How Does Cargo Get Damaged?

Some damages are unforeseen while others can be prevented by proper handling. Common reasons for freight damage include:

• Reckless driving, rough roads, unpredictable weather conditions, and car incidents can cause mishaps
• Stacking boxes unevenly, placing cargo haphazardly, and not following instructions
• Careless handling
• Poor packaging, incorrect sealing, and improper cushioning
• Uneven weight distribution, excessive cargo weight, and improper handling of oversized cargo
• Negligence by the warehouse or shipper
• Putting cargo at risk due to taking shortcuts to save money and time. This typically occurs when shipping blocks of material, granite, steel, and other heavy items
• Lack of knowledge about the type, dimensions, and weight of cargo to be shipped
• Not inspecting cargo to ensure it is properly secured

Common Cargo-Related Claims

Each year insurance companies get hundreds of thousands of complaints by both shippers and consignees. Physical damage is the most common cargo claim, followed by reefer related, containers lost overboard, theft, wet, shortage, sinking, contamination, and infestation.

Physical Damage

Physical damage typically occurs when items get damaged due to knocking, breakage, rolling, and dropping.

Reefer Related

This typically occurs due to power failure, mishandling, or breakdown of reefer equipment. It can also occur due to not precooling cargo, incorrect setting of temperature, improper packaging, and overloading of cargo.

Infestation

Infestation damage is caused by rodents, animals, or insects in cargo. It can occur when containers from previous cargo are not properly inspected for insects. Infestation can also happen when insects or rodents are transferred from an infested warehouse during the loading of cargo. The presence of a large number of pests can cause disease and damage to containers and cargo itself.

Preventive Measures

When packing cargo for shipping, there are some steps to take to prevent damage:

• Place on cradle, crate, and box heavy items
• Place heavy items at the bottom for maximum stability
• Distribute weight evenly
• Be careful not to exceed maximum weight and dimensions
• Observe packing guidelines for hazardous goods

There are also some measures to observe to prevent reefer related damage, including that containers are cleaned, pre-cooled when required, and set to the correct temperature during transit. Placing containers in open and humid environments should be avoided. When shipping cargo by sea, you should also take some measures to prevent infestation damage. Request that your carrier provides food grade containers when shipping food cargo and ensure it is kept free of rodents and insects during storage.

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Second, the components, parts, and equipment that are damaged often result in wasted time. This is why, carriers need to ensure that tools, equipment, and other cargo are protected from damage, taking into account factors such as handling, humidity, temperature, contamination, vibration, impact, and static charges.

Physical Damage

Physical damage occurs due to breakages, rolling, bumps, dropping, and being knocked. Damages also occur as a result of poorly planned stowage, including lack of proper dunnage and lashing. Poor stowage also includes insufficient, improper, and incorrect lashing, including lack of lashing materials and not enough chocking. Lastly, bad stowage includes improper loading and poor weight distribution which affects stability.

Contamination Damage

Contamination occurs when cargo has been exposed to poisoning or pollution, rendering goods unsafe for operational or industrial usage and human consumption. There are many ways in which cargo can be made impure, including improper storage and exposure to polluting agents, inadequate separation from other types of cargo, poor cleaning after previous shipment, etc.

Infestation Damage

The presence of animals or insects in cargo can cause infestation damage, especially in agricultural products. It can render cargo unsuitable for human usage or cause transit delays due to inspections by the port authorities.

Reefer Damage

Refer related damage typically occurs due to power failure or mishandling of equipment. Damage includes discoloration of products, off-size, bruising, over-ripening, thawing, and decay. Common causes include poor air circulation, improper stowage, unintentional human error, and inadequate temperature controls during refrigeration transport services.

Water Damage

Damage can occur when goods are exposed to seawater regress, wet conditions, humidity, and water. Ships sail through different climatic zones, including more humid climates. Moisture can cause “container rain” when condensing into droplets within the containers. This can result in corrosion and rusting under certain circumstances. Corrosion can be caused due to flooded ship holds, holes in the containers, damaged sealing gaskets, and lack of proper desiccants.

How to Prevent Cargo Damage

Importers, manufacturers, shippers, and freight forwarders should take measures to minimize the risk of damage and associated operational and financial losses. To restrict movement and protect cargo, it is important to use the proper dunnage material and lashings. Also, frozen cargo should be inspected for flavor and color changes, black spots, odor, fluid migration, desiccation, and dehydration.

Carriers need to ensure proper temperature controls and a valid inspection certificate when shipping reefer containers. The distribution of weight and stowage of cargo in containers should be well planned. Lastly, when transporting goods that are susceptible to water damage, it is important that carriers choose the correct route and seal all doors of the containers.

