Incidents involving Reefer Containers

Show all / Hide all

What do you know about the “exploding reefer containers”?

A number of reefer containers have exploded at different locations around the world. At present, the precise cause of the explosions remains unclear but the evidence suggests that containers which were maintained or repaired in Vietnam in March and April 2011 may be affected. The Club is investigating this issue and has appointed experts to consider the available evidence. 

On 18 October 2011 the World Shipping Council alerted its members, who comprise a large majority of the liner operators worldwide, to this problem. As a result, these shipping companies have been engaged in identifying potentially affected reefer units and taking steps to remove them from service. Some of these units will have been at sea, others on land, either active or inactive.

Analysis by refrigeration experts has concluded that the problems are due to counterfeit refrigerant, believed to contain chloromethane which reacts to form a pyrophoric liquid (ie. burns on contact with air)

What steps can be taken to remove counterfeit refrigerant gas from circulation?

The investigations at this stage indicate that there is a risk that counterfeit refrigerant has been supplied to depots. It appears counterfeit gas purporting to be manufactured by DuPont is in circulation. There is no reason to believe that other reputable manufacturers have not similarly been subject to counterfeiting activities.

In relation to DuPont gas bottles it is recommended that any held at repair depots with the following characteristics be removed and taken to a secure area pending definitive testing. The identifying marks of counterfeit - and hence dangerous - gas tanks/bottles are:

• the 'DuPont' logo is likely to have been printed incorrectly as 'Dupont', missing the capital 'P'
• the valve on the top of the bottle is likely to be out of alignment with the pressure relief dimple
• the carrying handles on the bottle are shaped in a rounded fashion, whereas certified DuPont tanks have a squared off construction

If you find these or other questionable DuPont gas tanks/bottles in your possession, you should immediately stop all refrigeration repairs, and remove and secure all the bottles. You should additionally identify all container units that might have been re-gassed using gas from these tanks/bottles and alert the container operator/your principal.

Experts have indicated methods by which all new canisters of R134a gas can be checked prior to use in connection with reefer container repairs, of which the Halide Flame Test is thought to be the simplest. Details of this are provided in the CRT, Maersk Line and Carrier advices; with appropriate site risk assessment, this is recommended as good practice at this point to ensure that no further contaminated refrigerant is used in refrigeration repairs.

Is it possible definitively to identify ‘at risk’ containers?

As mentioned, the concentration at this point has been on units that underwent repairs including work on or regassing of the refrigerant system in Vietnam during 2011. It is clear that not all these units have in fact been contaminated and the actions taken by lines are thus in large measure precautionary.

A number of entities have been trialling methodologies to extract gas or oil samples from ‘at risk’ containers in a safe fashion. This work is on-going but is hopeful. Once extracted, the samples can be tested, potentially both on-site and also in laboratories. At this point, samples have been successfully extracted, but only from units that have thereafter proven not to be contaminated.

This is important work which the Club supports. Once methodologies have been proven to work safely, they will be publicised. It is likely that good practice in the industry will move towards including such testing in Pre-Trip Inspection routines.

 

What practical steps should be taken in relation to reefer containers?

Following the WSC alert to its liner operator members, we understand that lines have taken steps to identify containers that are potentially 'at risk'. These are reefer containers that underwent repairs including work on or regassing of the refrigerant system in Vietnam during 2011. We understand that lines have been able to identify the location and status of such containers, and have taken steps to ensure that all such units are removed from service and quarantined.

As an inevitable consequence, 'at risk' units have been handed into port, terminal and depot custody. Based on the current state of knowledge, it is recommended that such units should be:

• Switched off.
  None of the incidents known to the TT Club have involved inactive reefer machinery. Analysis at this stage suggests that there is minimal risk of explosion when the machinery is off.
  
  Where the container is laden with perishable cargo, steps should be taken to mitigate any potential damage to the cargo by transferring it to another reefer container or similar cold storage. Of course, you should seek the instructions of your principal and keep them informed of the actions you are taking
• Isolated.
  'At risk' reefer containers should be placed in separate storage, away from personnel and property, particularly any goods or facilities that may sensitive, such as dangerous goods.
  
  Any risks can be further minimised, where there are multiple 'at risk' units being stored, by positioning the containers end to end with the reefer machinery effectively hidden and staggered so that the compressors do not line up.
• Left alone.
  Do not under any circumstances attempt to effect a repair to the reefer machinery, specifically do not open the system or draw off any gas.
  
