Thursday, October 20, 2011

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