Cargo damage & claims:- Pre-shipment precautions for garlic in reefer containers

Cargo losses are very high in tropical countries, especially in the third world. The damage to reefer cargo is substantial where ambient temperatures are high, and losses in these regions can be as much as 30-35%. This is due to many factors including a poor transport infrastructure, absence of sufficient cold storage facilities, poor marketing infrastructure etc.

Dubai has recently seen a spate of claims in respect of alleged damage to consignments of garlic imported from China. The garlic market in Dubai is controlled by a limited number of traders, one of whom is the main importer of Chinese garlic. The Chinese harvest season runs from July to August. The cargo is imported either in bulk on reefer vessels or in reefer containers.

The quality and condition of the garlic is particularly affected by temperature and moisture, as well by gases like CO2 produced by respiration of the living cargo. Any problems can result in the deterioration and reduction of storage life of garlic exposed to abnormal and unwarranted changes in temperature. The storage life of garlic is typically 6-9 months depending on the storage conditions. The shippers and/or charterers should provide vessel interests with clear carriage instructions regarding the temperature, humidity levels and ventilation exchanges.

Carriage instructions and difficulties for the vessel

A feature of the recent cases is that vessel interests have accepted carriage instructions from the shippers/charterers, that create compliance difficulties for the vessel. For example, in one case the instructions were:

1. Holds pre-cooled to minus 5°C before loading
2. delivery air temperature of 0°C during loading
3. carriage temperature of minus 3°C
4. humidity 60-65% CO2 below 1%
5. air exchange minimum twice daily
6. a return air temperature of minus 3°C must be achieved within 3 days of the
completion of loading.

Apart from the requirements regarding monitoring and record keeping, these instructions caused a number of difficulties for the vessel, even with the refrigeration machinery working perfectly. Most notable is the difficulty posed by high pulp temperatures at the time of loading.

The pulp temperature is the temperature inside the garlic bulbs.

The cargo is brought from its place of harvest to the port in open trucks and is at times stored on the quayside without cooling for a long period prior to loading. Garlic can begin to sprout if damp, giving off heat in the process. In at least one case the pulp temperature at the time of loading was between 28°C and 32°C. Due to the high temperature of the goods at loading, the required return air temperature can be reached 9 days after loading and for some cargo spaces as long as 13 days after loading. The vessel will be unable to bring the temperature down to the necessary level in the agreed 3 day period.

The claims

A charter party will often require the charterer and consignee to be given daily temperature reports from the vessel. When the consignee finds that the temperature requirements have not been fully complied with, the ship is held responsible for any alleged damage to the garlic even before the vessel arrives at the discharge port. It is common practice to threaten the arrest of the vessel and to demand a guarantee as security for the claim.

The damage the Consignee often alleges to have occurred is `internal sprouting' of the garlic. Samples of the garlic will be cut at random and an allegation of an unacceptably high rate of sprouting is made. Consignees might allege that, if the carriage temperature is not maintained at minus 3°C, the sprouting will increase.

This results in a reduced storage/shelf life of the garlic, forcing the consignee to sell the garlic at a reduced price. The alleged loss is quantified either as a percentage of the invoice value by the Consignees' Surveyor or by producing sales invoices at a later stage. Claims often run in to hundreds of thousands of American dollars.

Clausing is the process of adding clauses or phrases to the bill of lading rather than issuing a clean B/L.

It can be difficult to defend these claims in the United Arab Emirates, particularly when a clean bill of lading has been issued. Vessel interests face the difficult burden of proving that problems with the garlic would not have been apparent at the time of loading and so clausing would not have been an option because the damage was due to inherent problems. In many cases, it is suspected that the real cause of damage is the high pulp temperatures prior to shipment. Vessel interests may be left with no other option but to negotiate a settlement on the best terms possible.