  As a terminal or depot, leave the units alone until you are given further instructions from your principal

We understand that this three-point advice is consistent with information that has been disseminated by the lines. On the basis of the current state of knowledge, 'at risk' reefer containers handled in this fashion will minimise the risk of any further incidents.

What are the potential losses?

Apart from the loss of property, cargo - and life - which can result from an explosion, there are obvious ramifications. Containers at risk may be taken out of service. If the units are laden, the cargoes may be discharged and cross-loaded, or left loaded resulting in deterioration. Ships may be diverted to ports where special arrangements have to be made to offload and store suspect containers. Inevitably, increased costs and potentially claims will be incurred as a result of actions that are taken to mitigate the potential for further injury, or damage to property or cargo. The extent to which such costs or claims will be recoverable under applicable contracts or insurance policies will need to be assessed in each individual situation.

What action should be taken by affected Members?

Clearly, operational decisions will be for the Member, and we will always respect your professional judgement. However, in relation to its insurance policy, every insured is at all times required to act reasonably and as a prudent uninsured. It may be appropriate for you to obtain independent legal advice, as you would do in the normal course of business. Irrespective of whether this is done, if you may be directly affected by this chain of events, steps should be taken immediately to report the matter as a potential claim, to your broker or usual Club claims contact. This should be done, if practicable, before any action is taken, and is a term of your cover. If there are decisions to be taken, we can discuss the matter with you and together develop an effective strategy.

The Club has additionally sent a Circular to all Members with specific questions to assist in the compilation of appropriate loss prevention advice. In relation to that, please email responses to riskmanagement@ttclub.com. If you have not yet responded, please do so in order that the Club and its experts have available the fullest picture possible. The fact that the initial date by which a response was requested has passed does not invalidate a full response from all Members.

Will you advise on Letters of Indemnity and other documentation required by Ports and others?

The decision to sign a Letter of Indemnity or any other contractual documentation is an operational matter which you must decide taking into account all the relevant considerations. For this reason, we recommend that, acting as a prudent uninsured, you obtain independent legal advice on whether or not to sign such documentation.

Your insurance is subject to the terms and conditions of your policy and even if you agree a Letter of Indemnity or other contractual documentation, your cover will still be subject to those terms and conditions. In other words, the signing of a Letter of Indemnity or other contractual documentation does not in any way extend your cover. Your rights and obligations remain the same as set out in your insurance policy.

Will the Club pay for the costs of obtaining independent legal advice to review such documentation?

The Club will not generally pay for your legal costs unless such costs are recoverable under the terms of your insurance policy. Subject to the specific terms of your policy, legal costs would only be potentially recoverable in two instances:

• if such costs were incurred in minimising a claim that would otherwise be recoverable under the policy;

or

• if such costs were incurred in investigating an accident which may give rise to a claim under your cover and protecting your interests in relation to it.

A large number of Club Members, many with different interests, will be affected. What steps are you taking to protect individual Members?

The Club has a long tradition of constructing and maintaining “Chinese walls”. No executive of the Club’s staff will deal with two or more cases where there is a possible conflict of interest. No information provided by any Member, or by its instructed lawyer or expert, will be shared with another Member or a Club executive not dealing with the case, without the first Member’s specific written permission.

For the benefit of the Club and the membership as a whole, coordination will be provided by a small senior team in London. This team will not consider individual Member claims, but will analyse available information, with input from lawyers and experts. This information, including survey reports and legal opinions, may be made available to the entire membership and to Club staff, but only to the extent that it does not compromise the prohibition of revealing information supplied by individual Members without permission.  

Will you cover losses arising?

Liability for bodily injury and damage to cargo and third party property are fundamental to Club cover for all Members. This is subject to the normal terms of the cover, in particular your obligation to mitigate its loss and to cooperate with the Managers in claims handling, and the exclusion of reckless and intentional conduct.

Club cover also generally excludes risks arising from a Member’s interest in a ship and from the management, navigation or operation of the ship. This is designed to dovetail with P&I cover and, where a Member has both TT and P&I cover, it will be necessary to agree on allocation of the risk (which in some cases may be shared between the Clubs). Individual cover decisions must of course depend on the facts of each individual case.

What about ancillary costs?

Ancillary costs are likely to be varied, including for example port charges and costs of transhipping cargoes. In addition, there may be legal costs, such as in advising on letters of indemnity, and expert costs. In principle, and as stated above, the Club will pay for such costs if these fall within the terms of the cover. It is however essential that the Club Managers agree all such recoverable costs in advance.  Again, decisions on payment of costs depend in every case on individual circumstances.