Cargo - Containers

 

 

Handling Procedures

As with other types of cargo the adoption of proper procedures in documenting receipt of containerised cargo, its handling and delivery is vital in providing evidence to enable proper claims handling.

Shipper Packed Containers

Checking for Damage

Dangerous Cargo

Refrigerated Cargo

Checking the Seals

Clausing Bills of Lading

Deck Cargo

Secure Stowage

Evidence Required

 

 

 

Shipper Packed Containers

These bring special problems for the carrier because the cargo packed in the container cannot be inspected by the carrier when he takes over legal responsibility for the container and its contents. While the use of containers has revolutionised the efficient carriage of small parcels of cargo world wide it has also increased the potential for misdescription of cargo by shippers, the loading of unidentified hazardous materials by unsuspecting ship’s crew and even the smuggling of stowaways concealed inside containers.

 

It is not unusual to find that containers are either empty when they come to be opened after discharge, notwithstanding an intact seal, or full of worthless material instead of the contractual cargo. In some countries, the carrier is absolutely liable for loss of cargo if the container seal shows any sign of interference. There are others in which the courts will hold that the carrier is deemed to be responsible for the stated contents of a container, notwithstanding the fact that he may have had no opportunity to verify those contents. It is often difficult or impossible to recover the liabilities incurred in such situations from the shippers or others involved in the transportation of the cargo.

 

Checking for Damage

In all cases, whether shipper-packed or carrier-packed units, containers should be checked both internally and externally prior to use for any obvious signs of damage such as holes or poor door seals, remnants of previous cargo, tainting and the like. In the case of carrier-packed containers, care should be taken to ensure a safe and secure stowage of the cargo within the container and proper weight and load distribution. Weight and load distribution limitation is also important in the case of any combined transport movement involving road and/or rail carriage which may require the carrier to take account of any separate weight or load restrictions or limits relevant to such movements.

 

Dangerous Cargo

For shipments of dangerous cargo, special care should be taken to ensure that these are always carried in accordance with all applicable conventions, statutes and regulations etc (in particular the IMDG Code), including those applying in the countries of shipment, destination, transit and of the vessel’s flag state. Carriers should also be vigilant when accepting cargoes with unusual descriptions and/or trade names.

 

Refrigerated Cargo

The carriage of refrigerated and temperature-controlled cargoes should be effected in specialised refrigerated containers. Pre-trip inspections of refrigerated units are common practice. It is very important to ensure that the container is correctly set to the required temperature upon receipt and that the container is connected to an uninterrupted power supply throughout the time the container is in the custody of the carrier. Regular checks should be made during the voyage to ensure units are operating properly. Any irregularities should be promptly reported and investigated. Some container vessels now come equipped with remote monitoring facilities.

 

Any cargoes which are temperature sensitive (for example, prone to condensation) and not being carried in a temperature-controlled unit should be kept away from any heat sources on the vessel.

 

Checking the Seals

At the time of loading, the containers and their seals should be checked to ensure that they are in good condition, and when facilities and/or time permits, the containers should be weighed and the weight checked against that declared by the shipper. If any suspicion arises during loading that a container does not contain the cargo or quantity declared, it should be returned to the quay and a survey of the contents arranged, ideally under the supervision of the customs. This procedure should be properly logged and if possible photographic evidence of any findings retained. It is also necessary to ensure that the method of sealing complies with special requirements imposed in any port or place to which the vessel is trading (for example, the USA currently requires the use of high security bolts)

 

The importance of a secure seal and a record of the seal number and the condition of the container itself during the various stages of carriage from receipt of the container to delivery at ultimate destination cannot be overemphasized. Every time a container passes from the custody of one carrier or transport intermediary to another, an equipment interchange receipt (EIR) should be carefully completed. This will ensure that there is proper documentary evidence to assist in identifying at which stage in the transportation any loss or damage may have occurred.

 

Whether the container is stuffed by the carrier or received on his behalf already stuffed by the shipper, the carrier or his agents should record the seal number on receipt. If any seal is found to be defective, the contents of the container should be checked and recorded, and a replacement seal applied, ideally under the supervision of the customs.

 

On discharge, seals should be carefully checked to ensure that they remain intact and the result of the check recorded. If a valuable cargo is involved, the unloading or unpacking of the container should preferably be carried out in the presence of a customs officer or other person in authority.

 

If at any time during the period for which the carrier is responsible for the container damage is noted to either the container, the seal, or the cargo stuffed inside, a survey should immediately be arranged with the assistance of the Club's local correspondents. If the survey requires the breaking of seals then on completion of the inspection, care should be taken to ensure that the container is resealed and a record taken of the new seal number.

