Archives for July 2022

Past reporting of inspections carried out has been sparse.  In welcoming the IMO’s revised guidelines for inspections, the international freight transport insurer TT Club exhorts governments to report findings to IMO on 2021 inspections, as well as to increase the volume of inspections carried out.  This would helpfully inform the international maritime regulator and support industry players who are striving to ensure safety and reduce dangerous incidents.

Revised Guidelines for the Implementation of the Inspection of Cargo Transport Units (CTUs)* issued last month by the IMO are aimed at helping governments to implement a uniform and safe inspection programme.  The IMO Circular (MSC.1/Circ.1649) seeks to broaden the inspections undertaken and align fully with safety guidance developed during the last decade (previous guidelines date from 2012).

Specifically, governments are now requested to select from all cargo types, rather than simply declared dangerous goods, for inspection. Further the guidance takes account of the issuance of the CTU Code¹, revisions of container safety regulations and the need to minimise the movement of invasive pests. The Circular additionally notes the continuing low rate submission of inspection reports and encourages an increase in such inspections.

Peregrine Storrs-Fox is TT’s Risk Management Director, “With the string of container ship fire casualties and fatal incidents at storage facilities, most recently at Chittagong (Chattogram), in our minds, our current concerns are manifest. They constantly remind us of the importance of adequate safety procedures in packing, handling and transporting the array of cargoes that have the potential to cause catastrophic incidents,” he states.

“With only five of the 179 governments affiliated with IMO submitting reports on inspections at the last Carriage of Cargoes and Containers (CCC) sub-committee meeting in September 2021, the industry urgently seeks more collaborative support from governments in combatting the potential circumstances and cargo packing practices that cause dangerous incidents.  It would be much appreciated if more national reports undertaken during 2021 can still be reported for consideration at the next CCC this September.  However, TT calls for a viable sample of inspections in future based on the new guidelines. In this regard, TT would urge strongly that governments enter dialogue with industry to understand how the latter can work with enforcement agencies to improve safety.”

TT itself has long campaigned for an increased awareness of the issues surrounding the transport of dangerous goods, and all potentially hazardous cargoes.  It is dedicated to improving standards for the safe and secure packing of all cargoes in cargo transport units.

There is a plethora of industry generated guidance on best practice relating to packing and handling of cargoes, including the Quick Guide to the CTU Code, along with a Checklist of actions required of those packing cargo in freight containers, published by the Cargo Integrity Group and available in several languages².

Such work by industry groups can only be strengthened by a partnership with governments.  Their action on inspections, with the help of the new revisions to the IMO guidelines and use of that body’s reporting system is crucial.

Storrs-Fox concludes, “The international supply chains that service the trade in a myriad of commodities are complex and notoriously susceptible to disruption.  Congestion and delays increase the challenges involved in maintaining safety levels in an environment where the demand for reliable delivery of goods is high.  Such circumstances require an even higher level of attention to safe practices.  The collection of information on the effective use and/or mis-use of these practices needs to be enhanced by a much higher level of rigorous inspections and report submissions from governments, but working from the understanding that this is a shared problem.”

*https://www.ttclub.com/media/files/tt-club/msc.1-circ.1649-guidelines-for-the-implementation-of-the-inspection-programmes-for-cargo-transport-units.pdf

¹ IMO/ILO/UNECE Code of practice for packing cargo transport units (CTU Code) https://unece.org/fileadmin/DAM/trans/doc/2014/itc/id_07_CTU_Code_January_2014.pdf

² https:/ /www.ttclub.com/news-and-resources/publications/ctu-code-a-quick-guide

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 97% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more.

https://www.ttclub.com

Disruptive economic, societal and geopolitical influences are altering global supply chain risk profiles. Erosion of traditional buffer mechanisms to ensure continual supply of goods demands a new assessment of potential risks

The challenges inherent in today’s international trade and the supply chains that service it are painfully obvious – higher prices of energy and food, shortages of and delays in delivering manufactured goods, dynamic changes in markets and sourcing regions. The on-going effects of the pandemic, with its associated lockdowns and the war in Ukraine are proving catalysts to ignite underlying economic and environmental trends that will continue to fuel long-term changes in the pattern of global supply and demand.

As a specialist in providing insurance and risk management services to the international transport and logistics industry, TT Club is convinced that a thorough understanding of the practical risks is vital in mitigating the dangers to safety and security that are a consequence of these dynamic factors.

“We are suffering from a disappearing ability to absorb short-term shocks to the supply chain because of fundamental societal and geopolitical changes to the global equilibrium,” commented Dorota Jilli, a Senior Underwriter at TT speaking at the Annual Conference of the European Sea Ports Organisation (ESPO) in Valencia this month. “Yes, Covid and the war are disruptive and are driving up prices but the longer-term trends of production cost increases in Asia and stricter demands of ESG* mean that cheaper goods and transport services are features of a past global economy.”

In her presentation, Jilli explained in detail some of the prevalent risks that operators face in this changed environment. Abandoned cargo is more prevalent with delays through port congestion and lockdown closures meaning the incidence of consignee bankruptcy or goods being unwanted due to loss of markets is higher. This is particularly concerning when dangerous good are left in storage for excessive periods as the tragic incidents in Beirut last year and in Chittagong more recently attest.

“Trends in cargo theft are also in flux with more essential goods such as food and beverages being targeted and luxury goods and electronics not so much as in the past,” commented Jilli. “Cargo at rest, either at ports or inland staging areas, some of which have been hurriedly pressed into service as overflow facilities, is increasingly subject to theft. With shippers looking for ‘workarounds’ to reduce costs or avoid congestion, thieves have been quick to adapt their methodologies and the use of online means of deception and insider recruitment are now both more common.”

TT sees the correct use of data to analyse these trends as being of crucial importance and is utilising its own claims experience along with theft reporting agency information to maintain and expand the all-important industry awareness of the evolving dangers. This, in addition to the developing technologies to support the supply chain and offer predictable and resilient sourcing without the geopolitical risks of foreign suppliers and other disruptions, is seen as a primary mitigator in the management of the developing, modern, longer-term risk profile.

Jilli concluded, offering wise advice to those operating in today’s – and tomorrow’s – global supply chain, “It is important to ensure that adequate risk assessments are undertaken across the full breadth of your operation in order to understand thoroughly the various risks and, where appropriate develop mitigating actions and controls, together with effective continuity plans to protect your business.”

*Environmental, Social and Governance

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 97% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more.

www.ttclub.com