TT Talk - Container examination choices

TT Talk - Container examination choices

Containers play a major role in international trade; rigorous equipment maintenance processes are critical. Consider which examination process best mitigates the risks.

According to the UNCTAD Review of Maritime Transport 1.63 billion tonnes of cargo was containerised in 2014, representing 16.56% of all maritime trade.  This cargo was carried in 171 million TEUs (9.5 tonnes per TEU) estimated to be growing by 5.3% over 2014 while the number of containers only increased by 3.8%.

In 1972, the IMO published the International Convention for Safe Containers (CSC) which required owners to maintain their containers in a safe condition and to examine every container at certain intervals. Initially, examinations were required at least every 24 months, but, this period between examinations has subsequently increased to 30 months, alongside the concept of a continuous examination programme.  Imagine the time required to examine the world wide fleet if the regulations had not changed – even with the extended interval, 29,350 containers would be examined every day.

The CSC places the responsibility for maintaining the container in a safe condition on the owner (or bailee) and to do so the owner shall examine the container or have it examined in accordance with the procedure either prescribed or approved by the Contracting Party concerned, at intervals appropriate to operating conditions.

In the UK, the Freight Container (Safety Convention) Regulations 1984 require that containers are properly maintained and states that the examination ‘shall be in accordance with an examination scheme or programme approved by the Health and Safety Executive’.  There is no differentiation between a scheme (Periodic Examination Scheme) or a programme (Continuous Examination Programme); both require approval by the Health and Safety Executive (HSE). Other Contracting Parties may follow this approach or may only require a Continuous Examination Programme to be approved (hence, Approved Continuous Examination Programme or ACEP).

The original requirement of the CSC was an examination of containers at regular and set intervals, similar to regulations in many jurisdictions covering motor vehicles requiring regular (e.g. every 12 months) testing to ensure safety.

Examination choices
The maintenance schemes and programmes described in the CSC are broadly similar. New containers do not require any formal examination for the first five years, examinations need to be carried out at least every 30 months and the container must be maintained in a safe condition in accordance with the provisions of annex I to the CSC.  Many of the larger container owners will have developed a maintenance system based on a continuous examination process that has been examined by their Administration and received approval for its use (i.e. ACEP).  In such a scheme the owner must at least describe:

  • details of the industry-accepted pass / fail criteria used for container examination;
  • the events that trigger a container examination;
  • the procedures for repairing and re-examining failed containers.

In an ACEP the definition of trigger events is critical.  In many cases the trigger will be associated with a gate movement, generally the gate-in where depot inspectors have the opportunity to inspect the container quickly.  In CSC parlance, this is a ‘routine operating inspection’, used to detect any damage or deterioration that might necessitate corrective action; it is not, however, a ‘thorough examination’ as required by ACEP.  The latter requires a detailed examination of the structurally significant components of the container including all corner and intermediate fittings.  A continuous examination programme should also describe the procedures for recording container examination results and methods for tracking examinations for every container they operate.

A Periodic Examination Scheme is arguably far simpler to manage, but requires a greater input from the owner and examiner.  Firstly, the container owner needs to track each container to identify when it is due for examination and its location in order to instruct a depot to carry out a thorough examination.  Secondly, at the conclusion of the examination, the unit should be marked with the Next Examination Date (NED), no more than 30 months in the future.  Unlike the ACEP there are no guidelines for the processes and procedures that should be included in a Periodic Examination Scheme. However, it is necessary for records to be retained and the owner notified to confirm that examinations have been completed, in order to update their system.  Alternatively, the owner may just instruct their depots to check all containers as they arrive and examine those containers where the NED is imminent (say, within six months) or in the past.  Whether there is a written instruction for the contents of the periodic examination, the general CSC rules apply – the container should be maintained in a safe condition, examined at intervals no greater than 30 months and marked to indicate that it has been inspected.

Control the risks
With a global fleet exceeding 24 million and undoubted cost constraints, there are opportunities for corners to be cut. Gate-in routine inspections may be reported as thorough examinations; on-hire / gate-out examinations may be omitted as the container is moved from stack to trailer and driven directly out of the depot; periodic examinations may be reduced to a quick check and a new NED marked on the container.  These all contribute to a deterioration of safety and increase the risk to persons and infrastructure throughout the supply chain.  Incidents have occurred where attention to detail during inspections and thorough examinations have resulted in failures that have placed persons at risk. Apart from disruption and potential liability exposure, recognise the reputational risk for the name emblazoned on the container sides.

We gratefully acknowledge the assistance in the preparation of this article of Bill Brassington of ETS Consulting. 

We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.
We look forward to hearing from you.

Peregrine Storrs-Fox
Risk Management Director, TT Club

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.

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