 

Clausing Bills of Lading

Bills of lading for shipper stuffed containers should always be endorsed to show that the shipper has sealed the container and that the carrier has had no opportunity to inspect the cargo and cannot guarantee its condition or contents. The following or similar words are generally sufficient:

 

"Container received by the carrier stuffed and sealed by the shipper; said by the shipper to contain (details of cargo); weight, condition, quality and contents unknown to the carrier".

 

However note that in the United States Customs will not permit the use of the words “Said to contain” or “stc” in the cargo manifest. There is a risk these words will be transferred over to the manifest if used in bills of lading resulting in problems under the AMS requirements. Language such as “Shippers load, stow & count” should be acceptable.

 

Containers may stand for a considerable time in inland depots or port compounds before and after the actual sea voyage. The carrier may be responsible for containerised cargo before or after sea-carriage, either because he uses depots to consolidate containers for shipment and as a collection point after carriage, or because carriage is undertaken under a combined transport bill of lading. The terminal should have written procedures setting out the documentary requirements that need to be met before cargo delivery occurs. These procedures should be scrupulously adhered to if losses resulting from fraud are to be avoided.

 

Deck Cargo

Because of their construction and design, standard closed containers are better able than most other forms of packing to withstand the rigours of carriage by sea on deck. Consequently, on deck carriage of such containers on purpose built vessels, or those specifically adapted for this purpose, will not usually require the bills of lading for such cargo to be claused to reflect the fact that it is carried on deck. However, this is always provided the bill of lading contains an appropriate clause giving the carrier liberty to carry containers on deck without notice to the shipper. If there is ever any doubt about whether bills of lading for deck cargo should be claused, the Club should always be consulted. This is because Club cover will be affected if it transpires that there is not in fact a liberty under the contract of carriage to carry deck cargo without specifically clausing the bills of lading to that effect. In that situation there will be a deviation under the contract of carriage, and additional insurance will be necessary to cover the potential liabilities that may arise.

 

Further difficulties may arise if the cargo concerned is stowed in or on anything other than a standard closed container – for example an open top container or a flat rack. The protection provided to the cargo by such equipment is considerably less than that given by a closed container. Consequently, on deck carriage exposes the cargo to much greater risk than would be the case if a closed container had been used. Bills of lading should be claused in such cases whether or not there is a liberty clause purporting to allow such stowage. Contact the Club for advice if there is any uncertainty about whether bills of lading should be claused.

 

Secure Stowage

The equipment used to secure and lash containers should be maintained in good order and condition. Stacking cones, twist-locks, bridge fittings, lashing rods etc. should be examined regularly to ensure that they are in a serviceable condition. Any defective items should be segregated to prevent use, and either repaired or replaced. Deck securing points for lashing rods such as D-rings should be checked to ensure that they have not become weakened by corrosion. Details of such checks, maintenance and replacement should be recorded in the vessel’s log since such information will be invaluable in the event it is necessary to establish that proper precautions were taken to avoid the use of defective equipment. The proper stowage and securing of containers on board needs to be carefully controlled to meet any required standards which will take account of, amongst other things, the many stresses to which the containers and vessel are likely to be subjected in the course of a voyage. Individual stack or tier weights, including the distribution of weight within an individual stack or tier, and any transverse restrictions need to be considered.

 

The Evidence Required

In cases of shortage in containerised cargoes, the seal is the most important item of evidence, either to prove short shipment, or to show where the loss occurred through a check on when the seal was last seen intact. However, when containers are carried by multi-modal transport, documentation concerning the seals at each hand-over point during transit is often not readily available. These problems can however be eliminated through the use of properly completed equipment interchange receipts. If cargo damage is caused by defects in or damage to the container itself, documentary evidence covering its condition at each stage of transport is essential to determine which party is responsible for the loss. Other documentary evidence required in particular cases of loss or damage to containers and/or the cargo carried in them is similar to the documentation required for loss or damage to other types of cargo, including contemporaneous log entries, records and statements from those present when the loss or damage occurs and photographs and videos where possible. Refer to the other cargo sections for more details.

 

If a through-transport or multi-modal bill of lading is to be used, the terms of this should be approved by the Club. Members are required to preserve their rights of indemnity against sub-contractors and others who may perform part of the contract of carriage. Correct documentation ensures, so far as possible, that final liability rests with the party actually responsible for the loss or damage, and the Club can assist Members with advice on the documentation involved.