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What is Damaged Cargo and How to Prevent and Handle It

There are so many different parties handling full container cargo during the shipment process, from the overseas factory until it is delivered to the final receiving point at destination.

On a typical international full container shipping route, below are the parties that may physically handle cargo:

  • The supplier/factory which loads the cargo.
  • The local trucker that delivers the cargo to a local warehouse.
  • The local dray company that moves the cargo from the warehouse to terminal.
  • The origin terminal.
  • The transshipment terminal.
  • The arrival port terminal.
  • The customs or customs warehouse (if there is any customs hold).
  • The local trucker at the arriving port for final delivery.

Moreover, during an ocean voyage and turbulent waters, if cargo is not secured properly, it will shift.

The most common reasons for cargo damage are water damage, impacts that the container took, and damages due to improper lashing and stuffing.

Water damage may occur due to the below reasons:

1. Condensation inside a container, especially if the container is being stuffed at high humidity temperatures.
2. Temperature changes during the voyage of the vessel may also increase the condensation inside the container, which may cause the cargo to get wet.
3. Water may get inside the container if there are any small holes on it, especially during the voyage if a vessel encounters inclement weather conditions.

Improper lashing and stuffing:

Extremely heavy cargo and uneven weight distribution, improper loading of the pallets, and poor lashing are some of the reasons for cargo damage depending on the cargo type, weight, and pieces. There are so many details when it comes to how to properly stuff a container and properly lash the cargo.

When the container is received at the warehouse, a thorough inspection is needed. Check if there is any visible damage to the container from outside. Once the unloading starts, if there is any visible damage to the cargo, stop the unloading process immediately and notify your carrier and your insurance company, if the cargo is insured.

Your carrier might decide to send a surveyor to jointly unload the cargo if there is extensive damage is reported initially.

In order to claim the damage from your carrier, you will need to send the following documents to the carrier:

  • First Notice of Intent to Claim
  • Survey Report (If there is any independent survey report with photos, or if any survey was conducted for and on behalf of cargo interest.)
  • Photos
  • Shipper’s Commercial Invoice
  • Detailed Claim Statement (The calculation of the loss, based on the commercial value of the cargo.)
  • Packing List
  • Delivery Receipt
  • Container Destuffing Tally Sheet
  • Proof of Salvage Value/Independent Destruction Certificate (To prove the cargo is indeed damaged and can be sold on a secondhand market.)

The carrier will review the claim and they will determine where the damage might have occurred.

If the damage occurs when the cargo is under the responsibility of the ocean carrier, they will determine a claim amount and send a claim settlement letter to finalize the claim. However, if it is determined that damage may have occurred due to other reasons, such as improper stuffing, then they would deny it if they are not the party that stuffed the container. In this case you will need to file the claim with other parties.

Also, shippers or other stakeholders that are involved with the loading the containers must be educated on the below details:

  •  The space utilization must be carefully checked for palletized cargo, and if there are any empty spaces between pallets, they need to be filled with airbags or other means of fillers.
  •  The distribution of the weight inside the container needs to be even.
  •  Loading heavier items on the side or at one end of the container must be avoided.
  •  Stow the lighter items on top of the heavier items and avoid stuffing any loose item, and pack the cargo as tight as possible.

In average it takes about 3 to 6 months to finalize a damaged cargo claim.

In order to protect yourself from the risks of damage, obtain cargo insurance for each container, follow simple and basic stuffing rules, and more importantly work, with a reliable carrier who would take responsibility for any issues.

Serkan Kavas
Serkan Kavashttps://www.mts-logistics.com
Serkan Kavas was born and raised in Turkey. He graduated from Dokuz Eylul University with a Degree in Business Administration in 2001. He had an internship in Germany at a major industrial company after college. He worked at their family business in Turkey and managed their exports from Turkey to Europe. He moved to the U.S. to continue his education in New York and obtained his MBA degree with International Business concentration at New York Institute of Technology in 2005. After graduation he was recruited by MTS Logistics and he has been working at the company since 2005. Serkan worked his way up from the entry level to operations manager and to his current position as our VP of Imports at MTS Logistics. He wears different hats daily with different responsibilities. He has vast knowledge, experience, and understanding of all aspects of logistics, freight, and the supply chain. His focus now is to help develop our import department and help our company move forward.
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