Archives for August 2024

Prompted by the recent spate of container ship fires, international freight and logistics insurance provider TT Club has stressed the greater need for all players in the global supply chain to recognise their responsibility for accurate and effective communication between all parties for the transport of dangerous goods.

The occurrence of four major incidents aboard container ships, two in port and another two at sea within the last four months has prompted TT to reiterate its long standing fervent message for shippers and those facilitating the supply chain to be more diligent over how their cargoes are classified, packaged, packed, declared and handled.

The sad list of both explosions and fires extends from ‘Northern Juvenile’ in the South China Sea in May, to ‘Maersk Frankfurt’ in the Indian Ocean to more recent incidents in quick succession, which involved ‘MSC Cape Town III’ in Colombo and ‘YM Mobility’ in Ningbo.  “The causes remain under investigation,” says TT’s Peregrine Storrs-Fox. “However, there are strong indications that potentially explosive chemicals and fire accelerators, such as lithium-ion batteries, may be involved in at least two of the cases.  As with historic incidents, it is likely that various errors occurred as the shipments were initiated and the exact nature of the cargoes was communicated to supply chain counterparties, giving rise again to ‘perfect storms’.  Every participant in the process needs to act in the best interests of safety at every point in these cargoes’ journeys.”

This spike in serious container ship fires is reminiscent of the spate in 2019, although the 30 year average frequency may remain one every 60 days – but any life-threatening event is one too many. Of the recent four, unusually two took place while the ship was berthed and shore-side emergency services responded quickly to minimise damage and loss of life – although pollution and potential berth blockage risks emerged.  When incidents occur at sea much more serious consequences can develop, as exemplified by ‘Maersk Frankfurt’, where one crewman lost his life, the fire burnt for several days and the ship remains with salvors at sea.

The exact number of containers carrying dangerous goods that are shipped annually is difficult to estimate due to mis- and non-declaration. Partly in response to the issues around inaccurate declaration, the IMO amended the ‘Guidelines for the implementation of the inspection programmes for cargo transport units’^[1] in 2022 to urge governments to inspect all types of unit, regardless of the declared cargo. The recently released consolidated results, from just eight countries (or 5% of the signatory states), for 2023 evidence continuing safety concerns.

Although, from the minute sample size of about 0.03% of containerised traffic, ‘placarding and marking’ shows some improvement, this deficiency, being for first visual alert for many stakeholders and particularly emergency responders, remains stubbornly above 40%. Further, reports noting deficiencies in ‘Stowage and Securing’ (within units) – a core CTU Code issue – indicates a rapidly worsening trend over the last five years and the worst position since reports began in 2001. Also of note is the five year worsening trend relating to errors found in documentation, another key risk indicator. Care of every shipment requires good communication along the supply chain, due diligence undertaken by every player and a culture of ‘know your customer and operating partner’.

“In this regard, we applaud the recent statement by China’s Maritime Safety Administration (MSA) that underlined shippers’ responsibilities, in addition to those of the carriers’^[2]. Such warnings and encouragements by regulatory authorities are to be welcomed. However, TT would reiterate the statement that regulations merely set the baseline,” concluded TT’s Storrs-Fox

ENDS

^[1] MSC.1/Circ.1649

² Quote from the MSA statement as per a translation provided by Lloyd’s List.

Shippers are required to take safety measures including proper packaging and temperature control, and promptly notify carriers of correct dangerous goods names, quantities, hazards, emergency temperatures (if needed), and emergency response measures.

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, more secure, and more sustainable. Founded in 1968, the Club has more than 1500 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

[1] MSC.1/Circ.1649

[2] Quote from the MSA statement as per a translation provided by Lloyd’s List.

Shippers are required to take safety measures including proper packaging and temperature control, and promptly notify carriers of correct dangerous goods names, quantities, hazards, emergency temperatures (if needed), and emergency response measures.

While the volumes of containers lost at sea fluctuates year on year, typically influenced by the more severe of weather conditions, the challenge is persistent.  International freight insurer TT Club stands with the container industry in seeking to preclude these losses.