Vessel interests are advised to take special precautions when loading garlic, particularly in China, but also elsewhere where pre-shipment conditions are likely to cause problems when complying with carriage instructions. Among the precautions that vessel interests can take are:

1. Not to accept carriage instructions that the vessel is likely to have difficulty in complying with. In particular, the requirement of a return air temperature should not be accepted as it can depend on factors beyond the vessel's control, for example pulp temperature or quayside storage. Required carriage temperatures should only be accepted as delivery air temperatures as this is under the vessel's control.

2. The acceptance of carriage instructions, particularly under a charter party, should be on the express condition that the garlic is dry and that the pulp temperatures are within an acceptable range at the time of loading. Vessel interests can reserve the right to reject for shipment a non-compliant cargo and insist the charterers/ shippers have it dried and/or cooled before shipment.

3. If there is no alternative but to ship garlic with high pulp temperatures, an appropriate remark such as "shipped at pulp temperatures...at shippers risk without responsibility for loss or damage howsoever caused" could be inserted in the bill of lading

4. Shippers should be asked to provide information and evidence at the load port as to where the garlic originated from, how old it is and how it has been stored ashore. Failing this, vessel interests should seek to obtain the same. Photographs, including `close-ups' of the garlic, can be taken and records of weather conditions prior to loading should be kept.

5. Pre-shipment inspections of the garlic, with a view to clausing the bills of lading, should include any signs of rotting, staining and wetting. Packing should also be inspected, including a check to see if sufficient ventilation is provided. If there is no routine monitoring of the pulp temperatures and the vessel suspects these to be high, a surveyor can be instructed to attend on the vessel's behalf. His inspection can include a check for internal sprouting.

6. Tight stowage should be avoided as this makes it more difficult for the refrigerated air to circulate and for gases to be vented off.

7. Monitoring equipment should be calibrated and in full working order. Full and proper carriage records should be kept.

8. With the shipper's approval, a small sample of garlic can be placed in the vessel's own stores. The temperature monitoring and records could provide a useful comparison to the garlic in the holds, and may be important at a later stage.

Our detail pages below examine some typical cases of damage to reefer cargoes and countermeasures against poor information transfer and communication.

Cargo damage & claims:- Delivery of frozen cargo without Bills of Lading resulting a cargo claim

Whenever any cargo damage occurs, answers are sought as to why, where and when it occurred, reinforcing the commitment that whoever is responsible for damage is also accountable for it.

Liner agents took delivery of two discharged containers of frozen beef. The agents arranged for the two containers to be transferred to cold storage where they were stripped and the beef placed in storage awaiting delivery instructions.

A short time later, the storage company delivered the beef to a third party on the instructions of the consignee, without the bills of lading being surrendered. It was not until two weeks later that the agents became aware that the original bills of lading had not been surrendered and their enquiries revealed that the beef had already been delivered. At about the same time, the agents learned that the consignee had filed for bankruptcy.

A bill of lading (also referred to as a BOL or B/L) is a document issued by a carrier, eg a ship's Master or a company's shipping department. It acknowledges that specified goods have been received onboard as cargo for transport to a named place for delivery to the consignee, who is usually identified.

Lawyers advised that the agents' principals would be liable to the holders of the bills of lading for the value of the cargo, and that they in turn would have a good claim for indemnity against the agents for allowing the release of the cargo without ensuring that the bills of lading were first surrendered.

The value of the cargo was US$3,400. This was settled in full with the line and the shippers, in return for an assignment of their rights against the storage company and the notify party. Unfortunately after a full investigation, lawyers advised that a claim against the storage company was unlikely to succeed and there was little prospect of any recovery from the consignee's receivers.

Ironically, most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

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

Cargo damage & claims:- Contamination of a tank container of wine from Australia to the USA

Most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures.
A tank container with a shipment of 21,000 litres of wine was consigned from Australia to the USA. On arrival, the consignee refused to take delivery as the accompanying documents did not include the relevant certificate of food quality. It was also alleged that the wine was contaminated.

Arrangements were made for the tank container to be returned to Australia where tests could be carried out and, if necessary, the wine distilled to remove its alcohol content.

