| Written by Constance Stickler
Impact of Container Damage on the Cold Chain
Complaints about both dry containers and reefers with temperature-sensitive goods are the order of the day. However, while with a standard container, it usually takes a little more to cause damage, such as a collision with a vehicle in the yard, with a reefer, it often involves small temperature fluctuations over a certain period of time that render the entire contents of that reefer unusable.
To get a better idea of the value of goods and the damage done when ruined in 40' containers - the most commonly used type of refrigerated container - here is a list of actual cases (1):
- Cargo damage due to delay for mechanical repairs: USD 550,000
- Unintentional thawing of 12 containers of tuna: USD 500,000
- Temperature abuse of 27 containers of fruit: USD 335,000
- Temperature abuse of 3 containers of frozen shrimps: USD 228,000
- Temperature abuse of a consignment of cherries: USD 92,000
- Reefer malfunction affecting shrimps and prawns: USD 58,000
So we see reefers contain quite expensive cargoes, some of which can be even higher. Just imagine high-priced medicines or even priceless works of art that need a temperature and humidity-controlled environment.
In addition to the loss of the value of the goods that is obvious at first glance, cargo losses can have completely different consequences:
Product Quality and Safety Risks
Damage to containers within the cold chain poses significant risks to the quality of goods and their safety. Fluctuations in temperature, physical damage or contamination can jeopardise the integrity of products and lead to their spoilage and deterioration. In the worst case, their consumption or use could be life-threatening to humans.
When it comes to medicines and vaccines, temperatures must be maintained precisely and sterile conditions must be maintained at all times. If this is ignored, the effectiveness can be impaired to the point of being ineffective.
The consequences can be even more drastic for dangerous goods and chemicals. Fertilisers or loads that polymerise, such as resins, adhesives, or sealants, tend to ignite or explode if the required temperatures are not maintained.
Economic and Sustainability Consequences
If fresh produce becomes unusable, this has economic consequences for everyone involved. The costs associated with spoiled or damaged goods go beyond the immediate loss of inventory, including disposal costs, possible fines for non-compliance, and the need for replacement shipments.
Further costs arise from litigation and potentially rising insurance premiums, further increasing the financial burden. In addition, disruptions often cause delays in delivery schedules, which are a major nuisance for suppliers, distributors, and buyers and can cause customer satisfaction issues (see also: The role of the cold chain for Saudi import economy).
Reefer container damage claims also have far-reaching effects from an environmental protection perspective: If food becomes unusable for consumption, it must be disposed of. This means a waste of all the resources used to produce, process, and store and transport them, including water, energy, fertilisers and labour.
Additionally, food waste and its decomposition produce large amounts of greenhouse gases, especially methane, which has a powerful effect. Organisations like the IMO (International Maritime Organization) are trying to reduce precisely this emission, which is why food spoilage in maritime logistics is doubly painful.
Legal and Regulatory Implications
Compliance with international standards such as Good Distribution Practice (GDP) guidelines for pharmaceuticals or Hazard Analysis Critical Control Point (HACCP) principles for food safety is crucial to mitigate liability and ensure regulatory compliance.
Failure to meet standards due to negligence or inadequate risk management measures often leads to litigation and penalties from regulators.
The contractual obligations between the parties involved in transporting and handling the goods may also contain liability provisions, the violation of which can have far-reaching consequences for those responsible.
(4)
Understanding Container Damage
To better understand the damage, we will take a look below at what types of damage there are and how they occur:
Physical Damage
Physical damage is one of the most common types of reefer damage in the cold chain. Issues include dents, holes, cracks, and structural deformations that threaten the integrity and contents of the container.
Damage occurs due to rough handling or mechanical shocks during loading and unloading manoeuvres, as well as handling and transport activities. But even if the reefer is in the yard, for example, collisions with vehicles can occur.
These incidents can damage container walls, doors, or cooling systems. Holes also allow moisture, water or pests to penetrate.
Temperature Excursions
Prescribed ranges must be strictly adhered to for all types of temperature-sensitive goods. Deviations from these mandatory parameters may occur due to equipment malfunctions, power outages, inadequate insulation, or improper cooling system operation.
While some goods can withstand a higher tolerance of fluctuations of up to 15° or 20° Celsius, or there is only a limit that cannot be exceeded or fallen below under any circumstances, other goods are more sensitive. Here, the immediate recognition and mitigation of discrepancies between actual and intended is essential.
