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Issue 8 2019 - Freight Business Journal Insurance


The explosive issue of tank container safety


In the light of US rulings over the serious fire on the MSC Flaminia, TT Club’s managing director loss prevention, Mike Yarwood takes a close look at how the ISO tank container should be handled.


With its robust design and durability ithe tank container has become recognised as a highly safe, cost effi cient, fl exible and environmentally friendly means of transporting bulk liquids and chemicals globally, allowing seamless transfer between all land and sea modes. According to the International


Tank Container Organization (ITCO) global fl eet survey 2019, there are over 600,000 UN portable tanks in the global fl eet, and this is expected to grow. TT Club has an insurable interest in around 40% of the global fl eet and recently hosted a day seminar for stakeholders in this niche sector of the supply chain, attracting over 80 delegates from all over Europe representing tank container owners, operators and lessors, as well as key service providers, lawyers and insurance brokers . Peter Skoufalos, partner


at transport law fi rm Brown, Gavalas and Fromm delivered a fascinating fi rst hand overview of the MSC Flaminia litigation to date, highlighting fundamental issues which tank container operators should consider in their daily operations. Whilst the frequency of


claims generally is low, TT Club’s experience is evidence of the common errors and misconceptions which can result in the deterioration or total loss of the cargo and damage to the tank container equipment itself.


Keeping it clean Most frequent are allegations


of cargo contamination and whether the unit has been cleaned suffi ciently following discharge of cargo. It is imperative to ensure that the last carried cargo is fully removed before the next cargo is loaded. The


transport removal of certain


products may require additional internal cleaning, including


of valves


and changing of contaminated seals and gaskets, to prevent contamination of the next


cargo. As part of the pre-trip inspection the cleanliness of the tank container should be checked to ensure that it meets the requirement of the shipper, especially where some prior cargoes are banned or the cargo to be transported has particular sensitivities. The availability of a suitable


cleaning station should be taken into account prior to a cargo being


in transporting accepted for transport


and certain cargoes may not be able to be carried. The risks inherent


the


tank container in ‘empty/dirty’ condition to a location where there is a suitable cleaning station also need to be assessed. Apart


from identifying New Incoterms from 1 January


Forwarder Woodland is reminding customers that the International Chamber of Commerce’s new Incoterms come into eff ect on 1 January. FCA (Free Carrier – named place


of delivery) has been amended to allow the seller to require the buyer to procure an on-board bill of lading. Historically, a seller of a container shipment under FOB (Freight on Board) terms lost


control of the goods on arrival at the export port but remained liable until the it was loaded onto the ship. This exposed the seller to potential cost and risk. Incoterm FCA now answers this


problem and allows the parties to agree for the buyer to direct the carrier to issue the onboard bill of lading to the seller. Both CIF (Cost Insurance Freight) and CIP (Carriage and Insurance


Paid to) require the seller to provide basic insurance for the buyer equivalent to Clause C (Institute of


Cargo Clauses). However,


the two terms usually apply to diff erent classes of goods which call for diff erent levels of insurance coverage. In Incoterms 2020, the ICC seeks


to clarify this. CIF now keeps the same insurance requirements (Clause C) but CIP has increased


///NEWS


the level of insurance required to Clause A (Institute of Cargo Clauses). DAT (Delivered At Terminal) is


replaced by DPU (Delivered at Place Unloaded), eliminating confusion between DAT and DAP (Delivered at Place)


delivery takes place. DPU is now the only Incoterm where the seller has the responsibility and cost of unloading at fi nal destination. Import Customs clearance and related costs, however, remain the buyer’s responsibility.


over where and how


a


competent cleaning station, successful cleaning will require, among other things, complete and informative instructions, such as full identifi cation of the last carried commodity and complete and accurate cleaning instructions, taking account of future use of the unit. The operator must also heed


expert recommendations from the cleaning station. Certain types of tank container


can give rise to additional cleaning issues. For example, units fi tted with surge/baffl e plates have more internal surface area to clean and the areas where the baffl e plates are fi xed present particular challenges. The


tank operator should


also perform due diligence in selecting a service provider. In addition to the ability to clean the unit, there are ethical sourcing and environmental considerations. For example, the cleaning station should demonstrate an effl uent process system and be licenced to dispose remnant cargo. Finally, for truly safe and


effi cient handling of all tank containers, checks should always be made to verify permits, licences and local environmental requirements; the range of substances licenced and equipped to clean; and quality and safety records.


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