Enquiries revealed that the tank container had been used previously for a cargo of liquid detergent, and that a steam clean as well as the replacement of all the gaskets and seals to remove all traces of the detergent were necessary to bring the tank up to food quality standard. This had not been done and as a result the wine had become contaminated.

As a clean B/L had been issued the carrier had no defence against a claim from the shipper but the carrier in turn looked to the agent for indemnity under the terms of their Agency Agreement.

The tank container was ordered by the agent from a yard that was not used to dealing with tanks that were used for food and was unaware of the necessary food quality standards. The agent's written instructions to the yard specified the tank needed by container number, and also that it was intended to be used for the carriage of a cargo of wine, but the yard did not take any action to ensure that contents would not become contaminated. It was necessary for the agent to ascertain the previous contents of the tank from the import container files, but this was not done.

The liabilities of the shipper were investigated but, as an inspection of the tank before filling would not have revealed the presence of any liquid detergent residue within the seals and gaskets, these investigations were not pursued.

In due course, a claim for A $89,299 was made against the carrier. The Club decided to obtain their agreement from the agent, negotiating a settlement directly with the shipper to agree the best possible terms and to avoid any unnecessary costs. This was done and settlement was agreed at A$61,000. No costs were incurred.

Our detail pages below examine some typical cases of damage to reefer cargoes & countermeasures against future claims

Cargo damage & claims:- Agents liability for reefer cargo damage survey at discharge port

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

Cargo damage & claims :-Suitability of reefer containers, cargo damage due changing set-points & misinterpretation

Reefer containers are not designed to withstand ingress of water etc or left standing in water for long periods of time.Prior stuffing it is important to ensure that the locking bar is in order so that the doors can be closed properly. There should be no holes etc on the roof and side panels of the container. The container should be odourless and clean. Integrity of the container floorboard should be strong enough. The cargoes have to be properly packed and lashed within the container so as to prevent cargo movement during transportation. There should be an equal distribution of weight within the container. After stuffing, container should be closed properly and sealed.

Most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

In Agfa Gevaert Inc v SS TFL Adams and Trans Freight Lines, refrigerated stowage carried in breach of the contract with the shipper was seen as an unreasonable deviation, preventing the carrier from relying on the package limitation under The Hague Rules and COGSA. This lapse had occurred as a result of the practice of carrying ordinary non-refrigerated cargo in reefer containers to maximise use, which led to mistakes occurring with cargo requiring refrigeration.

Change of Set-point Temperature resulting cargo damage

A case was reported where a reefer container temperature set-point was maliciously changed by one of the ship's officers as a result of internal multinational manning problems. Luckily, the change in set-point was noticed during the daily inspection rounds and serious cargo damage was prevented.


Cargo Damage due to Misinterpretation of `Frozen' and `Deep Frozen'

In this case, where a cargo of lobster tails were described by the shipper as `frozen', the carrier should have verified the actual condition of the cargo, which was deep frozen and therefore required to be kept at minus 18°C. The lower court held that the carrier was not responsible for products which should have been carried at minus18°C when the goods were shipped as merely requiring `refrigerated stowage' and the tariff rate was for goods that were frozen rather than deep frozen. On appeal the higher court found the carrier responsible, declaring that the carrier was a specialist who must enquire how the cargo should be carried, and should be alerted by the word `frozen' appearing on the bill of lading.

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

Cargo damage & claims:- Failure to instruct cargo terminal resulting in reefer cargo damage

Any reefer cargo needs constant monitoring during transport to maximize product shelf life and ensure higher market value for products at destination market place.
Refrigerated container temperature control equipments that include reliable microprocessor controllers, controlled atmosphere, extremely low temperature containers, dehumidification, and environmentally friendly CFC (chlorofluorocarbon) free boxes. Selecting the right container for your cargo, ensuring correct stowing & securing practices, are critical . Whenever any cargo damage occurs, answers are sought as to why, where and when it occurred, reinforcing the commitment that whoever is responsible for damage is also accountable for it.

