4
Containers
B ULK D ISTRIBUTOR
November/December 2019
Managing risk to prevent loss
H
ighly valuable insight into crucial
considerations for the management of
risk in the tank container supply chain was
on offer to delegates at a recent TT Club
seminar in London.
The packed room heard from a panel of industry
experts on a broad range of topics covering
developments and issues in this niche sector of the
supply chain from a range of stakeholder
perspectives. The seminar attracted over 80
delegates from all over Europe representing tank
container owners, operators and lessors, as well as
key service providers, lawyers and insurance
brokers.
Charles Fenton, CEO, TT Club opened with an
overview of the TT Club which celebrated its 50th
anniversary in 2018 with the publication of a white
paper ‘Brave New World’. The paper looks at the
future shape of the industry and the factors
playing out in the environment and how that
might impact on the businesses of members.
Fenton explained: “At the heart of the model is
how claims can be avoided. We have huge
amounts of data, experience and insight into the
tank container industry the analysis of which
enables us to assist our members in taking loss
prevention to the next level.”
Moving on to an overview of the current tank
container market Reg Lee, president of ITCO
highlighted the importance of the tank container
calling it “the ultimate in delivering door to door”
and emphasising the rapid growth in the number
of units over the past 20 years to today’s levels of
600,000 with 2018 production around the 60,000
mark.
Looking forward Lee continued: “I can see the
The packed room heard from a panel of industry experts on a broad range of topics
number of units reaching 1 million within 10 years
as the tank container represents one of the safest
ways of moving bulk cargo.”
However, he also issued caveats to this prediction
as he went on to express concern at the huge
growth in production in China. Driven initially by
the replacement of road tankers he fears this is
moving into oversupply with tank containers being
produced not for use but for sale. Lee also felt that
the rapid rise of single use plastics in the
shipments of bulk liquids in flexitanks raises
important considerations for the industry and
there is an increasing need for end use
certification.
“One of these plastic bags in a box is equivalent
to 7,000 supermarket carrier bags and at the end
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of their life they are either incinerated or end up in
landfill.”
Before ending, Lee highlighted a collaboration
between ITCO and EXIS technologies, a supplier of
IT systems for the management of dangerous
goods in sea transport, which enables ITCO to
offer a modular e-learning course providing
guidance on the safe and competent operation of
a tank container. This includes background
information on the tank container industry,
components of the tank and their use, regulations
appertaining to the tank, operating the tank and
depot services including inspection, cleaning,
repairs, and testing. As part of this investment in
the future of the industry ITCO have provided a
fully operational TC to Shanghai Maritime
University
Flaminia fallout
In a thought-provoking presentation the next
speaker, Peter Skoufalos, partner at Brown,
Gavalas and Fromm, delivered a fascinating first-
hand overview of the ‘MSC Flaminia’ litigation to
date, highlighting fundamental issues which tank
container operators should consider in their daily
operations.
Describing it as “A cautionary tale with lessons
to be learned”, Skoufalos outlined the vast scope
of the five year investigation with interested
parties including over 200 cargo owners as well as
the charterer, chemical manufacturers, NVOCCs,
tank container operators (TCOs) and freight
forwarders resulting in dozens of claims and
counter claims, 95 witnesses examined under oath
with depositions in multiple states and several
countries and 100s of expert reports. The cargo
claims were originally in excess of US$100 million
and eventually settled for around $65 million.
There were two significant decisions from the
court. The first was that the fire and explosion that
resulted in the deaths of three crew members were
caused by the runaway autopolymerisation of a
DVB cargo stored in one of the holds. The
conclusion was that the chemical was correctly
manufactured but adversely affected by a
combination of summer shipping, length of time
sat at the dock and high ambient temperatures. As
a result, the second finding of the court was that
the shipper of the DVB and its NVOCC/TCO bore
sole responsibility.
Skoufalos emphasised that, throughout the trial,
there were significant discovery burdens that TCOs
need to be aware of. “Record keeping is hugely
important,” he explained: “they will expect you to
document everything about the history of the
equipment, its usage, maintenance and vetting
processes as well as dangerous goods personnel
remits and training.”
Placing a huge emphasis on responsibility,
Skoufalos explained that, for operators involved
with DGs in the supply chain it is not sufficient to
do the minimum or assume that, because there
has never been an accident there is no need to do
more. “There must be meticulous attention to DG
MSC Flaminia - a cautionary tale with lessons to be learned
documentation preparation as well as clearly
documented remits for DG personnel and protocol
for middle management to ensure that the remits
are followed.
“TCOs need to ensure that the cargo they are
transporting are properly documented and that
the certifications are correct.”
He concluded: “In this increasingly litigious
world operators must be in a position to be able
to demonstrate to a judge that they have the
correct internal procedures, documented and
followed.”
Given that, Skoufalos believes that, due to the
increasing size of vessels, the Flaminia case may
one day be regarded as a small claim. These
lessons are ones that TCOs should not be
ignoring.
At the end of the morning, in the first of two
presentations from Brookes Bell, Dr Penelope
Cooke and Dr Ken Kirby looked at the issues
presented by the interaction between chemical
cargoes and TCs and the importance of correct
cargo classification. Emphasising the need for
consistent data sheets for all products regardless
as to whether they are hazardous or dangerous,
to enable operators to be informed with regard
the potential effect on the tank, this highlighted
an ongoing industry challenge. The lunch break
that followed was the perfect opportunity for
delegates to discuss this along with the other
industry issues already highlighted.
Risk exposure
The afternoon session started with an insightful
analysis of claims to highlight the top risk
exposures in the TC sector by Mike Yarwood, TT
Club which was followed by Chris Newton,
Partner at Keoghs.
Newton talked through the detail of a fictional
bodily injury claim based on the risks associated
with confined spaces to thoroughly explore the
potential consequences for the tank container
operator through HSE and police investigations.
The final presentation of the seminar, and the
second from Brookes Bell, took a close look at the
practical problems faced when tank containers
experience pitting. This is covered in more depth
on p8 of this issue.
The quality content presented by industry
experts proved to be invaluable with seminar
attendees discussing the issues raised long after
the presenters had finished.