Understanding the circumstances that lead to stack collapse and losses overboard incidents is of course vital in mitigating the risk. TT applauds the World Shipping Council initiative to publish the details of the annual survey^[1] into container loss and recognises the lowest level of recorded losses during 2023, including the important fact that around 33% of units initially lost are subsequently recovered.

Nevertheless, TT’s own analysis of historic incidents clearly shows that weather is the single most influential factor. Furthermore, the data demonstrate that this is far more complex a challenge, involving a wide range of interconnected operations.

“In this context TT has been involved from conception with the MARIN^[2] TopTier Joint Industry Project,” emphasises TT’s Peregrine Storrs-Fox.  “This on-going project has drawn together over forty industry and governmental stakeholders in identifying and resolving the circumstances that lead to such incidents. It has already delivered important guidance relating to mitigating parametric roll risks and the Club will continue to be involved in the debates, particularly at the IMO, following the finalisation of the research.”

While focus is, not wholly unreasonably, mostly on ship operations, TT has long recognised that all participants in the freight supply chain carry responsibility. When the transport order is initially placed the accuracy of the verified gross mass (VGM) is pivotal, as is the correct load distribution and securing when packing cargo into the container. Consequently, TT’s cargo integrity campaign remains central to its work[, alongside partners in the Cargo Integrity Group].

At the ship/port interface, the terminal operating system (TOS) must support the appropriate stowage on board the ship, alongside stow planning software.  These systems need to plan heavier containers lower in any given deck stack.  Storrs-Fox comments, “TopTier studies have identified discrepancies up to 20% between planned stow versus the actual final stow on board. If representative of all operations, this is itself alarming.”

As to environmental factors, TT’s analyses identified potential commonalities across several incidents.  Wave height was amongst the more obvious attributes, but wave length and period appeared to be of even greater importance. Indeed, it was recognised that wave period is responsible for resonant phenomena, such as parametric roll and synchronous rolling, that can give rise to stow collapses and losses overboard.

Through its Innovation in Safety award, TT has also been searching for developing technological solutions.  The two complementary digital and engineering solutions, both developed by Trendsetter Vulcan Offshore (TVO), apply well-established systems from the offshore industry, firstly to enhance monitoring capabilities, predicting and detecting parametric roll, and secondly fundamentally re-imagine lashing systems to reduce container motion and control the dynamics of container stacks.

Conventional wisdom remains that heavy storms should be avoided where possible to minimise the risk of container loss. Re-routing away from the Red Sea this year has exposed many voyages to extreme weather off southern Africa. Nevertheless, deployment of innovative technology can assist in building greater safety margins, including leveraging data capture to improve understanding and predictions of changing sea conditions.

“Ships will never be able to avoid the impact of heavy seas entirely,” concludes Storrs-Fox.  “Consequently TT, in furtherance of its mission to make the global logistics industry safer, more secure and more sustainable, continues with its efforts on this issue and urges industry colleagues to do likewise.” 

ENDS

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. The Club’s services include specialist underwriting, claims management and risk and loss management advice, supported by a global office network. TT Club’s mission is to make the industry safer, more secure and more sustainable. 

Established in 1968, TT Club currently services more than 1400 Members – container owners, operators, ports, terminals and logistics companies. Its membership covers the entire logistics journey, working across maritime, road, rail, and air ranging from some of the world’s largest logistics operators to smaller, bespoke companies managing similar risks. The Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. Its average annual customer retention rate is consistently over 95%, with some Members having chosen to insure with the Club for over 50 years. 

TT Club is managed by Thomas Miller – an independent and international provider of insurance, professional and investment services.

www.ttclub.com

[1] https://www.worldshipping.org/news/world-shipping-council-releases-containers-lost-at-sea-report-2024-update

[2] Marine Research Institute Netherlands

Though not a robust deterrent to determined thieves the humble seal plays a central role in identifying location, method and often perpetrators of cargo theft. Freight insurance specialist TT Club argues for greater emphasis on the container seal as part of a stronger security culture across the supply chain

Loss due to theft is among the top three causes of claims received on an annual basis by the international freight and logistics insurance specialist, TT Club. Identification of trends, spikes and hot spots surrounding this aspect of supply chain crime is a primary function of the insurer, as is the issuing of guidance to help mitigate such losses. In the latest of its ongoing series of Security Bulletins, TT focusses on the crucial importance of the container seal, as a fundamental tool in assuring the integrity of global cargo transportation.

