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Insuring perishable cargo

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International trade in perishable cargo is a growth area for container carriers, now accounting for over 90% of world maritime reefer transport capacity and making inroads to airfreight as well. As ever, reward can be countered by risk.

While perishable cargo is high paying freight, it can also produce a high value claims. Shippers of such cargo – ranging from foodstuffs through to pharmaceuticals – will generally rely on specialist support throughout the supply chain process. If a booking is accepted correctly and the empty container is ‘pre-tripped’ properly and released to the shipper with the booked temperature/vent set correctly, the chance of the reefer breaking down in transit is low.

The majority of perishable cargo claims occur due to confusion over Celsius and Fahrenheit setting, the temperature or vent is not set correctly and the container is not checked or plugged in throughout the supply chain. This article looks at some critical processes which – if done correctly – increase customer satisfaction and profitability or, conversely, lead to costly and time-consuming claims.

The Booking

Whether a booking is initiated with a shipping line by the shipper or a freight forwarder, it is clearly important to ensure that correct information is evaluated. The booking will typically involve a number of factors, including the following:

  • Equipment availability
    The type/size of container will be listed in the booking and the booking representative must ensure the equipment type requested is available or can easily be repositioned.
  • Commodity
    It is important not just to record the cargo to be carried, but also to check whether the immediately previous cargo carried in the equipment to be offered may give rise to tainting.
  • Temperature or controlled atmosphere settings
    Take care to record these details correctly! Confusion and misapplication of Fahrenheit or Celsius thermostat settings is a leading cause of refrigerated cargo claims. Clearly, controlled atmosphere or humidity requirements may be critical as well.
  • Vent setting (fresh air exchange)
    Book fresh air vent settings in volumetric flow rates – cubic feet per minute (cfm or f3/m) or cubic metres per hour (cmh or m3/h). Do not use percentages or statements of partial openings like ‘¼’ or ‘25% open’. Incorrect vent settings may cause temperature and humidity management problems.

Naturally, freight forwarders and transport operators need to ensure that all details received from their customer are accurately passed on and that the booking confirmation received from the shipping line is carefully compared to the original booking. Any discrepancies should be rectified with the shipping line and each party should be encouraged to retain confirmations for at least a year. Remember also to ensure that all details are correctly reflected in the contract of carriage (eg. bill of lading) – which becomes the legally controlling document.

The empty release

It should go without saying that the container should be in good repair, compliant with CSC (Convention for Safe Containers) and the refrigeration machinery maintained in accordance with manufacturers’ guidelines. Prior to the empty release, the refrigeration unit, the container and genset must go through a pre-trip inspection (PTI). Such inspections are crucial to ensure the unit will perform as desired and should be properly documented. Ensure that the unit is clean and free from odours, and floor channels and drains are clear of debris.

Upon completion of the pre-trip, but prior to release of the empty unit to a third party – whether trucker or rail operator – the thermostat and fresh air exchange (vents) must be set in accordance with the booking instructions. Take special care to ensure that Celsius & Fahrenheit are not confused. Under no circumstances should the releasing terminal/depot assume that any other party will set the thermostat or fresh air exchange correctly after the cargo is loaded.

‘Partlow’ charts are increasingly rare, but it is important to ensure that the applicable recording settings, including the specific contracted temperature/atmosphere, are properly established and mechanisms/systems fully operational.

The genset must also be pre-tripped and filled with adequate fuel to make the entire journey to the designated destination. It should be checked to ensure it is running properly just prior to empty release to the trucker. Effective temperature control requires power supply regardless of mode of carriage or location in the supply chain.

Packing the reefer container

The shipper/packer should ensure that the container is acceptable in every way – in terms of general condition, cleanliness, free from odour, and with temperature and vent settings as required. It is almost always important that the cargo is cooled to its desired carrying temperature prior to loading; the reefer unit is not intended to cool cargo. Furthermore, the packer should ensure that the cargo does not restrict or short circuit airflow in the unit – as well as looking after appropriate cargo securing.

Elevated temperature readings due to a lack of pre-cooled cargo could cause the terminal to waste time and money running tests to ensure the unit is running properly. Cargo loaded at elevated temperatures is one of the leading causes of cargo claims.

Cool chain management

When the reefer container arrives at the port of loading, the temperature setting, return air temperature and vent setting need to be checked against the booking information supplied by the shipping line and the presenting carrier’s paperwork (whether road, rail or inland waterway). The terminal is required to monitor refrigerated containers regularly until the unit is loaded on board the ship, alerting the carrier where the records deviate from contracted metrics. Again, records should be retained for at least 12 months in case of cargo claims.

While landside logistics in the cool chain are complex, it is also important to maintain full integrity of records through the entire transit. Some temporary power supply disconnection is inevitable, but effective transmission of instructions and close monitoring will ensure that this technically and operationally demanding type of movement can be carried out successfully.

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