Importers of wine from France to the United States had previously encountered problems with consignments imported through New York during the winter months, when the wine could be subjected to sub- zero temperatures causing it to freeze and lose its quality.

In response to this problem, the line issued instructions that asked the agent to instruct the terminal operator to open the container as soon as it was delivered and place portable heaters inside to keep the temperature in the container above freezing.

Unfortunately, the agent failed to give the necessary instructions with respect to a cargo of nine containers of wine. While eight of the containers suffered no damage the carriers received a claim for US$120,000 for freezing damage to the remaining container.

A claim was made against the Agent, and after lengthy negotiations a satisfactory settlement in the sum of US$32,650 was agreed.

Ironically, most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

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

Cargo damage & claims:- Reason of frozen lobster damage in a reefer consignment

Whenever any cargo damage occurs, answers are sought as to why, where and when it occurred, reinforcing the commitment that whoever is responsible for damage is also accountable for it.

Action upon receiving reefer cargoes in a rotten / lost condition?

. Contact your insurance company if your cargo is insured and carrier and/or
carrier’s agent immediately to arrange for a joint survey.
. You are advised to cease unstuffing operations if damages/loss are found and
await instructions from the agent’s surveyor.
. Notice of damage/loss has to be lodged within three days upon taking delivery
of the container

Reason of frozen lobster damage in a reefer consignment

A liner agent employee in Taiwan booked a 20 foot reefer container of lobster from Keelung to Melbourne. When the stowage plan for the port of Keelung was prepared, due to a clerical error in the agent's office the container of lobster was shown as part of the general stow. As a result the container was off-power for the voyage and, on arrival at Melbourne, the entire cargo of lobster was declared a total loss.

The receiver claimed US$74,000 from the line, and the line claimed the same amount from its agent. Although it was initially felt that the line had failed to mitigate its loss and had paid too much, the Club paid the claim in full, after consulting lawyers. It is important to mention that the financial consequences of simple errors are impossible to foresee. In this instance the value of the cargo was US$74,000 but it could easily have been a much larger figure.

In 2007 it is unusual for a claim on a refrigerated cargo to be less than US $100,000 per refrigerated container. Ironically, most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

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

Cargo damage & claims:- Reefer cargo pre-shipment failure to provide suitable conditions or information

Whenever any cargo damage occurs, answers are sought as to why, where and when it occurred, reinforcing the commitment that whoever is responsible for damage is also accountable for it.
Action upon receiving reefer cargoes in a rotten / lost condition?

Contact your insurance company if your cargo is insured and carrier and/or carrier’s agent immediately to arrange for a joint survey.
You are advised to cease unstuffing operations if damages/loss are found and await instructions from the agent’s surveyor.
Notice of damage/loss has to be lodged within three days upon taking delivery of the container

Reason of frozen lobster damage in a reefer consignment

A liner agent employee in Taiwan booked a 20 foot reefer container of lobster from Keelung to Melbourne. When the stowage plan for the port of Keelung was prepared, due to a clerical error in the agent's office the container of lobster was shown as part of the general stow. As a result the container was off-power for the voyage and, on arrival at Melbourne, the entire cargo of lobster was declared a total loss.

The receiver claimed US$74,000 from the line, and the line claimed the same amount from its agent. Although it was initially felt that the line had failed to mitigate its loss and had paid too much, the Club paid the claim in full, after consulting lawyers. It is important to mention that the financial consequences of simple errors are impossible to foresee. In this instance the value of the cargo was US$74,000 but it could easily have been a much larger figure.

In 2007 it is unusual for a claim on a refrigerated cargo to be less than US $100,000 per refrigerated container. Ironically, most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

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

Cargo damage & claims:- Reefer cargo care - ships failure to maintain necessary conditions

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.

