Container Damage is a common occurrence in Maritime Logistics. One out of four containers that pass through US ports gets damaged at some interchange points.  Shipping companies end up paying for these damages even when it is not their fault.

Container damage is inevitable and can happen at any stage of shipping, from the point of loading to unloading. That’s why we published this blog to talk about circumstances that lead to damage and provide you with strategies that help you reduce the number of damaged containers.

Main reasons for damaged containers

Container Damage could be the result of natural disasters, human error, or machine malfunctions. The first human error usually is the wrong choice of container for your cargo. Once you have the right container, it needs to be surveyed for previous damages, odours, holes, ventilation, cleanliness, temperature control, proper flooring. When the surveyor has given the green light to the container, it can be stowed, which brings us to the next issue which is stowing.

Bad stowing is one of the biggest reasons to cause physical damage to the container. Overloading the container, uneven distribution of the weight, tying up the cargo in a loose manner, or insufficient use of dunnage can cause the cargo to sway during the transport. This results from the lack of supervision of the shippers, lack of knowledge in cargo stowing, and trying to save costs without understanding the consequences.

The next influential factor in container damage is the weather. Weather is unpredictable and causes internal and external damage. The air near the ocean has high levels of moisture and when they get trapped in the container, they settle in the colder areas. When the container goes to a hotter region, the moisture condenses into water and climbs on to the walls and the ceiling and starts to drip down causing Container Rain. This results in rusting and corrosion of the container walls.

Containers can be deemed unworthy to use because of Contamination. They could be contaminated with pests or sometimes odour. For instance, a container that previously carried food items can pass on the odour to the next cargo item such as clothing.

Container damages also happen while loading and unloading. Inexperienced fork lifters can cause punctures, dents, stack them unevenly, or drop containers. If the dents or punctures haven’t caused extensive damage they can be patched up.

 

Types of Container Damage and how you avoid it

Physical damage to a container can happen at every transit point from loading or unloading to through bad container handling. Below you can see a list of the most common damages and some tips on prevention:

Broken container doors:

This can happen due to bad handling of the container, careless securing of the container while loading, road accidents or robbers.

Tip: The container frames should be checked at the terminal. Repair if possible, if not notify the shipper before the dispatch.

 

Total loss of container while on the ship:

can happen when the ship is swaying due to bad weather, sinking, bad stacking of containers, wrongly declared weight, bad stowing of cargo.

Tip: The crew needs to act on weather-related warnings, steer clear from storms, follow colregs to avoid a collision, the lashing needs to be done properly, check the condition of lashing regularly.

 

Dented and scratched container:

Happens due to the poor handling of the container by forklifts, scrapping with other containers, road accidents.

Tip: Check the frames at the dispatch points, educate the drivers and crane operators on proper handling.

 

Dropped container:

It can happen due to a faulty forklift, overloaded container, poor handling.

Tip: Check for container casting conditions, stack container symmetrically, and do not overload containers.

 

Heat Damage:

due to wrongly declared goods on containers, fire on board.

Tip: Comply with IMDG Code regulations for segregation/heat sources, avoid storing near heated region.

 

Hole in Container:

It can be punctured due to poor handling of forklift, hit by another vehicle or container.

Tip: Set a container maintenance schedule, Regular inspection for corrosion, wear and tear.

 

Road Accident:

Containers can be damaged due to bad weather, bad road conditions, bad stowage, driver fatigue.

Tip: Road hauliers need to be professional on the road, check for proper stowage.

 

Train Derailment:

Happens due to exceeding speed limits, bad railway tracks, bad weather, driver fatigue.

Tip: Check for optimum driving conditions.

Apart from the above cases, it is important to conduct regular surveys of the container to ensure a smooth flow of operations. An essential step would be to get an inspector to check the container thoroughly, create a virtual proof, check for previous damages, make sure you have the right container before you start using it.

While the weather conditions cannot be controlled, containers can be lined with insulation to moderate the temperature in the container above the dew point. Usage of desiccants, which reduces the humidity in the air, can be also be used in the containers for moisture control, preventing condensation and thereby corrosion.

Insuring the container is a vital step! Container insurance helps protect you from container damages, mysterious disappearance or total loss and starts at $2.5 per standard container on xChange (see full price list for container insurance here).

 

Who is responsible for the damage?

In most cases, it is very hard to determine who is responsible for the damage and what is the source of the damage. The people who are physically handling the container at different stages of the shipment are:

  • The crew at the factory/ supplier which loads the cargo into the container
  • The trucker who picks up the container and bringing it to a warehouse
  • The drayage company that brings the container to the terminal
  • The crew at the origin container terminal
  • The crew at the transshipment port
  • The crew at the destination terminal
  • The customs handling team
  • The trucker at the destination handling the final delivery

How to claim a damaged container?

The costs of container damage can vary with every incident and cannot be pre-determined. The damages are compensated either by the owner of the container or the user of the container after the necessary evidence has been collected. Most companies agree on a damage-protection plan (DPP) for minor damage (costs below $100) to make sure the maintenance and repair are worth it. Based on the cases we deal with at Container xChange we have collected some information on what happens when there is a damaged container.

  • The user of the container is always recommended to take pictures of the container in the off chance that the container gets damaged.
  • Once the container is returned to the depot, the owner gets a surveyor to check the condition of the container to assess the damages.
  • The depot then creates photographical evidence of the damages and creates an invoice. If the value falls under the quoted amount of Damage Protection Plan agreed by both parties, then the supplier takes care of the damage.
  • In case, the value is higher, the invoice is then sent to the user of the container. The user has 30 days to pay from the day he receives the invoice. If the user doesn’t agree with the charges, he has 10 days to start a dispute.
  • At this point, both parties can conduct a joint survey with two surveyors representing each side or one surveyor, whom they both agree on. The charges are then paid based on the result of the survey.
  • In case of a total loss of the container, the user of the container must compensate for the container, and it cannot be disputed.
  • But each case of container damage can be different, and solutions are given on a case-by-case basis. These disputes can last anywhere between 2 days to weeks based on the intensity of the dispute.

If you have a damaged container, hopefully, one that can be recovered, then you might also consider converting it into a living space, office or maybe even a wine cellar? Feel inspired here.