Even if the food has not become unusable, its quality is impaired. Accelerated ripening at temperatures higher than recommended shortens the shelf life and changes the goods' appearance, texture, and sometimes taste. Bananas that are too soft with brown spots or mushy tomatoes are less attractive to consumers.
Sometimes, you can't tell from the outside, but the nutritional value of certain foods can decrease. Vitamins, for example, especially vitamin C and certain B vitamins, are sensitive to heat and can break down quickly if the temperature is not controlled correctly.
Contamination
Contamination poses a significant threat, particularly to food and pharmaceutical products. When reefers are damaged, water and other liquids, such as chemicals, can enter and render the cargo unusable.
Dust, dirt and pollutants also enter containers through the smallest holes. This is particularly problematic when containers are stored in contaminated areas.
If the holes are large enough, a significant number of vermin can enter the container: rodents (rats and mice), insects (flies, beetles and ants) and spiders, but also birds and smaller mammals (squirrels and raccoons). Termites and wood-boring insects can attack the contents, wooden packaging, and pallets at the bottom of the containers.
Causes of Reefer Container Damage
Handling Errors
Communication errors can be disastrous for the charge. For example, if a plus is entered in the settings instead of a minus before the desired temperature, it is a small mistake with potentially extremely costly consequences.
Otherwise, as with other containers, careful handling is required when loading and unloading and when stacking containers in the yard. Even more than with dry containers, incidents, dents, and deformations of the container's outer surfaces can damage the often high-priced cargo.
Mechanical Failures
The most common trouble is leakage. Problems almost always arise from the poor condition of the seals around the openings, which allows air to escape. Wear and tear over long periods of use can cause damage to pressure lines, and it can also lead to electrical faults and weakened refrigerants.
Luckily, these problems can usually be fixed by a professional technician. What is essential here is regular maintenance cycles and immediate intervention if defects are discovered during container transport.
Environmental Factors
Environmental factors such as fluctuations in ambient temperature, humidity and harsh weather conditions can affect insulation and cooling systems.
Extreme temperatures, both low and high, can cause mechanical failures. Salty sea air and corrosive environments can also affect the containers' external and internal surfaces.
COVID-19 and Other Disruptions
During the pandemic, there has been a spike in refrigerated container damage claims due to global delays in transport to or from ports and in port. The disruptions were mainly due to the many regional lockdowns, says Joakim Enström, senior loss prevention officer at The Swedish Club (2).
Even if the disruptions caused by the pandemic are over, the new problems that have arisen since then, such as hostile conflicts, attacks by pirates and climatic events such as low water levels in the Panama Canal, have the potential to create exceptional situations repeatedly.
Reefer monitoring
The success of refrigerated transport depends highly on monitoring temperature. Indirectly, this also includes monitoring the power supply since, without electricity, the temperature can only be maintained for a limited period of time, and critical values may be reached relatively quickly, endangering the integrity of the goods.
Even if the container itself displays the temperature and other parameters on a display mounted on its exterior, the terminal operator still needs to record this data.
The most basic type of data collection is manual temperature checks, where an employee reads the temperature readings on the display and writes them down. While this used to happen on paper, tablets are now mainly used. Even if the tablets can send the data to the TOS, human intervention is still required to capture it.
These manual checks usually happen only once or twice per shift, with hours in between during which the values may come dangerously close to critical thresholds or even exceed them. According to TT Club Mutual Insurance Limited, human intervention continues to lead to losses (3).
Therefore, in addition to safety concerns regarding employees, aspirations for greater efficiency and fewer container damage claims make automated reefer monitoring desirable.
How Real-Time Monitoring Prevents Container Damage Claims
As technological developments continue to advance, the risks to the temperature-controlled supply chain can be reduced further.
Real-time monitoring is crucial for reefer operations to prevent claims by ensuring optimal conditions inside the container. This is how it is achieved:
Immediate Detection and Response: Critical parameters such as temperature, humidity, and CO2 levels are continuously tracked, and deviations are immediately detected. If the latter is the case, the system sends immediate warnings or alarms via SMS, email, or other communication channels. This enables a rapid response to correct the problems before damage occurs.
Enhanced Data Accuracy and Logging: Automated systems log the data accurately and consistently. Reviewing the historical records makes it possible to understand whether the conditions were correctly maintained throughout the transport period, thus providing evidence of the shipment's integrity.