Cargo damage & claims:- Reefer cargo losses due temperature failure & preventive measures

If inland transit time is greater than 2 hours for chilled cargo and 8 hours for frozen cargo, it is recommended to use the generator set to supply power to container during inland tracking . IF A GENERATOR IS NOT AVAILABLE, THEN IT is SUGGESTED THAT THE CONTAINER IS PLACED ON POWER FOR AT LEAST 6 HOURS PRIOR TO THE TRANSPORT . THIS WILL ALLOW THE MACHINERY TO EXPELL THE AMBIENT AIR THAT HAS ACCUMULATED INSIDE THE CONTAINER DURING LOADING. THUS THE PRODUCT TEMPERATURE IS STABILISED BEFORE TRANSPORT. FOR A 40 feet REEFER IT IS ESTIMATED THAT APPROXIMATELY 10 TO 13M3 OF AMBIENT AIR IS ACCUMULATED INSIDE THE CONTAINER.
Laden heat from external ambient may cause raise in carriage temperature if the reefer unit is left off power for too long. Hence it is always recommended to truck reefer cargo during cooler climate (at night) or with clip on generator set to ensure continue power supply during land transportation.






















Fig: Reefer container heating process

Incorrect Temperatures Maintained due to Poor Paperwork

The following reefer cargo claims resulted from errors made by the ship's agent when entering temperatures on the ship's documents or by inputting incorrect details into a computer.

Cheese from Denmark to the UK was carried at 0°C instead of minus 20°C. Concrete additives from Bremerhaven to Helsinki, which needed to be maintained at a temperature of +10°C to prevent frost damage, were carried at minus 6°C.

Bottles of wine from Antwerp to the US were carried at minus 20°C. Frozen beef was stored at +2°C as the temperatures for two reefers had been transposed by the Agent.

Incorrect Instructions for Reefer Temperature Setting

When the ambient temperature is warmer than the cargo, operating the reefer with the rear doors open will NOT cool down the cargo. The introduction of hot ambient air will heat up the cargo instead.

When hot humid air enters the reefer, moisture condenses on the cold cooling coil and turns to ice. Ethylene entering the reefer from genset exhaust may cause ripening of fresh produce. Exhaust odour may give product off-fl avours. Cooled air escapes out the rear door, and the cycle continues. Once loading is complete and the doors are closed the reefer could run for hours with a partially iced up cooling coil, reducing its cooling effect, and putting the cargo in danger until the unit completes a defrost cycle

A port agent in the UK received a container list from his principal's South American agent. This included two containers of frozen meat shipped at minus 18°C. When this information was transferred to the agent's computer system, the containers were shown as containing film with a temperature setting of +13°C.

Unfortunately, the error was not picked up even after additional checking, with the result that when the containers were discharged at the UK port they were set to +13°C in accordance with the agent's instructions. Three days after arrival at the container depot, blood was seen seeping from the doors of the containers, these were then opened to reveal the rapidly thawing beef.

The temperature control was re-set to minus 18°C to try to stabilise the consignment. Surveyors were immediately instructed by the carrier's P&I Club, and the Port Health Authority issued notices stating that the consignment could not be used for human consumption. An offer was accepted for salvage, this reduced the claim against the agent and was settled by the Club.

Our detail pages below examine some typical cases of damage to reefer cargoes & countermeasures against future claims

Cargo damage & claims:- Reason of reefer cargo losses ,damage investigation & preventive measures

In commerce and manufacturing, there are many uses for refrigeration. Refrigeration is used to liquify gases - oxygen, nitrogen, propane and methane, for example. In compressed air purification, it is used to condense water vapor from compressed air to reduce its moisture content. In oil refineries, chemical plants, and petrochemical plants, refrigeration is used to maintain certain processes at their required low temperatures (for example, in the alkylation of butenes and butane to produce a high octane gasoline component). Metal workers use refrigeration to temper steel and cutlery. In transporting temperature-sensitive foodstuffs and other materials by trucks, trains, airplanes and sea-going vessels, refrigeration is a necessity.
Dairy products are constantly in need of refrigeration, and it was only discovered in the past few decades that eggs needed to be refrigerated during shipment rather than waiting to be refrigerated after arrival at the grocery store. Meats, poultry and fish all must be kept in climate-controlled environments before being sold. Refrigeration also helps keep fruits and vegetables edible longer. Cargo losses are very high in tropical countries, especially in the third world. The damage to reefer cargo is substantial where ambient temperatures are high, and losses in these regions can be as much as 30-35%. This is due to many factors including a poor transport infrastructure, absence of sufficient cold storage facilities, poor marketing infrastructure etc.

