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29th October 2010. Issue 135 in the series
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Welcome to TT Talk Edition 135
Contents:
1. Batteries again – this time Lithium ion batteries
2. Evidencing security through the supply chain
3. Aconcagua - sting in the tail
4. Conclusion
1. Batteries again – this time Lithium ion batteries
We return to the topic of batteries, that was addressed from two different angles in TT Talk Editions 124, 24 Dec 2009 (nickel metal-hydride batteries) and 128, 12 Mar 2010 (recycled batteries).
The US Federal Aviation Administration (FAA) has issued a warning to all US airline and charter operators to use special precautions when transporting lithium batteries on cargo aircraft. The warning reflects increasing concerns following a United Parcel Service cargo jet that crashed in Dubai after a fire broke out in the cargo compartment. The jet was carrying a large quantity of lithium batteries. Lithium batteries are commonly used in handheld communication and entertainment devices. The FAA's alert was intended to highlight the threat of batteries overheating and igniting causing a runaway fire. The bulletin also pointed out that fire suppression materials currently used on cargo aircraft are ineffective in dealing with fires caused by lithium batteries. The majority of cargo jets do not have advanced fire suppression systems in their main cargo holds.
The warning fell short of ordering packaging, handling and paperwork changes, but the agency recommended better identification and tracking of lithium battery shipments along with paying special attention to ensuring ‘careful handling’ of such goods. The US Department of Transportation (DOT) is considering additional actions to reduce air cargo hazards. It is perhaps concerning that industry groups remain opposed to more stringent rules covering packaging, size of battery shipments and training for workers handling lithium battery shipments due to the cost of special packaging and installation of advanced fire suppression systems on aircraft.
Please click here for full details of the FAA alert:
Of course, the experience encountered in air traffic is echoed in road, rail and sea transport. The Club has repeatedly called for increased rigour in relation to such dangerous goods and believes that safety in relation to a known danger should take clear precedence over cost. It is possibly also worth commenting that if fire suppression is viewed as ineffective for cargo aircraft, it is negligible for other modes of transport and generally reliant on more traditional fire fighting methodologies. The Club has previously drawn attention to the FireFoe product (see TT Talk Edition 115, 27 Jan 2009) that could successfully be applied to situations such as highlighted here.
For now the Club recommends that logistics operators and freight forwarders ensure the utmost safety is taken in account when transporting lithium batteries, particularly for airfreight shipments. In general, it is also recommended to ensure that packages or containers are segregated to the extent that if there is a fire it will not develop beyond the area of the batteries.
2. Evidencing security though the supply chain
A question was recently raised concerning rail carriers in the US changing seals without notifying the carrier. C-TPAT guidelines clearly state that seal integrity must be maintained during transit. Thus, any change should be fully recorded, including the reason. Furthermore, as highlighted in TT Talk 111, 12 Sep 2008, US Customs & Border Protection requires that all laden containers entering the US by sea must have seals that meet the ISO standard – being now 17712:2010, which was released in final form in September 2010.
If operators are faced with a situation where rail carriers are not following the guidelines set out below, it is recommended that these sub-contractors are reminded of the security requirements and required to set up a process to notify the carrier of any seal changes during transit. Any such notification should be retained for audit trail purposes.
Please click here for Quote from C-TPAT:
Container Security
Consolidators should ensure that all contracted service providers have procedures in place to maintain container integrity. Container integrity must be maintained to protect against the introduction of unauthorized material and/or persons. At point of stuffing, procedures must be in place to properly seal and maintain the integrity of the shipping containers. A high security seal must be affixed to all loaded C-TPAT importer containers bound for the U.S. All seals must meet or exceed the current PAS ISO 17712 standards for high security seals.
Container Inspection
Procedures must be in place to verify the physical integrity of the container structure prior to stuffing, to include the reliability of the locking mechanisms of the doors. A seven-point inspection process is recommended for all containers:
- Front wall
- Left side
- Right side
- Ceiling/Roof
- Inside/Outside doors
- Outside/Undercarriage
Container Seals
Written procedures must stipulate how seals are to be controlled and affixed to loaded containers. Procedures must be in place for recognizing and reporting compromised seals and/or containers to U.S. Customs and Border Protection or the appropriate foreign authority. Only designated employees should distribute container seals for integrity purposes.