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Ammonia

Ammonia, which releases no carbon dioxide when burned, is a compound of hydrogen and nitrogen. It is considered one of the best options for international journeys over long distances, especially for container ships. What is more, ships can carry more fuel onboard compared to hydrogen.

While it is already used in agriculture as a fertilizer, production requires energy-intensive technologies that generate significant amounts of carbon dioxide. It also generates poisonous gasses (nitrogen oxide), and vessels using ammonia need to be equipped with a selective catalytic reduction system. SCRs are used to convert emissions into nitrogen and water vapor, thus reducing the level of nitrogen oxide.

Also, ammonia is highly toxic compared to other fuels, and the shipping industry needs to adopt strict safeguarding protocols to ensure safety and environmental protection.

Methanol

Methanol is an alternative to polluting diesel which can be produced from biofuels and renewable energy. According to experts, the cost of retrofitting commercial ships and building new ones is lower compared to other fuels. A further benefit is that it doesn’t have to be stored at extreme temperatures or under pressure. Methanol is safer and easier to store and can help carriers reach carbon targets.

Some carriers are already investing into using ammonia and methanol because there are no better alternatives for sea freight in Europe. Dual-fuel engines that use traditional fuels and methanol are favored by carriers, however, because methanol cannot be produced at scale at present. There are 55 dual-fuel engines currently on order and in operation, and all the major engine manufacturers have introduced methanol in their product lines. The immediate benefits are reducing nitrogen oxide by 80 percent, particulate matter by 95 percent, and sulfur dioxide by 99 percent.

According to experts, ammonia will also have a major role to play, provided that safety risks can be mitigated. A recent report highlights the fact that ammonia and methanol are best suited for long-haul journeys when used in the form of e-fuels and advanced biofuels. E-methanol and bio-methanol not only help reduce carbon emissions but require no or little engine upgrading. E-methanol is favored by freight forwarders but there are some challenges to large-scale production, including the cost and availability of captured carbon.

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Why Port Congestions Occur

In such numbers, it takes weeks before cargo vessels get a berth and weeks before they get unloaded for trucks to reach warehouses for storage and distribution. It is months before the empty containers are loaded on a cargo ship again.

Before the pandemic, a ship would unload cargo, reload empty containers, and sail to the next port of call. Cargo would be promptly shipped by truck to its final destination. Now there is delay at every stage of the supply chain. To make matters worse, ships lack space for empty boxes, resulting in containers being stuck at transshipment facilities, ports, and depots. This has already created container shortages in India and China.

Way out of the Crisis?

Port executives and shipping experts warn that the container crisis will take another year to end, despite the fact that major carriers have ordered new cargo ships and containers. The problem is that augmenting stock will not end the crisis in India and other parts of the world. There are disruptions throughout the entire supply chain, trade flow imbalances, reduction of slots on cargo vessels, and shortages of truck drivers. Some commercial vessels are also undergoing repairs and refurbishment.

The current crisis started when consumers began spending their extra pandemic savings on consumer goods from online platforms. The fiscal stimulus significantly increased demand and consumption, with spending shifting from travel and services to consumer goods. Most of the items ordered had to be transported in containers from South-East Asia.

The crisis escalated when western countries began stocking up before the Christmas holidays. Carriers faced increased pressure when manufacturers restated production and ordering parts and raw materials. According to experts, the crisis will not end before the underlying causes are dealt with. Empty containers need to be shipped back to exporting countries from ports and inland depots in Europe and the US. Additionally, containers now have many other uses than shipping goods. They are used to build both high-end modular homes and makeshift prisons, clinics, restaurants, and schools. Containers are also transformed into temporary housing for homeless persons and multifamily apartments. The fact is that transporting empty boxes and getting them reloaded on ships is less profitable.

Shortages of truck drivers and port workers also contribute to the piling of empty and loaded containers at depots, warehouses, and ports. To ease the crisis, workforce shortages need to be addressed at every stage of the supply chain.

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Long waiting times at airports forced airlines to charge extra for container shipping which also contributed to rate hikes.

Why Rates Soared

This is due to global supply chain disruptions causing the cost of a 40-foot container to increase to over $9,000, up from $2,000. According to consultancy SeaIntelligence expert Lars Jensen, it is companies fighting for containers that is driving rates up, turning them into a limited resource. Shipping lines cancelled many trips due to restrictions on movement and lockdowns in the first half of 2020, leaving thousands of containers lying idle in the U.S. and Europe. This resulted in an abrupt slowdown in trade across the world. When demand for commodities produced in Asia increased in the second half of 2020, forwarders were forced to compete for containers, resulting in significant rate increases.

