The industry bodies of the Cargo Integrity Group continue in their mission to improve safety in the global supply chain. The Group has identified a number of cargoes, commonly carried in containers, that under certain conditions can cause dangerous incidents. They urge everyone handling these goods to follow all applicable regulations, the CTU Code and industry best practices.

6^th June 2024

In addition to promoting sound packing and shipping practices, the Cargo Integrity Group aims to increase awareness about the types of goods, often less obvious, that can compromise safety in the container supply chain under certain conditions.

The Group has identified fifteen such ‘Cargoes of Concern’ that are commonly transported by sea and intermodally. While these are usually transported safely when regulations and guidelines are followed, the Group has created this list to highlight cargoes that can become hazardous if handled incorrectly. They emphasize that cargoes that are mis-declared or have incomplete or incorrect information about their identity are more likely to be involved in incidents.

This list is not exhaustive, but each item illustrates a common type of hazard, divided into three categories:

Reactive Hazards – These cargoes can catch fire and cause significant damage and casualties under certain conditions. They are generally subject to Dangerous Goods regulations. Examples are:

• Charcoal / carbon
• Calcium Hypochlorite
• Lithium-ion batteries
• Cotton and wool
• Fishmeal and krill
• Seed cake

Spill or Leak Risks – These commodities can present a risk if not packed properly or if they are damaged. Spills or leaks from these cargoes can harm the health of people cleaning up the spill as well as the environment. Examples are:

• Hides and skins
• Wine
• Bitumen
• Cocoa butter
• Waste – recycled engines and engine parts
• Vegetable and other oils, particularly when packed in flexitanks

Improper Packing Consequences – Cargoes that are poorly or incorrectly packed or secured in the container can lead to injuries to personnel or damage to nearby containers, property, or other cargo. Such incidents can cause severe accidents at sea or on land, such as truck rollovers and train derailments. Examples are:

• Logs and timber
• Steel coils
• Marble and granite

In the coming months the Cargo Integrity Group will publish additional guidance on the identification and safe handling of these cargoes.

The list is based on data from, among other sources, the claims history of leading freight insurance provider, TT Club; a report prepared by ICHCA and submitted to the IMO on incidents involving dangerous goods on ships or in ports, and from CINS which collates information provided by its members on incidents involving dangerous cargo.

“The combined experience of our organisations has been harnessed to identify these categories and result in pin-pointing some commodities where the risks are perhaps less obvious,” says Peregrine Storrs-Fox, Risk Management Director, TT Club. “While the potential dangers of transporting, for example, calcium hypochlorite or lithium-ion batteries might be more widely appreciated, the combustible qualities of seed cake or the hazards associated with cocoa butter or vegetable oils, will be less well-known.”

“Every actor in the global container supply chain is responsible for the health and safety of not only their own people, but also of those at any onward stage of the container’s journey. Complying with regulations and following the advice in the CTU Code saves lives, and we appeal to everyone shipping, packing and handling commodities that fall within the categories of these Cargoes of Concern to be particularly diligent,” comments Lars Kjaer, Senior Vice President, World Shipping Council. 

Dedicated to improving the safety, security and environmental performance throughout the containerized supply chain, a primary goal of the Cargo Integrity Group is to increase 

awareness and wider use of the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units – the CTU Code.  

As part of this effort the Group has developed a ‘Quick Guide’ to the CTU Code, together with a Checklist of actions and responsibilities for the guidance of those undertaking the packing of cargoes in freight containers. These are now available in all six official IMO languages as well as Italian and are available HERE

About the Cargo Integrity Group

The Cargo Integrity Group brings together international freight transport and cargo handling organisations with different roles in the supply chain and a shared dedication to improving safety, security and environmental performance throughout the logistics supply chain. The Bureau International des Containers, the Container Owners Association, FIATA, the Global Shippers Forum, ICHCA, TT Club and the World Shipping Council are co-operating on a range of activities to further the adoption and implementation of crucial safety practices and regulations.

