U.S. importers and exports will soon see random container inspections from Maersk.
The Danish shipping giant Maersk Line recently announced that it has implemented a physical container inspection pilot program in an effort to improve safety and reliability in the Containerized Maritime Supply Chain. Initially, the project will focus on import and export shipments in the U.S. ports of Newark, Houston, Miami, and New Orleans.
In a Customer Advisory posted on January 10, Maersk announced that the National Cargo Bureau will begin randomly inspecting containers to ensure that cargo descriptions match the actual contents of the container and that the contents have been correctly stuffed, lashed, and secured. If the contents of the container are not properly secured, Maersk will take corrective actions such as reworking the container to ensure regulatory compliance. While Maersk will pay for the inspections, any deficiencies requiring corrective action will be charged to either the Shipper or Consignee, dependent upon the direction of the container and will likely experience lengthy delays. Shippers may even face fines or legal consequences for goods that have been mis-declared.
NCB is a not-for-profit marine surveying organization charged with assisting the U.S. Coast Guard in carrying out the provisions of the International Convention for the Safety of Life at Sea. NCB is a continuation and amplification on a broader base of inspection services formerly performed by the Board of Underwriters of New York and the Board of Marine Underwriters of San Francisco and now operates on a nationwide basis. For more information on NCB, visit their website by clicking here.
While the initial program is starting in the U.S., it is expected that the program will eventually expand to other regions and that other carriers will likely follow suit.
Why is Maersk Conducting Random Container Inspections?
The program is largely viewed as a response to the recent spate of fires breaking out on cargo vessels. By performing these container inspections, Maersk hopes to remove some of the risk from mis-declared or incorrectly packed containers for all parties involved in handling and transporting cargo. A misidentified or improperly packed shipping container not only puts the container at risk, but also puts the lives and cargo of others at risk.
The fires onboard the Hapag-Lloyd’s Yantian Express on January 3 off the coast of Nova Scotia and the Maersk Honam last March highlight what has become frightening common trend in the industry. While the cause of the fire on the Yantian Express is not yet known, Hapag-Lloyd said it began in a single container and spread to additional containers. Heavy weather rendered the crews’ firefighting efforts useless and forced them to abandon ship. The major fire on the Maersk Honam killed 5 of the 27 crew members on its maiden voyage in the Arabian Sea. The suspected cause of the fire was mis-declared cargo.
Global Shipping Insurer TT Club reported last year that “Sources suggest that container fires may occur on a weekly basis, and statistics indicate there is a major container cargo fire at sea roughly every 60 days.” Not only is this a major problem for the international shipping industry in general, it is also serves as a reminder to Shippers of the importance of cargo insurance.
Mis-declared shipping container contents is not the only risk the shipping industry faces. Peregrin Storrs-Fox, Risk Management Director at TT Club, noted that as much as 66% of cargo damage incidents can be attributed to poor practices in the overall packing process, including load distribution and cargo securing. “The overall economic cost to the industry is estimated to amount to billions of dollars each year. Furthermore, the human cost is substantial, with deaths and injuries regularly reported,” he said.
What Can Shippers do to Prepare for the Upcoming Inspections?
- Ensure containers are properly packed. Follow the International Maritime Organization’s Code of Practice for Packing of Cargo Transport Units (CTU Code) to ensure the safe transport of your cargo.
- Ensure container contents are properly declared. Check to make sure packing lists match with customs clearance paperwork.
- Ensure cargo descriptions on the packing list exactly match what is stipulated on the commercial invoice, bill of lading, and the airway bill. Mismatches or unclear descriptions of the contents of your shipment may lead to closer scrutiny of the cargo at customs which could result in lengthy delays and incurred expenses. Content descriptions should be as generic as possible and clearly describe the items you are shipping. For example, if you are shipping a submersible utility pump, don’t just list the product’s name (Everbilt 1/6 HP) or the model number (UT00801) – the item description should clearly state that the product is a submersible utility pump.
- Maersk Line
- The Loadstar, Maersk to begin random container inspections over safety fears, January 16, 2019
- American Shipper, Number of Containership Fires is Shocking, January 8, 2019