Refrigerated container cargo claims on the rise warns Britannia Club

Britannia Club says there is evidence of rising refrigerated container cargo claims
Britannia Club says there is evidence of rising refrigerated container cargo claims

In the past two years, the Britannia Club has opened just over 250 claims files for allegedly damaged refrigerated container cargo carried on operators’ vessels, with the number of such claims being on the rise recently.

Cargoes carried in refrigerated containers are many and varied, including meat, vegetables, fruit, live plants, flowers and medicines, all requiring their own bespoke temperature and atmosphere management.

Where there is the loss of the entire contents of a 40’ high cube container, the claim cost can be substantial. Dependent on the nature of the product, the refrigerated container will be assigned an appropriate “set-point” carriage temperature, either frozen or chilled as stipulated by the shipper.

This temperature is to be maintained from loading the container at the shipper’s facility, throughout the voyage until ultimate delivery to the receiver when the container is unloaded.

The other two settings that can be crucial to the successful outturn of certain products carried in refrigerated containers are the humidity and the air exchange rate.

The majority of claims arising, where a consignment is found in an apparent distressed condition upon receipt, are due to temperature abuse. This can occur due to a number of reasons:
– Cargo stuffed into the refrigerated container whilst at a temperature significantly different from the carriage set-point temperature. Refrigerated containers are not designed to cool cargo to the set-point, with the result that it takes many days for the core of the cargo to be cooled to the required carriage temperature.
– The temperature of cargo to be stuffed into a refrigerated container should be at or very close to the set-point temperature.
– Incorrect set-point temperature.
– Refrigerated container malfunction.
– Refrigerated container failure.
– Lack of electrical power, either post stuffing and prior to loading, whilst onboard due to the refrigerated container not being plugged in upon receipt on board, the socket being inadvertently switched off or the plug removed in error during the voyage, whilst in transit ports or while in transit to the receiver at/from the final discharge port.
– Excessive voyage length, due to port congestion, deviation due to Covid restrictions or other reasons, or vessel breakdown, reducing the usable life of the product upon delivery to receivers, or causing its deterioration prior to delivery.

Before loading

Prior to delivery to the shipper for stuffing, all refrigerated containers should be subject to a Pre-Trip Inspection (PTI) on behalf of the carrier, conducted by a suitably qualified person. The PTI will include a visual inspection of the container’s structure and refrigeration machinery and a function test of the plant.

In case of a failed test, the necessary repairs should be carried out before re-testing. Where stuffing is delayed or the shipment cancelled, it is recommended that the carrier’s procedures stipulate the maximum validity of a PTI prior to stuffing, after which a new PTI will be necessary.

The required set-point temperature and any humidity range and/or air exchange requirements are usually stipulated on the Bill of Lading/Sea Waybill, with often only a required set-point temperature detailed. All required carriage conditions should be set prior to container stuffing and the container cooled to the set-point before being filled.

On board the vessel

Refrigerated containers should be stowed allowing safe access for periodic checking and for repairs. Britannia recommends that they are stowed no higher than the second tier from the deck or lashing bridge, and when on the second tier, a properly secured and rigged working platform should be fitted along with a safe means of access.

Access for checking and conducting repairs on refrigerated containers on the second tier should be subject to a risk assessment.

We are aware of refrigerated containers being stowed three or four tiers from the deck or lashing bridge, where checking during the voyage and the provision of repairs would be unsafe, if not impossible in the case of major repairs being necessary, such as changing a compressor says Britannia Club.

Upon loading, the vessel should ensure that all refrigerated containers designated as containing cargo that is temperature controlled, should be plugged in, the plug locking collar engaged on the socket, power switched on, and the socket box access securely closed to prevent spray and water ingress.

The refrigerated container function and temperature should also be checked every six hours and records of time and date, and delivery and return air temperatures kept.

Internet of Things (IoT) technology

Internet of Things (IoT) refers to a network of interconnected devices and objects connected to the Internet, and it has also been introduced to the world of refrigerated containers.

In fact, some refrigerated container operators today offer IoT as part of their service, which allows the shipper to remotely pinpoint the container’s real-time location as well as monitor and maybe even adjust some of the container’s settings.

While this is all very convenient for the shipper, it does provide some concerns to the carrier, who is ultimately responsible for monitoring the container’s performance during its voyage, particularly as the container settings can now be altered remotely and without their knowledge according to Britannia.

For this reason, the carrier needs to ensure that for containers installed with IoT technology, the contract of carriage clearly states that:
– The setting instructions, which may be stipulated on the bill of lading or on the reefer manifests/instructions provided to the ship for each container, remains the legally binding instructions in terms of the container’s settings, and which the ship shall monitor during the voyage.
– Changes to these instructions should be communicated in writing, so that there is a clear paper trail of the instructions provided by the shipper to the ship.
– The carrier cannot be held liable for any remote changes to the settings which has not been notified to the ship as agreed by the contract.
– The carrier shall not be held liable for any malfunctioning of the IoT module.

In addition, the carrier should continue to monitor the containers installed with IoT technology in the same manner as with conventional refrigerated containers to ensure that:

– At loading the refrigerated container is in a good working condition and that the settings are as prescribed by the bill of lading or reefer manifest/instructions.
– During the voyage the container continues to work satisfactorily and maintains its set values.

Any indication of error, sign of faults or changes to the container’s settings should immediately be reported to the shipper for its clarification and further instructions.

Finally, the ship should be able to document that they have monitored the refrigerated container during the voyage as required and, if there is any sign or suspicion of the container malfunctioning, preserve evidence in order to reject a potential claim.

 

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