TT Talk - Discussion of cargo worthy containers

The use of standardised containers for much of global trade has become second nature; the range of cargo types utilising such units continues to expand. There is significant reliance placed by the various stakeholders on the overall integrity of the concept, some explicit and some implicit.

Starting from the perspective of the cargo that will be packed into or onto a freight container, the CTU Code sets out some clear expectations. The most essential element of these is in this paragraph in Chapter 8:

“The structural framework, the walls and roof of a CTU should be in good condition, and not significantly distorted, cracked or bent. The CTU operator is responsible for delivering a CTU that complies with international structural integrity requirements and international or national safety regulations. If the structural integrity is in doubt, advice should be sought from supervisory personnel or the CTU operator.”

This general statement is reiterated in Chapter 4 as the CTU operator’s responsibility to provide CTUs that “are fit for purpose”, compliant as expressed above and “clean, free of cargo residues, noxious materials, plants, plant products and visible pests”.

Complementary responsibilities are expressed for the shipper to define what is suitable for the “intended cargo for the intended transport”, and request a safe and clean unit. Equally, the packer needs to ensure that the “CTU is checked before packing and that the condition of the CTU is suitable for the cargo to be transported”. The packer’s responsibility is effectively explained further in relation to the expected external and internal condition of the unit, in respect of damage, condition for packing and cleanliness.

Satisfying cargo

Such high-level expectations are, inevitably, earthed in reality, particularly in relation to inspection and repair standards that are adopted – and become critical to the effectiveness of the overall system of unitized transport. Broadly, ownership of freight containers used in transport can be divided into operators, lessors and shippers (in this regard practically limited to one way usage). Unsurprisingly, the articulation of the standards affecting the condition of the unit, and thereby the impact on cargo being carried, differ according to the category of owner.

The Institute of International Container Lessors (IICL) sets the inspection and repair criteria to which all leased freight containers must adhere at the time of on- and off-hire. It may be considered the highest standard to which containers are repaired and maintained. Therefore, containers being returned to a leasing company at off hire must meet these guidelines. The current articulation of this standard is known as IICL-6 adopted in mid-2016.

When a container operator leases a container, it will know that the unit complies with the IICL criteria. On return, the container operator may be expected to deliver the unit in compliance with these criteria or be charged for necessary repairs.

As the ‘gold standard’, maintaining containers to the IICL standard throughout operational service may be onerous, particularly where the units are in-service for long periods of time, incurring repeated damages and undergoing continuous repair.

As a result, whilst on long term lease or indeed for owned units, operators will typically implement their own inspection criteria. Such criteria are frequently described throughout the industry as ‘Cargo Worthy’. While intended to remain compliant with international and national regulations, these criteria are designed to reduce operating costs; they will differ from operator to operator. As a generalisation, it might be expected that only necessary and economically justified repairs are carried out, not necessarily meeting the more exacting standards required by IICL.

Maintenance - minting one coin?

When adopting alternative maintenance criteria to IICL, certain considerations should be taken into account. It is important to understand the distinction between the inspection criteria and the repair criteria. The former set out the limits of damage beyond which a repair must be carried out, while the latter describe the methods and standards to be applied when a repair is carried out.

“The inspection criteria set out the limits of damage beyond which a repair must be carried out, while the repair criteria describe the methods and standards to be applied when a repair is carried out.”

This distinction is of practical importance, since operators may set their own inspection criteria, but all repairs should be carried out according to IICL guidelines, not least in order to avoid the possibility of being charged for the correction of improper repairs at a later stage. Incurring an additional bill at off-hire in relation to repairs whose standard fail to meet that set out by IICL, and therefore deemed improper, is never welcome.

Shipper owned or ‘one way’ containers introduce some uncertainties into the process. Thus, the work carried out by the Container Owners Association in this area assists greatly. Publications such as ‘COA Criteria for Cargo Worthy’ and ‘COA Guidelines for Cargo-Worthy Shipper Owned Containers’ are valuable.

Keeping safe margin

Regardless of the applied inspection criteria, it is critical to ensure that the safety controls set out in the International Convention for Safe Containers (CSC) are not breached. These are in place so that the safe handling of containers will not be compromised.

Apart from physical damage, damages caused by corrosion also need to be taken into consideration. Although cosmetic /surface corrosion is generally ignored by leasing companies, corrosion due to improper repair may still require making good. Obviously, corrosion that affects the structural integrity of the container must be repaired no matter the standard applied by the owner in order to maintain regulatory compliance.

In summary, all freight containers are expected to meet certain standards; while these may differ to some extent ‘in the eye of the beholder’ certain standards must be applied in order to deliver safety and avoid unnecessary problems. Any container found to have damages beyond that which is acceptable to CSC may be stopped as the safety of personnel, goods and surrounding equipment is paramount.

We gratefully acknowledge the assistance in the preparation of this article of Larry Monk of Intracon.

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

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