The seven industry bodies dedicated to container safety, collaborating as the Cargo Integrity Group, highlight an independent study carried out by researchers at Italian University Politecnico di Torino into shipper and forwarder application of the CTU Code.  The 2023 survey yielded encouraging signs of adoption and highlighted several convincing arguments – including financial benefits for its use

The survey highlights multiple benefits to CTU Code users including:

• Improved safety, reputation and supply chain coordination
• Decreased cargo damage, environmental impact and operational inefficiencies
• Those using the CTU Code incurred no extra costs in employees, contractors, or vehicles
• Any increase in loading and waiting times were typically offset by CTU Code related efficiencies overall
• Annual costs and penalties reduced from €670,000 pre-implementation of the Code to €13,000 post-implementation
• Extra costs as a percentage of revenue reduced from 37% to 10%

In the words of the report’s authors (Bruno, et al.), “The application of the CTU Code to cargo loading and transportation processes can increase the safety level of transport activities, and also improve business processes and competitiveness. The results show that the use of the CTU Code provides an increase in safety with a drastic reduction of loading accidents and damage to goods, as well as important benefits in terms of costs, improved efficiency, corporate image and reduced environmental impact.”

The Cargo Integrity Group continues its efforts to underline the positive effects of the widespread use of guidance in the CTU Code, which is the Code of Practice for Packing of Cargo Transport Units jointly published by the International Maritime Organisation (IMO), the International Labour Organization (ILO) and the United Nations Economic Commission for Europe (UNECE)¹.

The Group is dedicated to improving the safety, security and environmental performance throughout the logistics supply chain. In particular, it is concerned to promote safe methods to those responsible for the packing of cargoes in containers, securing them and accurately declaring them.

Welcoming the Politecnico survey, the CEO of ICHCA, one of the Group’s founding associations, Richard Steele said, “As far as we are aware, this is the first example of publicly available empirical evidence about the use of the CTU Code made by forwarders, shippers and others responsible for safe packing.  Notwithstanding the regional focus of this particular survey, we believe the results to be genuinely encouraging.  They show that good operational management, efficiency and safety are partners, not opposites.”

To facilitate a greater degree of understanding and wider use of what is a lengthy and complex document, the Group has published a ‘Quick Guide’ to the CTU Code, together with an editable and saveable Checklist of actions and responsibilities for the guidance of those undertaking the packing of cargoes in containers.  These materials are now available in all six of the United Nations’ official languages, as well as Italian².

The full results of the Politecnico di Torino’s survey can be accessed here https://www.sciencedirect.com/science/article/pii/S2590198223000738?via%3Dihub

Footnotes:

¹http://www.imo.org/en/OurWork/Safety/Cargoes/CargoSecuring/Documents/1497.pdf

² Arabic, Chinese, English, French, Russian and Spanish.  Downloadable HERE

As global trade declined during the second half of 2022, in response to severe economic headwinds in many countries and the continued effects of the Covid-129 pandemic, the GSF/MDS Transmodal Container Shipping Market Review reflected the impacts on the activity and fortunes of shippers of unitised goods in international trade.

The latest edition of the Container Shipping Market Quarterly Review published today, reports data from the third quarter of year – a time of marked increases in consumer and producer price inflation, historically large increases in interest rates by central banks and high levels of stock inventories in many importing countries. Global energy prices edged higher amid disruptions to supplies arising from the Russian invasion of Ukraine.

However, the impacts of widespread ‘lock-downs’ and stay-at-home orders in China to contain the spread of Covid-19 do not appear to have significantly affected export volumes according to its national trade statistics.

Key highlights of the Review include:

• Trade volumes of goods capable of being transported in containers continued the decline observed at the end of Quarter 2, but the drop in overall volumes was much less than that reported by the container shipping sector. This is attributed to commodities, such as coffee, scrap metal and plywood, that can also be carried in bulk or semi-bulk form, switching away from containerised movements where shipping rates remain relatively high.

• Despite falling for a second quarter, carriers’ unit revenues (earnings per container moved) were still 2.8 times higher than pre-Covid rates whereas unit operating costs have only risen by a factor of 1.5 over the same period. Cost pressures have largely been higher charter rates and a slow rise in fuel costs that has since receded. Container shipping lines remain highly profitable despite a falling market.