At the end of 2020, higher volumes of containers shipped along trans-Pacific routes caused rates to further increase. According to industry experts, some companies were paying $12,000 per container transported from China to Europe. In some areas rates increased up to 300 percent, resulting in hikes in commodity prices.

Container shortages are not limited to Europe, however. Cargo owners complain that forwarders are shipping higher volumes to Vietnam and China, resulting in significant container shortages in Thailand. The government already announced plans to subsidize import duties over a period of up to 6 months. According to shipping expert Ghanyapad Tantipipatpong, Vietnam and China are in a position to accept higher shipping rates because they have competitive advantages.

This is why they get more containers and enjoy more space allocation. Transpacific shipping rates have almost tripled in just 1 year, reaching $4,000 in November 2020. Increased demand for cargo shipped along trans-Pacific routes has affected other industries as well. Business planning is increasingly difficult due to cancellations, rollovers, and delays in transportation. One solution that has been proposed is to reduce handling charges as a stimulus for freight forwarders to ship more empty containers.

Supply Chain Disruption

Economists warn that shipping delays and disruptions are starting to affect global supply. Chief economist at Capital Economics Neil Shearing notes that there are signs of pressure intensifying. Many freight forwarders report significant delivery delays causing shortage of goods.

A survey by IHS Markit reveals that manufacturers saw a shortage of semi-manufactured products and raw materials, with hikes in input prices and low inventories. Senior economist at ING Bert Colijn points to the fact that hikes in shipping rates and supply shortages are expected to cause higher inflation in the short term. While forwarders have already placed orders for containers in an attempt to deal with the issue, shortages are likely to persist throughout 2021. Prices are expected to drop but huge volumes of cargo are still stranded and waiting to be shipped.

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Even a seemingly small error while filling in paperwork can cause significant shipping delays, thus disrupting the supply chain. 

Bill of Lading

This is a type of freight document that works as a contract between the cargo owner and shipper. The exporter and importer details must be filled in, including information such as number of packages, list of goods, dates of arrival and departure, ports of destination and departure, and consignee and consignor names. Additional details to include are freight amount and rate, volume and weight of cargo, and number and marks on the packages.

Packing List

This is another document for freight forwarders to bring when shipping cargo by ocean freight. Basically, it includes detailed information about the merchandise being shipped such as value, volume, and weight.

Commercial Invoice

All transactions that involve exporting or importing must be accompanied by a commercial invoice which is a form of proof of sale. While it looks like standard invoices, shippers must also include information such as shipping line, financial institution, forwarder, and exporter and importer. The types of details to include in a commercial invoice are:

• Number of units or items
• Country or territory of origin
• Description of the items being sold
• Purpose and name of items
• Export reason
• Terms of sale
• Consignee name
• Shipper name

Reasons to use a commercial invoice include easy tracking of the whereabouts of cargo and reduced shipping delays.

Certificate of Origin

This is a trade document to acknowledge that the cargo shipped is processed, manufactured, and obtained in a particular country. It is an international freight forwarding document that must be submitted by a manufacturer or exporter and certified by a consulate or chamber of commerce.  The two main varieties are preferential and non-preferential, with the latter referring to cargo shipped from a country where preferential tax treatment does not apply. Details to include in the certificate of origin include numbers and marks, number of crates, boxes, or packages, net and gross weight, and description of goods.

As there are different international agreements and regimes, there are also different types of certificates of origin. Non-preferential ones are usually the same but preferential certificates vary from one country to another. All forms, however, include basic details such as consignee and shipper name and address, product quantity and description, and transport details. Two formats are available – electronic and paper-based.

Letter of Credit

This is a type of an agreement between a seller and а buyer whereby payment is made after the terms and conditions specified by the importer have been satisfied. Once merchandise has been shipped, the seller presents the required documents to the bank as proof that the cargo has been transported as agreed. This is one of the safest methods to ship and pay when making international purchases.

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While the guidelines are not binding, the methods and principles outlined there are intended to improve safety in transport operations by road.

 Securing Cargo

The guidelines offer instructions and advice to freight forwarders and carriers regarding the securing, unloading, and loading of cargo. To ensure safety during shipping, cargo must be secured as to prevent rotation, serious deformation, wandering, rolling, tipping, or sliding. Methods that can be used include lashing, blocking, locking, or combinations of the three methods. The safety of all persons involved in transporting, unloading, and loading is a prime consideration as well as that of pedestrians, other road users, the vehicle, and load.

