æCharm offensiveÆ
ITCO campaigns against negative perceptions of ISO tank containers.
By Chris Gillis
Perhaps the most misunderstood ocean container in the world fleet is the tank.
It's not because of any significant safety concerns with the unit. The reason, the International Tank Container Organization believes, is more superficial than that.
'When the carriers see an ISO tank, their first thought is that it must be hazardous and should be avoided,' said Reginald Lee, a former tank container executive and ITCO president. 'Actually, only about 40 percent of the products transported in these tanks is hazardous.'
The tank container, designed to fit into a conventional 20-foot dry cargo container frame, has served a number of shippers globally for 35 years. In addition to chemicals for manufacturing, these tanks have facilitated the transport of thousands of gallons of bulk liquid food and beverage commodities, such as wines and spirits, and vegetable oils.
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| Reginald Lee president, International Tank Container Organization |
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| 'When the carriers see an ISO tank their first thought is that it must be hazardous and should be avoided. Actually, only about 40 percent of the products transported in these tanks is hazaradous.' | |
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ITCO believes the image problem is rooted in the demise of direct liner carrier control over the tank containers themselves. When the carriers operated their own dedicated tank container fleets, they employed dangerous goods experts who served as the key reference point in the company for all bookings of shipments listed in the International Maritime Dangerous Goods (IMDG) Code. The carriers lost this expertise when the tank container fleet was taken over by third-party operators, ITCO said.
While it's highly unlikely that the liner carriers will ever again control the tank container fleet, ITCO said its role is to convert an ugly duckling into a prized piece of transportation equipment by going on a campaign dubbed as the 'charm offensive.' The organization said its goal in 2009 is to 'reinstate a degree of tank container understanding amongst the container shipping lines.'
In mid-May, ITCO officially released a document at the Transport Logistics conference in Munich to the leading shipping lines explaining the nature of tanks in the context of shipping operations, 'with the key personnel responsible for such bookings being the target audience.'
Global Presence. ITCO estimates that there are about 150,000 ISO tanks engaged in the deep-sea trades. The fleet is largely controlled by specialized operators, such as Stolt Tank Containers, VOTG Tanktainer, Hoyer Global Transport, and Intermodal Tank Transport; and lessors, including Eurotainer, Exsif Worldwide and GE SeaCo Services.
ITCO insists that tank containers, which cost in the range of $17,000 to $25,000 apiece depending on their construction and purpose, provide liner carriers with good paying business, several thousands of dollars above current dry box rates.
'Assuming 4.5 movements per annum for each of those 150,000 tanks, this business represents 675,000 annual movements, even before the repositioning of some empties attendant on such business is taken into account,' the organization said.
Traditionally, one of the most common trade patterns is the U.S./Europe/Japan routing. Tank containers help to move chemical shipments between companies' international plants and between different manufacturers. Other markets have opened in recent years for U.S. and European chemical shippers to China, South America and Africa.
For shippers, ITCO points out that it's generally 20 percent to 30 percent cheaper to ship parcel liquid bulk shipments by tank container than containerloads of drums.
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Some shippers maintain small pools of tank containers. While reasons may vary, several important factors in the decision for a shipper to own and operate a tank container pool include the values and properties of certain chemicals, special tank lining requirements, and risks associated with contamination.
For example, FMC Corp. maintains two leased fleets of tank containers of about 23 units each specifically for the transport of hydrogen peroxide. While normal grades of peroxide are shipped in the company's stainless steel tank containers, the highly purified product is shipped in Teflon-lined units.
Gregory Nikiper, export logistics manager for FMC's Chemical Products Group, said it's not always easy dealing with the carriers to have the company's empties returned. 'There are no guarantees that they'll get on the ship you initially booked. Often extra calls to the carriers are required,' he said.
However, many shippers prefer to let third-party operators in the form of trip leases manage the actual transportation logistics of tank containers with the liner carriers.
'The reason we don't own tank containers is because we can't load them back,' said David Faller, director of logistics for Jim Beam Brands. The bourbon maker ships about 400 tank containers of its product to Australia annually from its distillery in Clermont, Ky., and plans to ship another 200 tanks to Germany starting next year.
Faller said in some years it's more difficult to get tank containers delivered efficiently to Clermont for loading. 'Fortunately, we have more available to us at the moment,' he said.
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| Jim Beam in Kentucky loads 20-foot tank containers with bourbon for shipping to Australia. |
Jim Beam relies on three tank container providers to serve its Australian business. 'One provider couldn't handle it all,' Faller said. 'With the Germany volume, we'll have to add a fourth player.'
Tony De Santis, executive director of the U.S. Shippers Association, said the relationships between tank container shippers, logistics providers and liner carriers are extremely tight, making it nearly impossible for a shippers' association to negotiate tank container service contracts on behalf of its shipper members.
'The shippers have their favorite people and they want it to stay that way,' De Santis said. 'We don't arrange contracts for tanks anymore. Our members do their own.'
Safety First. When it comes to transporting tank containers, safety is on the forefront of the minds of both shippers and carriers.
