TT Talk - Ship fires often start ashore
Change to the way containerised cargo is entered into the supply chain is critical – as well as how it’s loaded on board ships. When cargo of any kind is incorrectly declared and packed, it can lead to catastrophic ship fires at sea. Poor packing not only leads to tragic loss of life, but is estimated to cost the industry more than USD6 billion each year.
- TT Club statistics indicate that as much as 66% of incidents related to cargo damage in the intermodal supply chain can be attributed in part to poor packing practices;
- CTU packing non-compliance exceeds 50% according to US based NCB;
- Industry estimates are that 10% of containerised cargo is declared DG and it is thought that a further 5% could be mis- or undeclared;
- A recent survey suggested that 33% of mis-declarations are wilful.
Cargoes commonly involved in incidents, whether or not declared properly, include known chemical cargoes, such as those used in paints, cosmetics, cleaning products, fertilisers, weedkillers and aerosols. However, many consumer goods, as well as components used in the manufacture of industrial products, domestic white goods and automobiles are also non-compliant. Further hazards are presented with cargoes such as BBQ charcoal, battery powered electronic devices, fireworks, hand sanitiser, wool, cotton, vegetable fibres, marble, granite and other building materials, fishmeal, seed cake and many more.
How and why things go wrong
- The regulatory framework starts from the premise that no Dangerous Goods should be transported. The regulations for maritime trade – IMDG Code – are derived from the UN Model Regulations, developed over many decades. There is no doubt that these are very complex and require diligence and expertise (often scientific) to follow. As with anything written, the text is often open to interpretation – even between experts. However, the Dangerous Goods regulations are simply the baseline; those shipping cargo need to consider all relevant risks and communicate them to the carrier, as a judgment in 2018 made clear.
- How goods are declared is determined by the shipper. It is evident that descriptions used may not always be accurate, which puts carriers at a significant disadvantage, particularly due to the volume of shipments that need verifying – a point that was accepted in the carrier’s defence in one major litigation.
- Classification of chemicals follows the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) for classifying and communicating hazards. Inevitably, new and variant chemicals are being developed continually, resulting in a need to have adequate controls over the scientific analysis. The facility to use a designation of ‘Not Otherwise Specified’ (NOS) may add a degree of obfuscation.
- Further, Special Provisions, that may have the effect of derogating from the full application of the regulations, present further challenge to carriers, who have no easy way to verify the necessary controls have been correctly applied.
- The different codings used for the various aspects of international transactions adds complexity. For example, the Harmonized System (HS) is used in a non-mandatory fashion for customs/fiscal purposes, whereas classification for transport follows the GHS. While inevitably ‘chemicals’ are a subset of HS, there is currently no complete read across between the two coding systems that could validate declarations (even if they were to be viewed together).
- In the shipping process, there are multiple tracks for data that are generally not correlated. In relation to Dangerous Goods, the data relating to the transport contract (eg. bill of lading) runs in one flow, potentially supported by a Safety Data Sheet (SDS), but the Dangerous Goods Declaration (DGD) is required for ship stowage considerations.
Hence, expertise and often experience are very much required – and from the evidence of incidents insufficiently available. This is particular an issue in the intermodal supply chain where so many individuals and entities may be involved in evaluating decisions and communicating accurately. And each actor throughout the movement of cargo is reliant on the steps taken beforehand.
Elements of shipping have always involved trust and reliance on others acting aright. The explosion of containerised trade over recent decades merely emphasises the need for the whole truth – after all, each consignment will be jostling like a packed commuter train together with thousands of others with unknown ills. In these days of rapid digitisation, the additional necessity of transparency should be coming within grasp. The current ‘state of the art’ is reviewed in the following paragraphs.
“How can we prevent or discourage the shipment of undeclared goods?”
Simply, ‘know your customer’. It is critical to gather whatever data are available about the customer, including things like government registrations, physical or at least online map checks (that can verify the nature of the shipper) etc. This is made more difficult when many relationships in the containerised supply chain are indirect.
“Can screening systems detect potential declaration errors”
There have been significant advances in the tools available to liner operators to detect fraudulent and mistaken declarations. Recent initiatives appear to utilise machine learning techniques and draw in multiple layers of customer data in order to validate shipments.
“What role does DG compliance software play?”
Where used, this toolset inevitably assists actors in following the rules with regard to segregation, documentation and suchlike. However, their value still relies on the whole truth in relation to the cargo being processed.
“Could scanning of containers prevent undeclared cargo being loaded on board ship?”
For nearly two decades various parties, particularly from a security perspective, have aspired to implement such controls. These options are emerging, but probably would mainly only support more intrusive interventions, such as inspections.
“Surely container inspections can identify problems in cargo packing or declaration?”
Clearly, inspections – both government and commercial – have a role in supporting good practice. The speed and controlled nature (e.g. customs) prevent such interventions regularly. Where implemented systematically, inspection programmes have improved practices.
“Will the advent of smart containers be the solution?”
Such IoT (Internet of Things) devices clearly are capable of monitoring many aspects of cargo integrity during the transit and potentially providing alerts. The current would not prevent mis- or undeclared cargo being packed and dispatched.
“What steps can governments take to support industry initiatives?”
Enforcement of national and international regulations is critically important. There are numerous structural and prioritisation reasons why this does not happen consistently. Stated baldly, wilful mis-declaration is fraud; this should be criminal in most jurisdictions.
TT Club cares
TT has highlighted these issues repeatedly – and will continue until the incidents materially improve. The Club has participated in debates across the industry and at intergovernmental level, as well as putting together guidance material, often collaboratively, such as ‘CTU Code – a quick guide’ and ‘Book it Right and Pack it Tight’. Join with us to change the safety culture!
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.
Risk Management Director, TT Club
Risk Management Director
You may also be interested in:
TT Club has been at the heart of a long-term campaign to increase awareness of good cargo packing practices, both as part of responding to incidents and through speaking at industry events. These efforts are now galvanised in the 'Cargo Integrity Group'.
The report, which reflects whole year data from 2020 compiled by leading international transport and logistics insurer, TT Club, and global provider of supply chain intelligence, BSI, highlights significant new trends in risks both regionally and globally.
TT Talk - Supporting the future
TT explores various ESG initiatives that are supporting the future of the transport and logistics industry
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.