Most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures.
A Lloyd's agent was instructed to carry out pre-shipment surveys on twelve consignments of frozen swordfish chunks. These were completed over a period of approximately four months. The buyer required that the agent warranted that laboratory tests were carried out prior to the shipment and that they had established that the mercury content was less than the permitted maximum in swordfish selected on a random representative basis.
The agent asked the State Laboratory to carry out the surveys. The correct number of cartons were opened, samples taken and the analysis report showed the mercury content was within the specifications. Unfortunately, the agent omitted to tell the laboratory that all the samples had to be analysed separately. The laboratory, in accordance with their normal practice, mixed the samples together and analysed only one or two composite samples. The wording of the agent's survey report also suggested that 5% of the cartons had been both sampled and tested.
On arrival in the United States the consignments were subjected to additional analysis by the US Authorities and the majority were found to contain mercury in excess of the permitted maximum. The cargo was rejected as being unfit for human consumption and the US importer suffered considerable financial loss, which was only partially covered by his cargo insurers.
Subsequently, the agent received a claim for US$1,000,000 from the importer and the club instructed lawyers to act for the agent and the club. Legal proceedings were commenced against the agent in the Californian Courts and the Club's San Francisco Correspondent was instructed to assist the Californian lawyers in the preparation of the defence.
Detailed investigations revealed certain information that was useful to the defence but the documentary evidence against the agent was difficult to dispute. An attempt to obtain a summary judgement to dismiss the claim against the Lloyd's agent was dismissed in California and the Club decided that a negotiated settlement was a better option. The negotiations were lengthy and protracted, but an agreement was finally reached where the claim was settled in the sum of US$412,500. Substantial costs were inevitably incurred amounting to US$247,727.
This claim is a reminder that the financial consequences of simple errors are impossible to foresee and highlights the need to carry the highest affordable level of insurance.
ITIC (International Transport Intermediaries Club) Claims Review reports that there have been an increasing number of claims (varying between US$15,000 and $150,000 in value) resulting from reefer containers either being left unplugged at the load or discharge port or being carried at the incorrect temperature.
Our detail pages below examine some typical cases of damage to reefer cargoes & countermeasures against future claims
A Lloyd's agent was instructed to carry out pre-shipment surveys on twelve consignments of frozen swordfish chunks. These were completed over a period of approximately four months. The buyer required that the agent warranted that laboratory tests were carried out prior to the shipment and that they had established that the mercury content was less than the permitted maximum in swordfish selected on a random representative basis.
The agent asked the State Laboratory to carry out the surveys. The correct number of cartons were opened, samples taken and the analysis report showed the mercury content was within the specifications. Unfortunately, the agent omitted to tell the laboratory that all the samples had to be analysed separately. The laboratory, in accordance with their normal practice, mixed the samples together and analysed only one or two composite samples. The wording of the agent's survey report also suggested that 5% of the cartons had been both sampled and tested.
On arrival in the United States the consignments were subjected to additional analysis by the US Authorities and the majority were found to contain mercury in excess of the permitted maximum. The cargo was rejected as being unfit for human consumption and the US importer suffered considerable financial loss, which was only partially covered by his cargo insurers.
Subsequently, the agent received a claim for US$1,000,000 from the importer and the club instructed lawyers to act for the agent and the club. Legal proceedings were commenced against the agent in the Californian Courts and the Club's San Francisco Correspondent was instructed to assist the Californian lawyers in the preparation of the defence.
Detailed investigations revealed certain information that was useful to the defence but the documentary evidence against the agent was difficult to dispute. An attempt to obtain a summary judgement to dismiss the claim against the Lloyd's agent was dismissed in California and the Club decided that a negotiated settlement was a better option. The negotiations were lengthy and protracted, but an agreement was finally reached where the claim was settled in the sum of US$412,500. Substantial costs were inevitably incurred amounting to US$247,727.
This claim is a reminder that the financial consequences of simple errors are impossible to foresee and highlights the need to carry the highest affordable level of insurance.
ITIC (International Transport Intermediaries Club) Claims Review reports that there have been an increasing number of claims (varying between US$15,000 and $150,000 in value) resulting from reefer containers either being left unplugged at the load or discharge port or being carried at the incorrect temperature.
Our detail pages below examine some typical cases of damage to reefer cargoes & countermeasures against future claims