A reefer ship is a type of ship typically used to transport perishable commodities which require temperature-controlled transportation, mostly fruits, meat, fish, vegetables, dairy products and other foodstuffs. There are cases where reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Below are examples of reefer cargo losses due ships failure to maintain necessary conditions .
Damage to Cases and Pallets of Oranges Shipped from Morocco to the US
A shipment of oranges was packed in cases then put onto pallets, each containing 63 cases, onboard the Reefer Express ship Ocean Rex. The pallets consisted of nine cases to a tier, stacked seven tiers high and secured by reinforced angles and nylon straps. The charter held the carrier responsible for the cargo until it was landed in the warehouse at the destination port.
The cargo was delivered to the vessel in apparently good order and condition, clean bills of lading were then issued. Although the Master filed a note of protest with respect to the delays in loading and the effect of these delays on the product's pulp temperature, he did not register a complaint with respect to the packaging, the handling by longshoremen or the onboard stowage. On discharge at New Bedford, USA significant physical damage was observed to a number of pallets, although the owner and charterer disagreed as to the extent and cause of them.
After discharge, the cargo was moved from the pier by forklift and flatbed truck to an adjacent cold storage warehouse, where it was stored in accordance with government regulations for fourteen days. The cargo receiver `Bacchus' claimed for $260,617, representing the depreciated value of the product, together with the survey fees and interest accrued, arguing that Reefer Express and its surveyor were unaware of the customary packaging of Moroccan oranges. It claimed that Reefer Express, having not raised a complaint about the packaging, loading or stowage, was precluded from asserting that the cargo was damaged during loading in Morocco or by heavy weather during the sea passage.
Reefer Express maintained that there were a number of possible causes of damage, for example pre-shipment condition and/or insufficient packing, heavy weather and negligent handling during the discharge to the wharf and the subsequent delivery to the warehouse.
The panel majority found that Reefer Express was liable for the damage to the cargo, awarding Bacchus US$218,246 in damages.
: Hyundai Fortune: Failure to Maintain the Required Temperature
The claimants were the owners of a cargo of Hami-melons that were loaded into a reefer container in Shenzhen, China. The reefer container was then loaded onboard the vessel Hyundai Fortune in Hong Kong for carriage to Singapore.
The melons should have been carried at a temperature of 3°C at all times. However, evidence was presented that the reefer container did not maintain the required temperature. According to the evidence, the temperature rose to 25°C during transit. As a result, the melons arrived at Singapore in a badly damaged state.
The claimants wrote to the ship owners demanding compensation, but the ship owners ignored their demands for almost a year. The claimants then commenced an action against the owners of the Hyundai Fortune in Singapore.
The ship owners applied to court to stay the proceedings in Singapore, by relying on the exclusive jurisdiction clause in the bill of lading, that referred all claims arising from or in connection with or relating to the bill of lading to the Seoul District Court in Korea. The High Court refused to stay the proceedings in Singapore after taking the following factors into consideration:
There was no defence on the merits of the claim
no trial would be held in Korea as the action had become time barred there
the connecting factors of the case were all related to Singapore
the overall justice of the case was with the claimants.
The ship owners appealed against the decision refusing a stay of proceedings in Singapore. Judgment: The ship owners' appeal was dismissed.
Deterioration of Banana Cargo due to Improper Ventilation
In Transatlantic Marine Claims Agency, Inc. v. S.S. Zyrardow, the carrier was found liable for the deterioration of a cargo of bananas after it had failed to follow the charterer's instructions stating that the storage holds should be ventilated sixty hours after the closure of the compartments to remove high levels of carbon dioxide and ethylene from the compartments, as this accelerates the ripening process.
Frozen Shrimp Damaged due to Failure of the Ship's Equipment
In AR Lantz Co, Inc. v. United Trans- Caribbean, the Court found that the vessel was not seaworthy to carry frozen shrimp as it was missing the necessary spare parts to maintain the refrigeration unit and one of the generators was inoperative, making the `vessel's refrigeration system unsuitable.' In making this decision, the Court followed the finding in Atlantic Banana Co. v. M/V Calanca, which found that improper maintenance and inoperative refrigeration equipment made the vessel unseaworthy.
Damage to Fruit Cargo due to Fire Damage to the Ship's Reefer Equipment
In Banana Services Inc v M/S Tasman Star, a fruit cargo was damaged when a fire onboard disabled the ship's refrigeration control panel, making it impossible to refrigerate the fruit properly. The Court found that the real cause of the loss was the fire which, although it did not ignite the cargo, nevertheless cleared the carrier from liability under the fire exception of section 4(2)(b) of U.S. COGSA(76) and the U.S. Fire Statute.(77).
Thaw Damage to Cargo of Frozen Orange Juice Concentrate
In Ins. Co. of N. America v. M/V Frio, involving thaw damage to a cargo of frozen orange juice concentrate, the carrier failed to establish either the defence of insufficient packaging or the exception of an inherent defect of the goods and was held liable as it had not rebutted the presumption resulting from the plaintiff's proof that the concentrate had been loaded in good condition and was discharged damaged.
Damage to Soybean Cargo due to a Lack of Ventilation
In Granite State Ins. Co. v. M/V La Pampa, the claimant proved that the carrier had failed to take all reasonable and necessary measures to prevent sweat damage to a cargo of soybeans and to ventilate the hold. The carrier was held liable for the entire loss under the Vallescura Rule, despite some evidence that the soybeans had a higher than normal moisture content on loading, because the carrier had "...not met the burden of showing what part, if any, of the damage is attributable to such a condition."
Damage to Cargo of Frozen Raspberries due to Improper Temperature Maintenance
The Court held a carrier responsible for thaw damage to a cargo of frozen raspberries as they were not kept at the contracted temperature throughout the voyage. In this case, the Court made it very clear that substantial proof must be presented in order to invoke the exception of act of the shipper under article 27(g) of Law No. 66-420 of June 18, 1966. In this case, a graph showing the internal temperature of the container throughout the voyage was not sufficient proof that the raspberries were not properly frozen at loading.
Improper Storage of Cheese in Unrefrigerated Warehouse
In M. Golodetz Export Co. v. Lake Anja and Italusa Corp. v. M/V Thalassini Kyra involving the alleged improper storage of cheese in an unrefrigerated warehouse after discharge, the Court noted that "the melting properties of a particular cheese is not a matter of common knowledge, that may reasonably be charged to the carrier." The carrier was not held responsible.
Damage to an Apple Cargo due to Non-compliance with the Shipper's Instructions
In See White & Son Ltd. v. White Star Line Ltd. the carrier did not follow the shipper's instructions for the care of apples. The carrier was held responsible.