Applicable Standards

Specific standards that have been incorporated in the guidelines concern the materials for securing, securing arrangements, and the performance and strength of superstructures. Applicable standards include:

• Transport Packaging
• Poles – Sanctions
• Tarpaulins
• Swap bodies
• ISO container
• Lashing and wire ropes
• Lashing chains
• Web lashings made from man-made fibres
• Strength of vehicle body structure
• Lashing points
• Calculation of lashing forces

Transport Planning

The parties involved in transport planning must provide description of the cargo, including details such as limitations for orientation and stacking, enveloping dimensions, positioning of the center of gravity, and mass of load. Operators must also ensure that dangerous cargo is accompanied by supporting documentation that is signed and completed. Dangerous items must be labelled, packed, and classified accordingly.

Loading

Only cargo that can be safely transported is loaded provided that a load securing plan is followed. Carriers must also ensure that the required equipment is properly used, including blocking bars, dunnage and stuffing materials, and anti-slip mats. With regard to cargo securing arrangements, several factors must be taken into account, including test methods, safety factors, friction factors, and accelerations. The latter parameters are examined in detail in European Standard EN 12195-1. Securing arrangements must also comply with the Quick Lashing Guide as to prevent tipping and sliding during shipping. Cargo can be secured through blocking or positioning the goods to the walls, supports, stanchions, sideboards, or headboard. Void spaces must be kept to a minimum for store, concrete, steel, and other rigid or dense cargo types.

Guidelines for Road and Sea Transport

Other regulations and codes may apply to intermodal logistics and transport, including the Code of Practice for Packing of Cargo Transport Units. Also referred as the CTU Code, it is a joint publication released by the United Nations Economic Commission for Europe, International Labor Organization, and International Maritime Organization. The code examines practices for packing and shipping of containers moved by land or sea. The guidelines include chapters on the packaging of hazardous goods, packaging cargo of CTUs, positioning, checking, and arrival of cargo transport units, and CTU sustainability. There are also chapters on CTU properties, general transport conditions, and chains of responsibility and information.

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Infrastructure and Track Inspections

Multiple studies have shown that broken welds and rails are the main culprits for derailment and fatal accidents. Track geometry, including elevation, gauge, and alignment also lead to train derailments. To overcome this problem, operators now use geometry vehicles to perform inspections. Some carriers also use ground-penetrating radars and ultrasonic systems to identify defects.Risk Assessment

Risk assessment also helps improve rail safety and includes measures such as assessment of track quality, train routing, and speed as well as defect inspection. Carriers also use integrated frameworks to monitor reliability, resource usage, and capacity and thus assess safety and financial risks associated with the shipping of hazardous goods. The framework focuses on railcar design, physical infrastructure, routing, and operating practices for improved safety.

Models of integrated communication and signaling aim to enhance the transfer of information between control centres and trains. Integrated frameworks operate at three levels, bottom, middle, and top level. The middle level establishes set-points for trains to drive while the bottom level is responsible for energy control. The top level develops real-time operation plans and scheduling for trains to keep safe distances.

Braking Systems

Given that trains carry oversized cargo, braking systems such as electronically controlled pneumonic brakes can be used to distribute power throughout the center, rear, and front of the train. Positive train control is also used to stop or reduce speed and prevent accidents due to derailment or collision. They often occur as a result of missing signals or driving at high speed. Positive train control helps monitor movements to prevent accidents such as unauthorized train entry, malfunctioning of track switches, and derailment due to high speed. The system cannot be used to prevent accidents that occur as a result of malfunctioning equipment. Positive train control is mainly used to collect real-time information about rail track conditions, speed limits, and movement authority limits. It can be installed on freight, commuter, and passenger trains to improve efficiency and safety. The main components include advanced software, base stations, antennae, cellular technology, radios, Wi-Fi, and GPS that help stop or reduce speed.

Condition Monitoring Technologies

Detectors placed at various locations along the route help monitor the performance of freight cars and locomotives. They are equipped with components such as load impact sensors, machine vision systems, laser systems, acoustic bearing detectors, and infrared temperature sensors. Laser systems are used to detect worn and defect wheels and to check wheel profiles. Machine vision systems are also used to identify missing and broken safety systems, structural defects, and low air-hoses. Acoustic bearing detectors are installed to monitor for rolling-element bearings that are worn out while temperature sensors direct infrared energy beams to detect overheated bearings and wheels.

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Air Cargo

Airlines are increasingly transforming their fleets into cargo planes, shipping medical equipment, supplies, and medications. Those shipping cargo from affected areas are asked to follow WHO guidelines as to prevent further spread. Special handling is not necessary but workers must wash their hands frequently and maintain good hand hygiene. IATA advocates the view that cargo crew must be exempt from quarantine and travel regulations.

