TT Talk - Protecting your supply chain - refrigerants

TT Talk - Protecting your supply chain - refrigerants

The Container Owners Association (COA) has now launched its ‘COA Reefer Service Facility Directory’, a database of reefer service companies. Shipping lines would be prudent to ensure that suppliers are properly listed and use those who confirm that they are carrying out gas bottle testing.

Although the TT Club only recently addressed the issue of counterfeit refrigerant (link: TT Talk 177), it is worth identifying that the COA has launched its database of reefer service companies.

Since the explosions and fires incurred during 2011, a number of shipping lines and container lessors, and a fair number of depots, have implemented enhanced testing regimes, particularly relating to refrigerant gas supplies. The TT Club previously reported that testing of R134a in both reefer machinery and gas bottle supplies has revealed various contaminants. While some of these are not compatible with compressor lubricants or simply inefficient as refrigerants, the major concern has been towards counterfeit gas that has the propensity to be dangerous.

As ever with counterfeiting situations, the pressure is the economic opportunity. The manufacturer of fake refrigerant will inevitably use cheap, easily available stock. The offer price to anyone purchasing gas will be a small fraction of the norm. Since the packaging may casually appear to reflect that of a main brand, any service business should immediately be on notice when there is a significant price differential. As highlighted in the AHRI white paper, knowing your supplier is key.

However, this should be reinforced by a thorough and carefully documented gas bottle test programme. Service centres need to be vigilant to ensure that all new and reclaimed gas is not contaminated. Since tests on new machinery have shown that refrigerant servicing is the only way a unit can become contaminated, the focus has to be on securing that supply.

Manufacturers of ‘virgin’ refrigerant have taken strides in recent years to provide evidence that the gas bottle is genuine – in addition to litigating successfully in a number of jurisdictions against fraudulent suppliers. However, the Flame Halide Test remains the key method by which gas bottles should be tested. It should be pointed out that any reclaimed gas may be contaminated and therefore should be tested.

The launch of the COA database is significant since it seeks to establish service companies that carry out transparent and verifiable gas bottle testing. The TT Club strongly recommends that reefer operators and owners work with vendors to ensure that the information held on the database is complete and accurate – and then only use vendors with a recognised test programme.

The industry has the opportunity now to work together in order to prevent the use of counterfeit and contaminated refrigerant. This database is a valuable tool to achieve this. Key stakeholders, including the International Maritime Organization (IMO), are keeping a watchful eye on developments. At this point, while agreeing to make amendments to the IMDG Code, the regulatory hand has been held back. Should current self-regulatory efforts be ineffective, there will be renewed pressure to implement an international standard for reefer gas handling, followed by strict verification processes. The gauntlet has been thrown down.

We hope you have found this article interesting. If you would like further information or have any comments please contact me:

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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