Canadian Shipper


Tip of the iceberg

First the good news: shipping got safer last year, with vessel losses down 16 per cent from 2015 to 85 ships lost, the lowest number in the past decade. The statistics from insurance provider Allianz Global also show a four per cent decline in casualties from 2015.

Regrettably the drop in losses and casualties does not imply an improvement in safety when it comes to dangerous goods. According to Peregrine Storrs-Fox, director of risk management at cargo insurance specialist TT Club, about five to 10 per cent of all cargo carried on ocean vessels is hazardous, but between one-third and one-half of all incidents of reported cargo damage have a cause that involves dangerous goods.

He notes that this year has not produced dramatic calamities at ports caused by hazardous materials, such as the explosions at the port of Tianjin in 2015 that killed 173 people and injured hundreds more, but a number of fires have been reported this year from ports that have been attributed to such cargo. He calls each of them a near miss that had the potential to spark a major incident.

“Sadly, we have seen the same trend as in the last three decades,” he says, pointing out that nearly two-thirds of cargo damages involved issues with the preparation process—from documentation to packaging. “Not much has changed, which is galling, given the availability of information that is out there.”

All too often hazardous shipments are not identified as such by the shippers, be it out of ignorance or with intent. “Dangerous goods that are concealed are a big problem in the industry,” says Robert Monette, general manager of Dangerous Goods Packing Service. He recalls cases where motorcycles that were to be shipped had dangerous substances stuffed in the saddlebags. Most operators agree that the majority of the problems that have arisen from dangerous goods sprang from the fact that shipments had not been declared properly and packed without observing the proper guidelines.

Barb Johnston, manager of operational programs for Air Canada Cargo, confirms that most of the problems stem from the shippers’ side. “Our forwarders are professionals, for the most part they have this knowledge and are respectful of the requirements. It is at the shipper level that there needs to be better understanding of the risks that surround certain commodities, and what needs to be done, such as proper packaging and declarations, to ensure safety is maintained,” she remarks.

The rapid growth of e-commerce has drastically augmented this problem. “E-commerce is a very big concern,” says Barbara Foster, senior regulatory consultant at ICC Compliance Center, which runs the air cargo training program for CIFFA, the Canadian forwarders association. “Amazon at least is a corporate entity, with eBay you have a lot of private individuals. Most of them have no idea what a dangerous goods regulation is.”

Much attention has focused on lithium-ion batteries, especially after the formal investigation into the fatal crash of a UPS freighter in 2010 established that the aircraft crashed shortly after take-off because of a fire caused by lithium batteries. This led to a subsequent ban of lithium-ion batteries on passenger aircraft.

Monette notes that this ban has created serious challenges. “If you try to ship lithium batteries to the Bahamas, you need to truck them to Miami. There you can catch a cargo plane that flies to the Bahamas three times a week,” he says.

Dangerous Good Packing Service was involved in the recall of the Samsung Galaxy 7 last year. The company handled over 20,000 boxes, all of which had to be re-packaged. It consolidated that traffic in Toronto and shipped it by ocean. “It took us two months,” recalls Monette.

The ban on lithium-ion batteries on passenger aircraft notwithstanding, Foster finds that the industry has not really got a handle on how to control this issue. “This is probably going to be the biggest topic for the foreseeable future,” she reflects.

While much e-commerce moves in express networks, forwarders bundle such traffic and send it to international destinations in consolidations, which are broken down and fed into last-mile delivery networks on the other end. TT Club has seen a limited number of incidents with hazardous materials in consolidations, which were mostly related to e-commerce, reports Storrs-Fox.

Air mail has been another cause for concern there. “All other items sent via the post are a concern primarily because the shippers may simply not be aware of the risks of certain commodities during transport, and there is no mechanism for the carrier to know what is being flown,” comments Johnston. She adds that Transport Canada may introduce enhanced security regulations surrounding postal traffic in the near future, a drive that Air Canada Cargo would support.

Storrs-Fox notes that screening technology has made significant strides forward and is getting closer to capabilities that not only show the contents of a container but also how they are packed.

“This is not going to be there tomorrow, but within the next decade,” he adds.

In the meantime, much hinges on the frontline staff of airlines, express companies and forwarders. Purolator Courier does not accept hazardous materials from walk-in clients, but it does move dangerous goods in nine different categories. The company has over 400 dangerous goods specialists across its network, but its front-end employees who deal with customers play a crucial role. “Any employee who touches a package requires dangerous goods awareness training,” says Brian Cassidy, director of environment, health and safety.

The training courses that ICC runs for CIFFA’s air cargo dangerous goods program are designed primarily for forwarders, but shippers are also welcome. The standard course consists of an introduction module that lasts one day, followed by the two-day core course. For those who require it, there is also an added one-day course on radioactive materials.

Forster sees some changes on the horizon there. Transport Canada and the International Civil Aviation Organisation are working on new rules that will move to competence-based training. This means that employees must be familiar not only of the legal requirements but also of their own company’s system. “Simply going to a course is not going to be enough,” she says.

Monette reckons that training will remain an ongoing concern, not only because regulations get updated, but also because of staff turnover. “Young people come in and only stay two years before they move on, so you constantly train new people,” he says.

For its part, TT Club has joined forces with global liner and shipper organizations to push cargo integrity, with the code of practice for packing cargo transport units at the core. In the near-term Storrs-Fox does not anticipate any financial pressure from the insurance industry for greater compliance through raised premiums. An influx of capital into the insurance sector, coupled with cost pressures on shippers that prompts them to try and reduce their spend on insurance, means that premiums are unlikely to rise dramatically, he points out.

For the foreseeable future, the emphasis will remain on raising awareness of the issues with shippers and promoting training.

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