Problems with refrigerated containers? Perish the thought


12 Temperature-controlled


Greater care of equipment and attention to the accuracy of information on cargoes are crucial to avoid damage and loss of perishable goods in transit. TT Club’s claims executive, Mike Yarwood outlines how to manage risk and minimise claims when handling temperature-controlled commodities.


cargoes


present greater challenges and risk exposures for the logistics operator than ambient goods. As the world’s specialised reefer ship fleet declines containers could be used for up to 75% of all temperature controlled cargo shipments by next year. So, the process of correctly packing, handling and monitoring refrigerated containers and their cargoes will continue to demand attention. Perishable cargo is oſten high


paying freight and it can also give rise to high value exposures; a container of lobster, for instance, could be worth more than £250,000 – plenty of incentive to take extra care. As a major insurer of this supply


chain process, TT Club has vast experience of how things can go wrong. We find that most insurance claims involving perishable cargo occur due to confusion between Celsius and Fahrenheit; poor communication of requirements (plus versus minus temperatures); and failure to monitor or plug in the container throughout its journey. In the UK we’ve experienced


cases where confectionery that should have been transported at +10°C was delivered at -10°C, reeking frozen fish at +20°C instead of -25°C and animal carcasses at a biting -22°C rather than a cool +1°C, all resulting in losses of over £50,000. There are innumerable


opportunities throughout a supply chain for such catastrophic errors and oſten the simplest mistake can result in expensive claims from cargo owners. Foodstuffs


especially are subject to stringent restrictions to ensure safety through the food chain. These will oſten dictate that even the smallest abuse in temperature can result cargo being refuse and condemned as unfit for consumption. For the logistics operator, it


is vital to know your shipper when handling temperature controlled cargoes. In the first instance it is generally the shipper’s responsibility to provide specific instructions and requirements for the carriage of the cargo. But increasingly, this responsibility is passed to the logistics service provider, especially for full supply chain managed operations in which the forwarder assumes responsibility for the entire supply chain. Whatever the circumstances,


the logistics provider should actively seek advice, clarification and agreement from the shipper regarding such requirements, and contracts specifying these should be regularly checked, especially at renewal. It should also be noted that industry regulations - and therefore carriage requirements - for perishable cargoes can change fairly regularly. For most cargoes, the shipper will


normally declare a set temperature at which it is to be maintained throughout the transit. For less sensitive chilled cargoes, a range of acceptable temperatures may be stipulated. In either case, when sub-contracting transport moves - whether short inter-depot transfers or global container movements - it is essential to ensure that clear and accurate written instructions are


passed down the contractual chain. The margins for error are oſten


very small, the difference between “–“ and “+” temperature can be easily confused in communications, probably with catastrophic results. Freezing an ambient cargo can be just as damaging as overheating a frozen one. While the Centigrade scale is


most widely used and recognised globally, the US for example uses Fahrenheit. Adding to the confusion, 0°C is a widely recognised temperature setting for chilled cargoes, whilst 0°F is a widely recognised temperature setting for frozen cargoes. Again, accurate communication is key to avoiding losses. Once the shipping instructions


have been made clear, the container needs to be functioning properly. Reefer equipment should be regularly inspected for conformity, especially prior to loading and


units should be


serviced and maintained regularly. Visual checks for damage should also be carried out before packing. Damage to the internal vents, perhaps caused by previous poor stowage, can severely affect air flow through the unit, which can prevent the actual temperature from reaching the set point. It


is also essential to check regularly that the data logger


equipment is fully working. As technology has developed


in


recent years, it is now possible to monitor this data remotely and even for warnings to be raised when temperatures fluctuate unexpectedly. However, it is of little value if the data logger itself is not working. Pre-packing checks and correct


packing are also important. The transport unit should be in good condition, clean and free from odour. The cargo must be evenly distributed, taking care to ensure a free flow of air and pallets stacked safely and securely. Crucially, cargo should


be


cooled to the desired carrying temperature before loading. The reefer unit is not intended to cool cargo down, merely to maintain the set point temperature. At TT Club we have found that cargo packed at elevated temperatures is one of the leading causes of claims. If


things do go wrong with


temperature sensitive cargoes, speed is of the essence - timely intervention aſter an issue has been discovered can dramatically reduce any losses. And aſter an issue is discovered, appointing an expert to attend and assess an allegedly temperature-abused cargo can oſten mean that at least some of the cargo is either accepted or saved for a salvage sale.


Key Points:


1. Know your shipper 2. Understand the correct requirements for the specific cargo being transported and verify them


3. Ensure accurate information is passed through the contractual chain.


October start for CILT’s relaunched Customs forum


The relaunched Chartered Institute of Logistics and Transport (CILT) Customs and International Trade Forum hopes to have its inaugural meeting in mid-October, chairman Mark Corby told FBJ. This would probably be in London, but the new organisation also hopes to hold events in Manchester and the Midlands. As well as regular events


covering a range of customs and trade


compliance issues,


the Forum also plans to offer a range of publications and other resources, with the emphasis on information that is not currently easily obtainable. “The aim is to give people involved in customs the right tools to do the job,” Corby


explained. CILT membership costs from


around £100 a year and there will probably be an additional charge for meetings. Meetings may also be open to non-CILT members at an enhanced rate. Everyone involved in


international trade including shippers, exporters, importers, consultants, soſtware developers and freight operators is welcome. The latter would in fact be particularly encouraged, said Corby, as they are recognised as having expertise in key areas. More information on the forum


programme will be announced as it becomes available at: www.ciltuk.org.uk


Issue 6 2013


///INSURANCE NEWS ROUNDUP


FORWARDING & LOGISTICS


Norbert Dentressangle is to buy fellow French company Daher Group’s freight forwarding operations, subject to approval by the French competition authorities. Daher operates a network of eight offices in France and three in Russia, has 287 employees – of which just over 100 are in Russia - and has expertise in chemicals, aviation, automotive and luxury goods.


Supply chain services and solutions company UTi has officially opened its new London operation at West Drayton near Heathrow. The 33,000 sq. ſt. building has HD standard CCTV and security access controls, X-ray screening, bonded storage, including refrigerated capabilities. Dangerous goods safety advisors are on staff. The warehouse also has Home Office Section 5 approval for handling firearms and ammunition shipments. It will be used for consolidation of air cargo to and from the other UK locations and there will now be space for contract logistics activities to complement the current freight forwarding and customs brokerage operations.


China is switching from Nationwide Business Tax (BT) to Value- added Tax (VAT) for freight forwarders and will affect invoicing procedures, reports the Expeditors website. Forwarders will have to use the special VAT invoice for freight transportation services including a 6% VAT fee. However, it was reported in early September that there was widespread confusion over how the new tax would be applied.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32