Despite the existence of a wide range of security seal types, from basic plastic clips through to the frequently used bolt seals, and now sophisticated  digital options, many in the supply chain are ignoring their benefits in maintaining cargo integrity and promptly identifying theft.

Thieves have devised complex strategies, as well as traditional bolt cutters, to access a container’s cargo undetected.  These include recruiting insiders and manipulating seal numbers, either manually or using 3D printing so almost identical seals can be affixed once the cargo is stolen.

“Whatever sealing regime is employed its effectiveness crucially depends on how the process is managed,” emphasises TT’s Logistics Risk Manager, Josh Finch. “It is important for supply chain managers to be aware of the limitations of the various seal designs but also appreciate that whatever seal type is employed, their efficacy hinges on whether the information from the seal is accurately checked. A security culture must pervade operations at both loading and unloading points, as well as other key handling locations.”

Often personnel at the receiving warehouse view the seal as a nuisance, something that needs to be cut from the doors prior to them opening the container and unpacking it. However, identifying any tampering with the seal can be vital insofar as liability is concerned, helping to pinpoint exactly how the theft occurred, who was involved and where goods were damaged or stolen. “Moreover such knowledge clearly acts as guidance in taking steps to avoid future incidents,” comments Finch.

A vital consideration in expanding the use of seals is that almost all are currently either single-use or have an element that is plastic. Clearly, promoting their widespread usage involves consideration of sustainability, especially as the industry focusses increasingly on environmental, social and governance (ESG) issues. Speaking of this limitation, Finch comments “While there are clearly environmental concerns with many container seal solutions, we cannot ignore the societal implications of allowing cargo theft to thrive in the industry. TT sees innovation in all areas of the transport and logistics industry, and we see great potential in digital seals that increasingly appear on the market.”

Gathered together in this Security Bulletin is TT’s own loss prevention advice together with collaborative work undertaken with other like-minded organisations in this space. From basic descriptions of seal specification, performance characteristics and benefits to new e-seal and tracking technology, and from details of criminals methodologies to guidance on best practice to combat theft, the Bulletin outlines the crucial role seals should play in operators’ security processes and culture. It can be accessed free of charge HERE

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, more secure, and more sustainable. Founded in 1968, the Club has more than 1500 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

Kevin King has been confirmed as Chief Executive Officer of the specialist transport and logistics insurer TT Club, completing a planned move announced last year.  Acting as Deputy CEO to Charles Fenton over the last year, King and Fenton have worked closely to complete a smooth and efficient transfer of responsibilities. He has officially taken up this position from 1^st August.

Originally based in the United States, King has long held positions within Thomas Miller managed businesses, and transferred to London in 2015 to lead the Europe, Middle East and Africa region at TT.  More recently he served as the insurer’s Chief Operating Officer.

Out-going CEO Charles Fenton, in confirming the move, said, “Kevin is well-positioned to lead TT into a challenging future.  His vast experience of the mutual insurance model, vision in harnessing new technologies and well-honed management skills will ensure TT continues to evolve in step with both global transport developments and a dynamic insurance market.  The TT main board and I have every confidence in his leadership abilities and I welcome him to his new role.”

Fenton himself will remain close to the business.  He has been Chairman of Thomas Miller Holdings since 2021 and will continue as a member of the TT Club Board and in the promotion of the Club internationally.

Kevin King is eager to help guide TT through the next phase of its 56-year history saying, “It has long been a privilege to work for, and now lead, a purpose driven organisation. The Club’s mission to make the global transport and logistics industry safer, more secure and more sustainable guides everything we do. We are well positioned financially, technologically and especially with our established expertise around the world to succeed both as an insurer and a positive force for change in the industry. I am grateful to Charles for his mentoring and leadership over my career, and thankful he will remain close to the business.”

ENDS

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, more secure, and more sustainable. Founded in 1968, the Club has more than 1500 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