What's in the box? Not necessarily what you think

cargo
Structured industry cargo screening needed.
shipping container
Mid-declaring cargo can be an art for many shippers.
Industry Database

Thousands of containers moving around the globe are declared harmless when they actually hold dangerous cargoes. Felicity Landon looks at the implications

What’s the difference between calcium hypochlorite and ‘water purifying equipment’? Or between ammonium nitrate and ‘plant growth regulator’? Nothing, most likely.

Misdeclaring dangerous cargoes appears to be something of an art for many shippers who are, it is assumed, anxious to avoid the paperwork, restrictions, regulations and/or costs involved in shipping extremely hazardous goods.

The results can be devastating, as evidenced in an alarming number of container ship fires – at sea and in port – that have been put down to mis-declared cargoes.

Shipping lines and other stakeholders are attempting to fight back. But while it would seem to be common sense to take collective action on an issue that threatens safety, lives and environmental damage, such an approach can be hampered by anti-trust and competition rules.

To put the issue into perspective, using its Cargo Patrol system, set up to scan bookings to detect undeclared dangerous or suspicious items, Hapag-Lloyd identified 370,000
suspicious bookings in 2018.

“Of these, we investigated 290,000 in depth and at the end of the day we had 4,000 bookings where we have proof that the cargo was mis-declared, not declared or wrongly declared,” says Ken Rohlmann, the line’s senior director, dangerous goods.

That figure means far more than 4,000 containers, as one booking can be for multiple boxes. In the first quarter of 2019, Hapag-Lloyd’s investigations identified 900 such mis-declared bookings.

Cargo Patrol scans bookings for 7,000 key words and search terms that give reason for suspicion. “There are some chemicals or some chemical formulae or words where you could try to hide the real content of container – which could be acid or explosive. Some people put the chemical formula and avoid the actual word for the cargo they are carrying,” says Nils Haupt, Hapag-Lloyd senior director, corporate communications. “This has been going on for quite a while. There are really thousands of containers that are mis-declared, either intentionally or by chance.”

Hapag-Lloyd estimates that 0.06% of containers worldwide are carrying undeclared dangerous goods. “If you just look at Singapore, that would amount to 18,000 containers a year,” says Mr Haupt.

What happens when the system finds a rogue box or boxes? Mr Rohlmann says, “We don’t load them. If we get an alert from the system, we put the container on hold. We contact the customer and ask why they didn’t declare the cargo.”

But what happens next is hugely frustrating. The shipper can simply book the same ‘harmless’ container with the next shipping line.

“We do report undeclared shipments that we find to the CINS (Cargo Incident Notification System),” he says. “But unfortunately, we are not legally allowed to name and blame. We can only describe the cargo, port of loading and planned port of discharge. At that state we don’t necessarily have a container number and we are not allowed to name the problem shipper.”

This is down to multinational anti-trust restrictions, he explains: “But if we have proof that someone has cheated on us and is putting our people at risk and risking damage to the
environment, we should be allowed to talk about this.”

Mistakes can be made, of course, but it’s the deliberate cases that really scare him. “They deliver manipulated documents and manipulated safety data. This represents a risk for everyone dealing with the box – truckers, inspection officers, those securing cargo, with all assuming it is a harmless cargo when it is toxic. If you don’t know what is in the box, it is a potential risk. For example, if there was a fire on the terminal, there are some chemical commodities for which contact with water is dangerous.”

He would like to see structured industry cargo screening where all the lines exchange key words and data on fraudulent shippers and are allowed to blacklist shippers that continuously make fraudulent bookings.

The TT Club has been working with ICHCA International, the Global Shippers’ Forum, World Shipping Council, CINS and others on a range of aspects around dangerous goods and declaration.

“Roughly two-thirds of cargo-related incidents relate to the poor packing process in its entirety, i.e. securing, load distribution and declaration,” says TT Club risk management
director Peregrine Storrs-Fox. “We are seeing cargoes of a much wider range being put into containers and higher volumes of cargo being loaded on single ships, i.e. an adjacency risk. One package in one container can cause a hazard when it is next to a number of other containers, whether in the ship’s hold or awaiting/post shipment on the berth.”

There are often commonalities to be found, of shippers who habitually get packing processes wrong or declaring cargo incorrectly also being involved in customs fraud or other security-type issues, says Mr Storrs-Fox. A big issue is insufficient enforcement by cash-strapped governments. Enforcement is difficult to push up the agenda.

There is also a mismatch between transport modes: “Those involved in maritime enforcement may not have that much contact or leverage with those involved in road or rail enforcement. There are jurisdiction and communication and the legal frameworks are not in place.” But above all, he says, the anti-trust issues restrict lines’ ability to share information. “Shipping lines have reason to be concerned that they could fall foul of commercial/anti-trust rules.”

Shipping line A may have words with a shipper and decide not to carry a cargo but that shipment is almost definitely still going to move, either with a competing carrier or even on one of line A’s own ships because the other carrier is in the same alliance.

As Mr Storrs-Fox points out, while a line gets as much information as it requires when dealing direct with a shipper, it receives only minimal information when dealing with an alliance partner’s cargo, to prevent it from pinching cargo. Hence it can end up shipping the very container it rejected.

More than 130 people ended up in hospital after an explosion and fire onboard a containership in Laem Chabang port in May, thought to have been caused by mis-declared cargoes of calcium hypochlorite and chlorinated paraffin wax.

“This illustrates the risk that stevedores take these days. They are in a similar position to the partner line in that they will have limited information around each container coming into the terminal,” says Mr Storrs-Fox.

“They will do what they can to put the container in the right part of the yard, connecting to power and/or monitoring if needed, but unless they are told this, they will deal with it as a normal box. We have seen explosions and fires related to the condition of the cargo at a number of terminals.”

From his own calculations, he believes there are more than 150,000 containers a year that represent ‘ticking time bombs’ in the supply chain. Could something like Cargo Patrol be made standard across the industry?

The debate is fraught and full of complexity, he says. “A shipping line will have anti-trust lawyers sitting on their back saying they should not be talking about anything like this to their competitors.”


Tackling the danger

Tackling the dangers of mis-declared cargoes requires more consistency in messaging and standards and a reduction in the amount of erroneous paperwork, says Peregrine Storrs-Fox.

Confusion and inconsistency can be reasons for shippers deciding to mis-declare. Each port around the world has its own restrictions for certain cargoes. Each line therefore has to check the restrictions to see whether they can carry a specific cargo (or amount of it) based on the intermediate port calls on their route.

The restrictions vary, there is a high propensity to error because it is a very manual process, and sometimes restrictions are open to challenge, says Mr Storrs-Fox.

“Each time there is a restriction, whether at carrier or port level, there is an incentive to declare it as something else to get it through the system. I am not condoning bad behaviour but if someone wants to move cargo from A to Z, they need to find a way to do that. One way is to say that it is not quite as bad as it really is, in order to get around the
process – as with calcium hypochlorite, which is used for water treatment and purification, but is highly volatile and dangerous.”

Ken Rohlmann agrees: “Where there are a lot of port regulations or shipping lines are not accepting a specific cargo, it will find its way. My philosophy is that we try to have our
‘restricted’ list as short as possible and invite shippers to find the best way and the safest way to transport it. Saying ‘it isn’t allowed’ is going to increase the problem.”

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