• Spot rates fell by a fifth during the period, leaving many shippers ‘burnt’ by their decisions to commit to long-term contacts earlier in the year and questioning the many sources in the industry who confidently predicted that disruptive congestion and capacity shortages would continue through 2022 and beyond.

• Adding to shippers’ frustrations, service levels remained at historic lows, with the predictability of arrivals still at only 85 per cent, meaning 1 in 6 sailings arrived later than normally expected.

• The modest improvements recorded in the number of scheduled port calls made, at 90 per cent, is a welcome positive that can be partly attributed to the rising number of sailings that were ‘blanked’ during the period and didn’t sail at all, so easing the pressure on intermediate ports. Many of these saw an improvement in the proportion of expected capacity actually calling at the port s monitored but the proportion of lost capacity is still at historically high levels.

Mike Garratt, Chair of MDS Transmodal said:

“In quarter 3 2022 we saw the mean rates charged by the major lines continuing to suppress the proportion of container traffic they carried while the role played by new entrants was small. During quarter 3 we have seen several of these recent entrants leave the market as spot rates have fallen sharply, while leaving mean rates paid much higher. With a combination of stagnant demand and few ships now being delayed by port congestion, one would expect competition for shippers’ business to lead to a recovery of the share of the overall cargo market carried by container.”

James Hookham, Director of Global Shippers Council, commented:

“The quarter saw the downturn in volumes recorded at the end of Quarter 2 turn into a sustained decline – conditions that have not been seen in the container shipping market for over ten years. Many shippers are experiencing the behaviour of the market under such conditions for the first time.

“Blanked sailings, slow steaming and other capacity management measures will add to the catalogue of frustrations accumulated over the previous 30 months of record high rates and poor levels of service”.

“The widening gap between spot rates and contact prices agreed six months prior to these data will anger shippers further and demands a flexible and immediate response by carriers if their dream of securing a majority of their business on contract ted terms is to be achieved.”

“The big question going into 2023 will be how much of their diminished volumes will shippers commit to renegotiated contracts and how much will they reserve for the spot market, which is expected to fall to below pre-Covid levels in the next few weeks?”

“Countering this trend will be efforts to manage capacity through ‘blanked sailings’ However, the extent to which spot rates are being supported by this permitted co-ordination between consortia partners is playing out just as competition authorities in Europe and North America are evaluating existing anti-trust measures and considering possible options for the future”.

Notes to Editors

• Mike Garratt, Chairman of MDS Transmodal, is available for interview. Please contact +44 (0) 1244 348301

• James Hookham, Director of GSF, is available for interview. Please contact: +44 (0)7818 450440; secretariat@globalshippersforum.com

• Media Contact:  The Container Shipping Market Quarterly Review for Quarter 2 2022 is available in PDF format on request from Maria Udy, Portcare International. maria@portcare.com +44 (0) 7979 868539.

• The Container Shipping Market Quarterly Review is produced every three months and reports, interprets and comments on trends and developments in the container shipping market as experienced and understood by shippers – the importers and exporting businesses that own the cargo carried on container ships. Shippers are the customers of the container shipping industry.

• The Quarterly Review collates and reports outputs from MDS Transmodal’s established and respected Container Business Model and other tools that are relied upon by governments and international agencies around the world. Working with GSF, MDST has generated eight new indicators showing how the market is performing in terms that are relevant and applicable to shippers as users and customers of these services.

• MDS Transmodal (MDST, www.mdst.co.uk) is a UK firm of transport economists which specialises in maritime and all other modes of freight transport. MDST works with senior management in the public and private sectors to provide strategic advice based on quantitative analysis, modelling and sectoral expertise.

• Global Shippers Forum (www.globalshippersforum.com) is the global business organisation speaking up for exporters and importers as cargo owners in international supply chains and trade procedures. Its members are national and regional shippers’ associations representing hundreds of manufacturing, wholesaling, and retailing businesses in over 20 countries across five continents. GSF works for safe, competitively efficient, and environmentally sustainable global trade and logistics.