'For the most part they're fine,' said Capt. James McNamara, president of the New York-based National Cargo Bureau, which on behalf of the U.S. Coast Guard conducts inspections and surveys that are incidental to the loading or discharging of cargo ships. 'If they're properly maintained and inspected at each use, there shouldn't be a problem.'
However, McNamara warned that tank containers are 'very susceptible to damage.'
There have been some incidents in the past three years that have raised concerns about the safety of tank container transportation. 'Although none of the incidents involved the loss of a tank's contents, valve leakages and tank top working accidents have resulted in injuries to personnel,' ITCO said.
The biggest safety risks are to those firms that manage the cleaning of tank containers. Workers must be extremely careful about the potential exposure to harmful residues and vapors. 'Tanks are most dangerous when they're empty,' Lee said.
During the past two years, ITCO has worked with the International Cargo Handling and Coordination Association to prepare the Safe Handling of Tank Containers document. The 60-page document includes 14 illustrated chapters and six annexes.
'The pamphlet embraces the good working practices that have been developed by the tank container industry over the past four decades and is made available to assist newcomers to this rapidly expanding transport sector in becoming familiar with the necessary 'dos' and 'don'ts' of tank handling,' ITCO said.
ITCO said the document also serves as a 'refresher' for long-time industry professionals and points out potential safety issues not encountered during the normal course of business.
Bill Bassington of ETS Consulting, who compiled the Safe Handling of Tank Containers document, warned that a laden tank container can be the heaviest of intermodal containers and a lack of awareness of correct filling levels can result in 'dangerous cargo surge effects.' Tank containers must also be stacked and stowed accordingly to prevent safety hazards.
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| De Santis |
Tank containers must be filled to a minimum of 80 percent and no more than 97 percent, depending on the characteristics of the products, such as vapor expansion.
China has become the biggest producer of tank containers as well as a user of this form of transport in recent years. In response, ITCO partnered with the Shanghai Maritime University late last year to conduct a study into proper handling of tank containers in China.
'In Europe we had a long battle to shift the industry away from exclusively using drums to tanks,' Lee said. 'In China, they're going straight to tank containers.'
Earlier this year, a questionnaire in both Chinese and English was sent to ITCO members and another will go out to a select group of chemical shippers in the Chinese market. ITCO also plans to arrange meetings with the various ports, terminals, railways and government departments to obtain information on their services and capabilities.
The organization expects to complete the study by the end of 2009. 'Our goal with the study results is to give Chinese tank container users 20 years of safe handling experience,' Lee said.
Environment. ITCO believes one of the most understated, yet positive attributes of tank container transport is the minimal environmental impact when compared to steel drums in containers.
'The disparities are stark,' ITCO said. A 20-foot freight container can carry 80 drums of 200 liters each, or 16,000 liters in total, while a 20-foot tank can carry 24,000 to 25,000 liters depending on the road weight restrictions and density of the product to be carried, the organization explained. There's also the issue of drum disposal or recycling.
To back its claims, ITCO commissioned an independent study with U.K.-based LCP Consulting. The firm used its Carbon-to-Serve program to evaluate the complete tank container supply chain's impact on the environment, from manufacture and materials to positioning and handling operations, cleaning, land and sea transits, port equipment, empty moves, roundtrip potential, life cycles, recycling and ultimate disposal, versus alternative forms of bulk liquid transport, including drums and flexitanks.
The study involved the transport of non-hazardous liquids in a tank container, compared to similar volumes loaded in a flexitank and drums stowed in 20-foot dry boxes, from the Shanghai region to Germany's Ruhr Valley, including return legs both empty and full. Also factored into the study were the carbon impacts of incinerating the plastic flexitank and the lifespan of both the tank container and dry box.
The Carbon-to-Serve analysis tool, which was developed by LCP Consulting, captured emissions data at every point in the supply chain. LCP Consulting generally uses data published by the U.K. government's Department of Environment, Food and Regional Affairs. This data is commonly expressed in terms of CO2/ton kilometer carried, explained Alan Braithwaite, chairman and founder of LCP Consulting.
The study concluded that the tank container and flexitanks were far superior to drums in terms of carbon emissions. 'An equivalent and more tangible measure is that the carbon creation for the tank container is about the same as driving two economy class cars to Shanghai and back,' Braithwaite wrote.
The biggest sources of carbon emissions in the supply chain are the vessels, rather than the cargo transport conveyances, such as tank containers. 'Operators and shippers should be most concerned going forward with the specific emissions credentials of their carriers, the routings used and the return load balancing; these factors offer major opportunities to contain or reduce emissions,' Braithwiate said.
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| Braithwiate |
Braithwiate warned that the 'tank container industry will not be immune to either the financial penalties of future emissions nor the obligations of corporate social responsibility.'
ITCO's Lee said the LCP Consulting study findings confirmed the organization's belief that tank containers offer the most environmentally beneficial way to transport liquid bulk commodities, when compared to flexitanks and drums. 'This study was a way for us to demonstrate to the chemical industry our commitment to improving the environment and paving a way to a greener business,' Lee said.