Predictive Maintenance and Early Problem Detection: Advanced systems can analyse data for trends to predict potential failures and enable proactive maintenance. This can alert operators, who can then take the necessary actions to avoid serious problems.
Compliance and Regulatory Assurance: Consistent conditions and their documentation enable compliance with industry standards and legal requirements and record this. The detailed logs provide an audit trail that can be used as evidence for inspections and in response to claims.
Improved Operational Efficiency: Remote monitoring makes management more efficient and enables faster interventions without complex physical inspections. Systems that can be used to adjust settings remotely are ideal. This is another step towards greater security against errors during manual adjustments on site.
Increased Accountability and Transparency: The data obtained from real-time monitoring can be shared with all stakeholders, such as shippers, carriers, and recipients. This simultaneously promotes trust and reduces disputes over the condition of the cargo. Accurate records of who accessed the system at what point and what was changed improve accountability within the supply chain.
Example Scenarios
- Temperature Deviations: Suppose the internal temperature of the refrigerated container is above or below the acceptable range. In that case, the system immediately sends an alert and requires corrective action, such as adjusting the temperature setting or repairing the refrigeration unit.
- Power Failures: In the event of a power failure, the system can alert operators so they can switch to backup power sources or take other actions to restore power.
- Door Openings: Automatic monitoring systems can detect unauthorised or prolonged door openings that could affect the internal environment. Again, alerts are sent so the doors can be closed promptly and safely.
A Case Study: Perishable Goods
Strawberries should be kept at a constant 0°C to 2°C during long-term transport. In our case, the temperature approaches the upper end of the range, and the system triggers an immediate alert. When investigating the cause of the temperature increase, it turns out that the refrigeration unit has failed. Switching to a replacement cooling unit in good time prevents the goods from spoiling, thus the customer's claim for damages.
FAQs
Training and Awareness Programs
The aim of these programs is that everyone involved is aware of their responsibility for the correct treatment of the reefers: it must be clear to everyone that even minor inattention can have costly consequences.
First, it is necessary to identify who needs training, such as container handling equipment (CHE) operators, maintenance teams, logistics managers, and inspectors. At the same time, it is determined what knowledge and skills each group must have.
This results in content which includes both general topics and specialised knowledge. Everyone should be aware of the causes and types of damage, including, depending on their role, handling and maintenance, compliance with legal regulations and emergency procedures.
In addition to theoretical lessons and theoretical training, it is also essential to be presented with real-life examples, ideally ones that have happened at your own terminal, as the damage documentation often provides a variety of information about the course of events and the effects.
Quizzes, practical tests and performance metrics can be used to determine whether everyone has sufficiently understood all the content and can apply the practices in practice.
Of course, the program must be regularly adjusted based on feedback, new occurrences or patterns in occurrences, technological innovations (keyword: automation), and adjustments to industry standards. Therefore, it is important to see these exercises not just as an introduction for new employees but as ongoing support for the entire team.
Incentives for active participation can include recognition for reducing damage, outstanding performance in resolving emergencies, feedback, and new ideas.
Takeaway
Effective real-time monitoring and strict handling practices are essential to minimise the risk of reefer container damage claims. As the article shows, even minor deviations can result in significant financial losses.
By using advanced technology in monitoring, cold chain stakeholders can ensure the integrity of temperature-sensitive goods. It can help safeguard product quality, improve operational efficiency and promote sustainability.
Delve deeper into one of our core topics: Refrigerated containers
Sources:
(1) https://britanniapandi.com/2022/04/refrigerated-container-cargo-claims/
(2) https://www.coolingpost.com/world-news/reefer-claims-spike-during-pandemic/
(3) https://www.ttclub.com/news-and-resources/news/tt-talk/2023/tt-talk-keep-it-cool/?utm_source=email&utm_medium=email&utm_campaign=TT-Talk-June&dm_i=2RU,8B9TV,9FRKK3,Y7EU8,1
(4) - https://www.swedishclub.com/uploads/2023/12/TSC_Container_focus_Reefers_2022_WEB.pdf
Author
Conny Stickler, Marketing Manager Logistics
Constance Stickler holds a master's degree in political science, German language and history. She spent most of her professional career as a project and marketing manager in different industries. Her passion is usability, and she's captivated by the potential of today's digital tools. They seem to unlock endless possibilities, each one more intriguing than the last. Constance writes about automation, sustainability and safety in maritime logistics.
