Wednesday, December 19, 2012

International Container Shipping Group Monitors Cargo Incidents with Surprising Results

Incorrect Freight Declaration Rife with the Potential to Cause More Disaster
Shipping News Feature

WORLDWIDE – In 2010 five of the world’s major container shipping lines got together to form the Cargo Incident Notification System (CINS) and funded a procedure whereby information regarding the type of incident, i.e. any dangerous or potentially dangerous occurrence, could be recorded and shared thus increasing the safety of the supply chain.

Initially the scheme was aimed at hazardous goods but since it has been expanded to cover any miscellaneous box based risk to the health and well being of any participant in the supply chain or otherwise. The original members Maersk, MSC, CMA-CGM, Hapag Lloyd and Evergreen solicited advice from industry experts such as the TT Club and International Group of P&I Clubs with a view to revising the practices both of the container carriers and those responsible for loading them.

Before the meteoric rise of box traffic all stowage was in the holds of vessels with much of the more dangerous and bulky cargo loaded on deck, and always by professional dockworkers and stevedores. Now a myriad products are stowed into containers, sometimes hundreds of miles from a loading port and often by ill trained staff meaning the dangers from end heavy loads and insufficient packing and dunnage remain hidden from view and only become apparent when something untoward occurs, often with tragic consequences.

These days of course collection and collation of information is fraught with peril in many countries and by the very nature of international shipping the risk of prosecution by anti trust authorities for assimilating and publishing such data could potentially be disastrous for those concerned. This work however has the potential to save lives and so the CINS Organisation, with a database hosted by the UK headquartered Container Owners' Association (COA), is committed to comply with the US Sherman Act, Article 101 and 102 of EU treaty plus any other similar competition and data protection legislation and therefore a veil of secrecy is cast over any information gleaned and recorded whilst specific shipper details are excluded as a matter of course.

The information gathered provides an early warning of worrying trends, whether relating to cargoes that display dangerous characteristics, but have not yet been recognised as such in the IMDG Code, or continuing or emerging unsafe practices in the unit load industry. At the heart of this initiative is a quest for quality – both in terms of pure service delivery, ensuring the cargo arrives in sound condition on time, and also improving the way in which all parties in the supply chain carry out their obligations and communicate.

The incident data captured since launch is now lending weight to – and to some extent challenging assumptions from – the anecdotal evidence from previous years. The records include the nature of the cargo concerned and its packaging, together with details of the routing, and then information on the type of incident and the root cause. The TT Club, as a key insurer for the transport industry, and advisory members of the CINS committee, undertook analysis of the data on behalf of CINS.

CINS has now released figures showing the results they have obtained and some of these are somewhat surprising. The chart shown illustrates an overall division of where cargo involved in incidents actually emanated from and the CINS members admit they believed, somewhat justifiably, that freight loading in Europe and North America (shown in light blue and black) would not have been involved in anything like the 31% of incidents it accounted for believing that packing controls in these regions would be considered as more ‘mature’.

In fact it would seem that practice makes perfect with the huge volumes of goods emanating from the whole of Asia only accounting for 36% of recorded incidents (including China's 16% contribution). As might be expected two thirds of occurrences involved dangerous goods with leakage accounting for over half the reports and of all the incidents reported by number 8% involved fire or explosion.

So what has this very useful garnering of information concluded after its first two years of operation? With poor packing accounting for 40% of the incidents (80% of these were for hazardous goods) and incorrect packing another 10% it is clear that shippers need education and to invest in proper packing and loading facilities and materials. Doubtless, despite the anonymity so carefully guarded by the CINS members they have taken steps to make those responsible aware of their liabilities in no uncertain terms. The threat of the withdrawal of insurance cover could spell the end of exports for any manufacturer or producer.

One of the most unnerving figures released is what is known in the trade as the ‘Iceberg’ risk factor, the vital pieces of information not revealed to the container carrier. One immediately thinks of weights being under declared but in fact in not one of the cases was this a factor. The chilling statistics is that 21% of incidents by potential cause it was mis-declaration of the goods by shippers or agents, and most often this involved dangerous goods – remember these are only the ones which resulted in incidents, surely pointing toward a deep seated problem with potentially disastrous consequences.

As investigators continue to sift for evidence on board MSC Flaminia, the fears of the liner industry that the nature of cargo carried is largely unknown are here shown to be reasonable. It is findings like this that display the potential for the CINS Organisation to have cogent dialogue with enforcement agencies, competent authorities and the IMO in order to lead to and support relevant changes in legislation or other safe practice recommendations.

Chairmanship of CINS will now pass from founding member Dirk Vande Velde of MSC in a planned two year rotation and the new man will be Reinhard Schwede of Hapag-Lloyd. Unfortunately there looks to be a bright future for CINS whose services will be need for the foreseeable future and whilst certain bulk freight groups and RoRo ferry companies have previously expressed interest in membership the current set up has enough on its plate if it is to clean up an industry which, if not controlled with suitable vigilance and swingeing penalties for offending shippers, has the potential to cause untold harm to innocent individuals and the environment.

With the new influx of carriers CINS members now account for over 52% of global container slot capacity and the organisation is now open to membership by any shipowners worldwide.