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Issue 3 2019 - Freight Business Journal Insurance


Keep your cool when handling perishables


Perishable cargo is often valuable, and brings welcome revenue to forwarders and carriers, but it also gives rise to higher exposure to liability and loss. TT Club’s Mike Yarwood advises on the extra care that should be taken by all stakeholders in the cool chain.


As the world’s reefer ship fleet continues to decline, it is estimated that containers are now used for up to 75% of all temperature controlled cargo shipments. Correct packing, handling


and monitoring of


equipment and cargo will continue to demand attention. In insuring this supply


chain process, TT Club has considerable experience of how things can go wrong. Most insurance claims involving perishable cargo are due to confusion over Celsius and Fahrenheit; poor communication of requirements (for example, plus versus minus temperatures); or failure to monitor or plug in the cargo transport unit throughout its journey. Instances of ambient cargoes,


such as bread and chocolate, being mistakenly shipped in deep freeze conditions or cargoes of fish and animal carcasses requiring to be shipped under deep freeze conditions below -18°C, being delivered to the consignee at +18°C are all too common. Inevitably, these simple mistakes result in a dramatic deterioration in the cargo, leading to claims of total


loss and oſten disposal costs. All stakeholders in the cool


chain must know their customer. Under the IMO/ILO/UNECE Code of practice for Packing Cargo Transport Units (CTU Code1


) it is


the responsibility of the shipper to define specific instructions and requirements regarding the transport of the cargo. This responsibility may be passed to a logistics service provider, not


least for full supply chain


managed operations. Whatever the circumstances the logistics provider


should


actively seek clarification and agreement from the shipper regarding all requirements, and contracts specifying this information should be regularly checked, especially at renewal.


It should also be


noted that industry regulations - and therefore transport requirements - have the potential to change for perishable cargoes fairly regularly. For most cargoes, the shipper


will normally specify a set temperature to be maintained throughout 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, clear and accurate written instructions must be passed down the contractual chain. Margins


for error are


oſten very small, the difference between “–“ and “+” temperature can be easily confused in communications and will likely have catastrophic effects on the cargo. While the Celsius scale is


most commonly used globally, certain regions (such as US) may use Fahrenheit. Adding to the confusion, 0°C is a widely recognised temperature setting for chilled cargoes, whilst 0°F (which is actually -18°C) 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 prior to packing. Damage to the internal vents, perhaps caused by previous poor packing, can severely affect the efficiency of air flow through the transport unit, which in turn can result in a failure to reach the set point temperature. It is also essential to check


regularly that the data logger equipment is fully functional. It is now possible to monitor data remotely and for warnings to be raised when temperatures fluctuate unexpectedly.


However, this is of little value if the data logger itself is not working. Pre-packing


checks role. The and


correct packing play an important


CTU


operator is responsible for ensuring that the provided CTU is in good condition, clean and free from odour.


The packer


also needs to be satisfied that the unit is clean2


. The cargo must


be evenly distributed with due care taken to ensure a free flow of air and pallets stacked safely and securely. Crucially, cargo should be cooled to the desired carrying temperature prior to loading; cargo packed at elevated temperatures is unlikely to achieve the desired setting and is at risk of rejection by the consignee. Whilst prevention is better


than cure, if things do go wrong time is of the essence, so early action can dramatically reduce the a loss. Prompt appointment of an expert to assess allegedly temperature-abused cargo can oſten mean at least a portion of the cargo being either accepted or saved through salvage sale. Further, there are specialist


distressed cargo service providers able to perform micro- biological analysis on cargo to determine whether or not it is safe to enter the food chain.


1 -ht tp://www.imo.org /en/ OurWork /Safety/Cargoes / CargoSecuring/Pages/CTU-Code. aspx 2 - See the Joint industry guidelines on container cleanliness: http:// www.worldshipping.org/industry- issues/safety/joint-industry- guidelines-for-cleaning-of- containers


DHL report sees new threats to the supply chain


Trade wars, cyber security incidents and climate change will be the top three threats to the supply chain in 2019, according to the latest DHL Resilience360 annual risk report, published on 25 March. The report examines last year’s


major supply chain challenges and identifies trends that will shape the risk landscape in 2019. Disputes between the US and


other countries, in particular China, including new unilateral import tariffs and the still-open question of the UK’s withdrawal from the EU are contributing to uncertainty. A rising number of incidents


involving supply chain and transport infrastructure showed


how criminal elements might obtain trade secrets, engage in blackmail or cause economic disruption. Climate change also presented


