power for some time before discharging from the ship. The same is true for an export load, as the unit may have been off power during its transport to the terminal.
• Also on arrival, check that the temperature setting is at the required level and ensure the refrigeration system is working correctly. Also check the temperature recording chart is functional.
• At terminals with manual reefer monitoring processes, make certain all reefers are checked for correct temperature, temperature setting and correct operation at least every 12 hours. Where the ambient temperature is very high or very low this frequency may need to be increased to every 4 hours.
• Refrigerated cargo that must be kept within a small tolerance of temperature range, depending on the ambient conditions, may also need to be monitored on a more frequent basis.
• Continuous remote monitoring of all reefer containers is recommended and there are various systems available to carry this out.
• During annual peak seasons for refrigerated cargo shipments, ensure plans are in place to provide sufficient power to supply the maximum number of reefers that may be handled. Often portable generators are required at short notice and a supply of these should be assured.

By following these recommendations, terminals can reduce refrigerated cargo spoilage, avoid customer angst and minimise insurance claims. More importantly, they can limit the damage to the environment and save people from starvation. Let’s do our bit to help.

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

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