TT Talk – Containers: trading risks

In the latest edition of TT Talk from UK-based provider of insurance and related risk management services TT Club, the club noted that that, visionary though Malcom Mclean was, he could hardly have foreseen the extraordinarily varied uses to which containers are increasingly being put.

The Club said that, apart from being a core tool for trade, the ‘humble box’ had become something of an architectural icon.

Companies involved in container buying and selling for transport must comply with relevant regulations. Container safety is regulated by the International Maritime Organization (IMO) through the International Convention for Safe Containers, as amended (CSC). When containers are traded, the responsibility of meeting CSC regulations transfers from the seller to the buyer.

Since traded containers are almost invariably nearing the end of their life, TT Club said that it was especially important to ensure they were in safe condition. CSC specifies the responsibilities of the different parties involved in the safe condition of containers, but also requires the administration of an approved periodic examination scheme by the country where the container owner is registered.

Recognizing the need for clarity to help both the seller and the buyer of a traded container meet the regulations and carry out the required tasks correctly, the Container Traders & Innovators Association (CTIA) has recently published three guidelines; on container ‘neutralization’, re-marking and grading.

Neutralization is the process of removing or obliterating markings that identify the name and other details relating to the seller of a container. The purpose is to relieve the seller (the container owner disposing of the unit) of potential exposures that might result from any former identification marking after the sale is completed. The CTIA’s guidelines cover the recommended procedures to ensure correct neutralization of shipping containers, indicating the minimum markings to be removed in order to facilitate efficient re-marking. Re-

After it has been neutralized, a container might need to be re-marked. A second CTIA guidance document sets out the correct process of reinstating the container markings, including the display of a valid CSC safety plate.

Those containers that are sold out of the shipping market can be used for a wide range of applications, including static storage or modification into offices, retail units or housing.  Traders grade containers to indicate the purpose to which they might be suited. The third new publication from CTIA provides standardized grading terminology, which enables a trader to evaluate the container by its descriptive grading code and assess its suitability for a particular purpose.

The CTIA was established in January 2017 to provide a service for industry professionals involved in buying, selling, trading or modifying shipping containers. It seeks to provide a platform to create industry guidelines and codes, together with a range of technical, marketing and industry data.

The CTIA said that there was a significant potential for the ‘secondary’ container market. “While containers may continue to be used in international trade, for example for one-way project cargo shipments, others are used successfully for innovative non-transport purposes, such as storage, retail units or offices, and accommodation. “