a myriad of severe weather-related disruptions in 2018, which was the fourth warmest year on record. Wildfires, droughts, low water levels and melting ice had the most significant impacts on supply chains. Resilience360 recorded the


most incidents in Germany and the UK. Two-thirds of high-impact events were caused by cargo theſt, industrial fires and explosions. Civil unrest accounted for the


second-highest portion of events at 12.9%. The Yellow Vests protests


in France and Belgium disrupted roads, ports and border crossings. A month-long drought in


summer and autumn resulted in record-low levels of water on the Rhine River which hit inland shipping traffic, in Germany, France and the Netherlands. Greece was struck by an


earthquake near Zakynthos Island, while Italy, Spain, France, and the UK experienced heavy floods. Looking ahead to 2019, the


report says that companies may also face additional costs and uncertainty due to raw material shortages, recalls and safety scares or tougher environmental regulations. Rising demand for raw materials, coupled with political


instability and supplier shutdowns, may result in shortages of crucial materials such as lithium, cobalt, and raw materials for plastics. Recalls and safety scares


may increase, as wider public awareness of quality issues and stricter enforcement by regulators in highly regulated sectors such as pharmaceuticals and medical devices subject products to higher scrutiny. Anti-pollution measures may


be expanded in 2019 to a broader range of industries in Asia and the US Environmental Protection Agency is also expected to announce new requirements.


www.resilience360.dhl.com


News Roundup Forwarding & Logistics


Ekol Logistics founder and majority owner Ahmet Musul has bought a 37% stake in the company - held since 2010 by Rigond Finance, a subsidiary of the Abu Dhabi-based Invest AD and SBI Holdings of Japan - bringing his total stake to 90%. He said the move would help accelerate efforts to transform the Turkish operator into an employee-owned company.


John G Russell (Transport) has gained Authorised Economic Operator (AEO) accreditation from HM Revenue & Customs, for its Hillington, Glasgow site. Benefits of AEO include simplified customs procedures, the right to ‘fast-track’ shipments with fewer physical and document-based controls and priority customs control.


Newark-based packing and haulage company International Logistics Centre has joined the Palletways network. The family-run business, which was founded in 1988, specialises in transportation, shipping, export packing, warehousing and storage. It operates in Africa, Russia, the Artic, Antarctica and the Middle and Far East, including movement of large gauge freight into the remotest areas of the Congo Jungle. It will offer domestic and international Palletways services.


The Rhenus Group has acquired Canadian-based logistics specialist Rodair, subject to regulatory approval. Rodair is involved in international freight forwarding, project logistics, courier, warehousing and distribution, 3PL services, and e-commerce solutions. Founded in 1996, it is headquartered in Toronto, and has business sites in Montreal, Calgary and Vancouver.


Rhenus is to take over South African freight forwarding and


logistics specialist, World Net Logistics (WNL), headquartered in Johannesburg, subject to regulatory approval. In addition to its South Africa network, the company also has branches and partners in Asia and Germany. It also has its own vehicle fleet for overland services as well as warehouse capacity in Johannesburg, Cape Town, Durban and East London.


DP World-owned short-sea specialist Unifeeder has opened a depot in Vienna to ensure availability of 45’ palletwide containers for the local exporters. The new depot will help customers cope with last- minute orders, changes or delays by adding or rerouting their cargo when needed.


Kerry Logistics subsidiary, KLN (Singapore) has signed a joint venture with Laos’s Sitthi Logistics to develop a 35-acre dry port in the Vientiane Logistics Park. The signing ceremony on 5 April was attended by the deputy prime minister of Laos, Sonexay Siphandone. In 2018, Kerry Logistics completed phase one of an inland port in Mandalay and an inland port in Yangon, Burma.


GEFCO Group has appointed Valérie Floridia as director of its Innovation Factory. Launched in 2018, the internal incubator offers employees worldwide an opportunity to propose and develop innovative ideas to help drive GEFCO’s growth. She brings 15 years of experience at major industrial companies such as Renault and EDF in France, Germany and the US.


Aerospace logistics specialist B&H Worldwide, has appointed Megan Laws to the new role of customer care manager to head up its global CustomerFirst! Programme, based at its London Heathrow headquarters. Laws joins from the procurement technology sector and will be responsible for maintaining and enhancing the CustomerFirst! Programme which aims to further drive up standards of service delivery and to set new standards for the industry.


John Adams is rejoining Davies Turner as head of trade, Middle East, Indian Subcontinent, South Africa and emerging markets at the forwarder’s ocean management team. He spent seven years at shipping line, MSC, and is replacing Todd Moore, who retires this month. Previously, Adams spent five years at Davies Turner in a sales development role.


///NEWS


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