As identified in the Club’s handbook on Supply Chain Security, implementation of ISO 28000:2007 by carriers – including rail carriers – would ensure that the issuance, validation and verification of seals would be recorded by the quality security management process. Thus, any seal security breach should be identifiable as occurring in a specific leg of the supply chain and it would be more difficult for unauthorised personnel to breach the containers without an indication of at least where the breach had taken place. Naturally, continuous improvement (under ISO 28000) would seek to eliminate this form of potential and actual breach in the medium term.
3. Aconcagua - sting in the tail
There have been a number of dramatic incidents at sea in the past two decades involving major fires and explosions on container ships, resulting in significant damage or even sinking, and crew injuries, sometimes fatal. These incidents have frequently been linked to the carriage of packaged dangerous goods and one particular substance has featured in many of them. Whilst it is the incidents and their immediate aftermath that grab the headlines, there is eventually often a legal judgment as to liability and one such judgment was recently published.
At about 0230 local time on 30 December 1998, an explosion took place in #3 hold of the ‘Aconcagua’, a 2,216 TEU container ship on a voyage off the coast of Ecuador. The fire caused the crew to abandon ship and widespread damage was caused to the ship and the cargo it was carrying. The cause of the explosion was the self-ignition of 334 kegs of Calcium Hypochlorite (CH) which were stowed in a container. Although widely used around the world to purify swimming pools and to provide potable water in emergency disaster areas, amongst other things, it has three UN Numbers allocated to it and is placed in class 5.1 (oxidising agents) of the IMDG Code. In particular, it is heat sensitive in the concentrated form in which it is shipped and care is needed in how it is packaged and stowed within the container, as well as where it is stowed on the ship. This consignment was UN 1748 and ‘its critical ambient temperature of decomposition may be as low as 60 degrees Celsius’. This meant that it was safe to be carried in containers and on or under deck in container ships.
This particular container was stowed in a hold next to a fuel tank and, as such bunkers have to be heated to enable the fuel to be used, the apparently inevitable happened and the CH exploded. The company that was both the time-charterer and the carrier under the bill of lading admitted negligence due to the incorrect stowage and made payments to the ship owner in settlement of the claims for damages arising from the explosion.
However, based upon expert evidence the court found things were somewhat different. At the time of loading of the ship in Busan, it was not the intention to use any of the fuel in the tank in question during that part of the voyage and it was only on 22 December that it was decided by the ship’s officers to heat the tank and transfer some of its fuel to a settling tank. The fuel was heated to and kept at 55 degrees Celsius. Even then, due to the level of fuel in the tank falling below the tank top by 25 December, the maximum temperature that the container would have been subjected to would have been in the high thirties Celsius.
It was concluded, therefore, that the fact that the CH self ignited and exploded was not due to it being stowed against the fuel tank and UN 1748 as declared should not normally have ignited at the temperatures experienced. That of itself indicated that the chemical may have been abnormal. In fact, tests carried out on samples indicated that the manufacturers of the chemical could on occasions produce CH with an abnormally low critical ambient temperature (CAT). Accordingly, the judge concluded that the CAT of the cargo shipped on ’Aconcagua’ was probably below 35 degrees Celsius and, had it not had an abnormally low CAT, the explosion would not have occurred. It was in effect a rogue material. Applying this conclusion to the relevant provisions meant that the charterer was entitled to an indemnity from the shipper for damage to the ship arising from the explosion.
Since 1998, and following further major incidents at sea, the form of packaging, the maximum weight contents of each package and the number of packages in a container have all been more closely specified by the IMDG Code. Regretfully, incidents still occur and shipping companies are increasingly and reluctantly deciding to refuse to carry this cargo.
The lessons of the final judgment on this incident are that manufacturers of CH must be much more careful in the quality of the product that they ship and at all times correctly classify and declare it. Shipping companies need to have well found systems for checking the declarations (CH has many different trade names) and for ensuring that any containers carrying CH are stowed in the most appropriate position in the ship.
The much wider implication is that shippers can be held to be responsible and liable for accidents at sea – which may leave freight forwarders and NVOCs exposed where recourse or enforcement against the actual shipper is not possible. Where a ship is badly damaged or even sunk, such liability can result in substantial damages and in this instance it amounted to more than USD27 million.
4. Conclusion
We hope that you will have found the above items interesting. If you would like to have further information about any of them, or have any comments you would like to make, please email us. We look forward to hearing from you.
Peregrine Storrs-Fox
Risk Management Director
TT Club
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