TT Talk - Dangerous goods debate – count us in!

Apart from the recent devastating explosion in Beirut, there has been a spate of ro-ro/car carrier fires in recent months, leading to fresh calls for improvements, scrutiny and control in relation to dangerous goods (DG). Container ship fires are always in mind.

While 2020 - for all the difficulties faced around the world - has not experienced the container ship fires that marred 2019, there is every reason to continue investigating ways to improve certainty in the transport of DG shipments. There have in recent weeks been two helpful think pieces, the first a survey into the causes of cargo being non-declared or mis-declared and the second a white paper calling for a 'comprehensive, holistic and coordinated industry approach' to resolve the issues identified. TT Club applauds both these initiatives.

It is little surprise that this matter piques TT’s interest, since it is central to the ‘cargo integrity’/#Fit4Freight initiative, which has been profiled previously. The authors of the white paper, National Cargo Bureau (NCB) have drawn extensively on their own container inspections carried out over the years and reach conclusions about the risks presented by cargo packing deficiencies that resonate with the Club’s own findings and statements. For those interested in the statistics and detail, the white paper is a good (but sobering) read. Perhaps the most telling statement in its call to action is that the maritime supply chain ‘system [is] ripe for the type of disasters the industry has experienced over the last several years’.

“the maritime supply chain ‘system [is] ripe for the type of disasters the industry has experienced over the last several years’”

Broad range of problems

The NCB paper, in much the same way as TT has also sought to do, breaks down causation into distinct parts. While there is plenty of meat in this paper, it suits this article to use the Executive Summary categorisation as springboard.

‘Myriad of regulations’

The layering of the national and international regulatory environments applicable in transactions requiring the movement of goods cross-border is undoubtedly complex. It extends far beyond the immediate remit of DG, but just in that context many aspects raise more questions. It might be assumed that classification of a commodity could be a rigid and straight-forward process, but following through testing protocols, Special Provisions, Packing Groups and the like requires diligence and competence, let alone a fair understanding of science. Adding to that the currently un-synchronised coding for customs and tariff purposes and general trade pressures, it is those who see regulatory compliance as ‘an integral part of their safety culture’ who will consistently deliver above the simple baseline mandate.

‘Poor understanding of dangerous cargo’

Linked to the first issue is that all too often a ‘lay’ approach to the perception of DG is taken. This was neatly shown in the survey. When those involved in arranging the movement of goods apply a ‘domestic’ perception things go wrong – the use of hand sanitiser has mushroomed in recent months and most would not equate that with DG, in a similar way to the bleach kept under the kitchen sink. Perhaps even some farmers will now reconsider how to handle certain fertilisers.

‘Increasing complexity of supply chains’

Logistics has expanded to become ‘all things to all people’, providing an increasingly complex range of service offerings and outsourcing, driven too often by efficiencies and economies. It is reasonable to assert, as the white paper does, that safety controls and reviews have suffered as a consequence.

‘Carrier & port restrictions’

‘Once bitten twice shy’ over-simplifies the risk, but the range of restrictions or prohibitions needing to be taken into account can ‘amplify’ the risks of non-declaration and mis-declaration. There will almost certainly be logic in the application by the lines of ‘house’ policies, together with owner policies for chartered tonnage, and physical ship constraints (eg. available reefer points). Add to this restrictions applied from time to time at any of the ports of loading, transit, transhipment and discharge, and the scale of challenge is obvious. Managing all this and communicating effectively to the shipper community is burdensome at least. It was for that reason that TT supported Exis Technologies’ development of the Hazcheck Restrictions Portal, adding to their suite of compliance tools.

'Internal company protocols'

While recognising that liners have established protocols to manage all aspects of DG, the white paper calls for greater management support and resourcing. While efforts over decades to build common communication standards between companies have been reimagined in recent years, it is a simple truism that each company will have developed internal systems and cultures that may be well-served by benchmarking against industry good practice.

‘Threat of bad actors'

TT has long-advised the need for careful customer vetting (beyond simple cargo screening). Such due diligence applies in a host of ways. Non-declaration and mis-declaration have been aptly named as ‘fraud’ – straight-forward crime in many jurisdictions. Nevertheless, despite polite hearings, it is difficult to seize the attention of many enforcement agencies globally, specifically where they are not directly charged with the presenting issue of DG non-compliance. It should be recognised that DG criminals are almost certainly criminals threatening fiscal and security matters – time to work together.

Call to action

The NCB white paper presents twelve recommendations, which might very broadly be summarised as ‘corporate management actions’ and the ‘opportunity of digitalisation’. The latter was heralded in TT’s 50th anniversary project with McKinsey & Company, ‘Brave new world – container transport in 2043’ and rightly exercises many across the industry. A majority of the recommendations, however, challenge boardroom appetite for rigorous review, revision and resourcing. Most of all, there is a call for concerted action across the industry, which may only be catalysed by an express derogation from antitrust regulators and unequivocal mandate from all relevant national and international authorities.

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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