Whenever any cargo damage occurs, answers are sought as to why, where and when it occurred, reinforcing the commitment that whoever is responsible for damage is also accountable for it.

Ironically, most reefer cargo damage occurs not because of technical reasons, but due to poor communication systems, management practices or administrative procedures. Most of these losses could have been avoided if appropriate checklists had been made and strictly adhered to, and the systems followed. Weak links in the chain of information need to be strengthened.

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.

Documents are fundamental in the investigation of a claim involving damage to cargo. They will be examined by the technical surveyors and may be used as evidence in subsequent legal proceedings. The following documents are likely to be important in the event of a claim:

Ship's log
bill of lading
Mate's receipts and attached record of the inspection of the cargo prior to and
during loading
deck log of loading and unloading
stowage plan
engine room log
any documentation arising from disputes during unloading and/ or the receipt of
cargo.
Photographs and video recordings can provide crucial additional evidence to
support statements in the logs and inspection reports.

It is important to understand how to keep cargo fresh . Ensure that your cargo travels in an unbroken cold chain from the point of origin to the final destination, in close coordination with leading reefer container carriers and service providers. Any observations that indicate the cargo temperature is high or that the cargo was delivered in a damaged or deteriorated condition should be supported, if possible, by further evidence. This evidence might include photographs taken during the pre- shipment inspection or results of reports by cargo surveyors.

As soon as any question is raised over the condition of the cargo, the ship's Master should begin to document the events surrounding the discovery of the defective material, along with the nature and possible extent of the alleged defects.

If possible, loading or unloading of the vessel should be halted and the hatches closed until a cargo surveyor is present. Ideally, the cargo should be inspected and sampled while it is still in the hold or during discharge. This will allow the surveyor to determine the nature of the damage and whether it is related to its position in the hold.

Once the cargo has been discharged into the store, the process of relating any damage to its location in the hold is more difficult. This can be impossible unless the cargo is adequately labelled. Therefore, if loading or unloading must continue, the Master should ensure that as it leaves the hold each cargo unit is labelled with the hatch number and deck as well as its location. The deck log should also record the destination of the material and the agent responsible for handling it.

When a problem is identified during loading or unloading, for example if the temperature of the cargo is too high, loading or unloading should stop until the cargo has been inspected by a specialist surveyor. If the dispute concerns the quality of the product, it will probably be necessary for at least one specialist surveyor to examine the cargo to establish its current quality and determine the nature and cause of any defects.

If it is suspected that the defects result from maritime causes, an expert in ship operations should assess, for example, physical damage from movement of the cargo or from contamination with seawater, fuel oil or bilge water. If the defects can be attributed to the initial quality of the material when loaded or to the way the product was stowed and carried onto the vessel, a specialist surveyor is necessary.

Specialist reefer surveyors offer customised reefer solutions, ranging from single corridor port-to-port to multiple corridor door-to-door solutions with full end-to-end visibility. Many of the surveyors appointed by local shipping agents are general marine surveyors, often with a seagoing background. They are not necessarily skilled in the evaluation of, say, the quality of fish cargo. Masters and agents are advised to check the expertise and qualifications of the surveyors carefully to ensure that their technical background and experience are appropriate for the particular job.

As a general rule a single surveyor should not be commissioned for both a cargo survey and a survey of the vessel's condition. Since the skills required for each type of assessment are different, it is unlikely that one person would have experience in both areas at the levels of expertise required. For example, a fish cargo surveyor should have a background in food science and experience in the inspection of food products, ideally in assessing the quality of frozen fishery products.

Our detail pages below examine some typical cases of damage to reefer cargoes and countermeasures against poor information transfer and communication.