Land Transport

Measures have also been implemented to ensure that essential cargo keeps moving, including essential goods and medical supplies. However, Member States have also introduced border controls and other restrictions to prevent further spread. In Austria, for example, operating staff and drivers are asked to undergo medical examination, and limited relaxation of rest and driving times has been enforced. In Croatia, limited relaxation applies to freight forwarders that are shipping equipment to institutions and hospitals and are transporting raw materials, fuels, foods, and other essential products.

Temporary and limited relaxation has also been implemented in the United Kingdom with regard to the transportation of over the counter pharmaceuticals, cleaning supplies, household paper, personal care products, and food products. Limited relaxation has also been granted in Wales, Scotland, and England and applies to drivers shipping goods. In Northern Ireland, the Department for Infrastructure has granted limited and temporary relaxation with regard to driving hours rules. This applies to drivers that are shipping solid and oil fuel to domestic, commercial, and agricultural customers, including airports, landfill sites, and hospitals.

The relaxation of rest and driving times has been granted in compliance with Art. 14 (2) of Regulation (EC) No 561/2006. Temporary and compete tolerance has been enforced in Belgium with regard to the shipping of essential goods to pharmacies and shops, including medications and food. Limited and temporary relaxation has been enforced in different countries across the EU, including Spain, Slovenia, Slovakia, and others.

In Austria, there are border controls, and the activities and temperature of drivers are systematically checked. Heavy goods vehicles are temporarily exempt from the weekend traffic ban. In Bulgaria, truck drivers are subject to a mandatory quarantine for a period of 14 days. Non-Bulgarian drivers are permitted to unload and load cargo but they should leave the country within 24 hours. The maximum driving limit has been extended to 11 hours a day.

The rest period has been reduced to 24 hours per week to help avoid delays. In Belgium, the mandatory 14-day quarantine period applies to drivers from Sweden, the Netherlands, the UK, Austria, Spain, Switzerland, France, Germany, Iran, Bahrain, Malaysia, and other countries. Only drivers in transit are exempt. While Germany has also introduced border controls, truck drivers that are shipping cargo are eligible to receive up to 1,500 EUR tax-free bonuses.

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Why Green Lanes?

Land cargo makes for some 75 percent of all cargo shipped across borders. However, cargo shipping has been seriously affected by restrictions imposed by Member States, including restrictions on truck drivers and bans at border crossings. Many vehicle drivers face wait times of over 48 hours, including trucks shipping medical supplies.How It Works

For vehicles that are shipping cargo to institutions, retailers, or warehouses for distribution, it must not take more than fifteen minutes to cross borders. This includes measures such as temperature taking, health screening, and other checks.

The goal is to ensure that all countries have a coordinated, collective, and efficient approach to shipping during the coronavirus outbreak. EU Member States are asked to streamline their procedures at border crossings in order to ensure effective supply chain management. Drivers carrying cargo will only be subject to minimal checks such as presenting their driving license and identification.

In some cases, they may be also asked to show a letter from their employer. Staff at border crossings will also accept documents that are submitted online. The Commission also asked Member States to lift restrictions, including sectoral, night, and weekend bans as to ensure that cargo keeps moving.

Private vehicles should also be allowed to cross borders so that transport and health officials safely reach designated destinations. The same applies to citizens who wish to be repatriated.

Transport Workers

The European Commission also asked Member States not to impose restrictions on drivers showing no symptoms, including mandatory quarantines that have been imposed in some countries. Drivers transporting cargo should not be asked to show a doctor’s certificate at border crossings. At the same time, safety measures should be implemented to protect the health of transport staff at railway stations, ports, airports, and other crossings.

These include operational and hygiene measures. Safety measures include disinfection of truck cabins, wearing protective equipment when necessary, and producing digital documents. Employers are asked to supply soaps and disinfecting and sanitizing gels to enable drivers to maintain good hand hygiene. Disinfectants should be used whenever documents are exchanged. Drivers are encouraged to avoid interactions and practice distancing unless necessary, including during rest periods and breaks.

Certificate for International Transport Workers

During emergencies, transport workers should carry a certificate for international transport workers. The certificate must include the residence, birthdate, and name of transport workers, specifying whether they are road administration crew, vessel crew member, ship’s captain, carriage inspector, or train crew. Certificates must also be presented by train drivers, aircraft crew, bus drivers, and heavy goods vehicles drivers. They must display the signature and name of the organization, company, or office as well as the place and date of submission.

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