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Vietnam’s Exploding Reefers

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Tue, 2011-11-08 22:01 — Kathy Gilbeaux

by Ben Bland - Financial Times - November 7, 2011

It is thanks to the seemingly seamless international shipping network that Americans can buy computers made in China, Europeans can enjoy Argentine steak and people from all over the world can sustain themselves with rice, fish and coffee produced in Vietnam.

But the ease of transporting the humble twenty-foot container around the world means that problematic cargo in one port can swiftly become a global problem, as with a recent spate of exploding refrigerated containers traced to Vietnam. 

From April to October, four refrigerated containers or “reefers” – used to transport fresh produce like seafood – that were repaired in Vietnam have exploded in Brazil, China and Vietnam, killing three port workers. The accidents have forced international shipping lines to take more than 1,000 reefers out of service and prompted stevedores in the US ports of Oakland and Seattle to refuse to unload containers from Vietnam.

Three of the explosions occurred in containers owned by Denmark’s Maersk, the world’s biggest container shipping company, and one in a reefer owned by France’s CMA CGM.

Both companies say the cause of the explosions remains a mystery. But Peter Smidt-Nielsen, general director of Maersk in Vietnam, suspects that it stems from contaminated gas that was put into the reefers’ cooling units in Vietnam between 30 March and 25 April, when a number of containers were repaired at Ho Chi Minh City’s Saigon New Port.

Smidt-Nielsen tells beyondbrics that the situation is “very unusual” although he knows of one similar case in the 1980s and another in the 1990s.

Maersk has grounded 844 of it 230,000 reefers until it has completed an investigation, while CMA CGM has grounded 332 and Singapore-based-APL has grounded around 100 as a precaution while insisting its containers are safe. Saigon New Port said it was also investigating the problem.

The Pacific Maritime Association, which negotiates labour contracts between dock-workers and shipping companies, said:

North American-based shipping industry officials, in conjunction with governmental agencies including the United States Coast Guard, have conducted a comprehensive review to determine the source of the problem and isolate and repair at-risk containers.

Smidt-Nielsen says no major shipping lines will undertake gas repairs to their reefers in Vietnam until they know the cause of the problem but that the situation now appears to be under control.

While Maersk’s trade volumes have not been affected, he says that some shipping lines have stopped taking reefers from Vietnam, possibly because of resistance from dock-workers in the US.

According to Saigon New Port, this has led to transportation delays and higher shipping costs, causing a “serious negative impact” on Vietnamese seafood exports, one of the country’s key sources of foreign exchange. The US is a major market for Vietnamese seafood and this is the peak season for seafood exports, a spokeswoman for the port said.

With Vietnam’s ports already suffering from congestion, power cuts and poor connecting infrastructure, this export-dependent nation could do without another problem like this.

So could shipping companies, which are already battling falling profits because of the darkening global economic outlook.

Coming after major disruptions to international car and electronics manufacturers from natural disasters in Thailand and Japan, it is another reminder of the fragilities of the global production and transport systems.

http://blogs.ft.com/beyond-brics/2011/11/07/vietnams-exploding-reefers/#axzz1d2zvBsYJ

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Tue, 2011-11-08 22:29 — Kathy Gilbeaux

by Harry Bradford - The Huffington Post - November 2, 2011

Reefers are causing a worldwide panic, but not the kind most would expect.

Ports in western Washington state and Oakland, California are stepping up safety procedures after multiple reefers -- or refrigerated shipping cars -- exploded in Vietnam and Brazil, killing a total of three dockworkers, MSNBC reports. Faulty coolant likely caused the explosions; the bad coolant is in use in up to 8,000 container cars that have undergone maintenance in Vietnam since February.

Demand for those containers can often be a barometer of trade activity. A rebound in global trade earlier this year pushed shipping firms to rely increasingly on companies that lease the containers, Bloomberg reports. Steel cargo box demand may see an 11 percent boost this year.

Even with the estimated rise in demand for containers, some port workers in Oakland are refusing to work out of fear that more reefers will explode. Still, a representative from Maersk Line, the shipping company whose reefers blew up, says "necessary precautions [have been taken] to avoid further incidents," freight news outlet IFW reports.

However, Chris Peeler, a member of the Labor Relations Committee of the International Longshore and Warehouse Union in Seattle told MSNBC, that, so far, experts "cannot pinpoint the problem."

Though the reefers may be giving the shipping industry some trouble right now, since its advent in World War II, containerization has made the shipping process safer and more efficient. A 2001 report from the International Organization for Standardization, the governing body responsible for standardizing the containers, estimated that containerization has reduced the cost and time required to move goods globally by 35 and 84 percent, respectively.

The same report hailed containerization for its "enormous improvements in the safety and health of transportation workers" who'd previously played a much more hands-on and hazardous roles in the movement of goods. But, potential risks remain due to the high volume of goods that are often hidden inside the containers.

Last year Italy experienced the worst radiologic incident in its history when a container car arriving in the port city of Genoa was found to have startlingly high levels of radiation emitting from it, according to Wired. After spending hundreds of thousands of dollars, officials determined that the source of the radiation was a "pencil-like cylinder" of radioactive cobalt-60, which was once part of a machine used to sterilize food and eventually made its way to a Saudi Arabian scrap metal yard, and then was inexplicably included in a shipment of more than 22-tons of copper wire.

The incident highlighted concerns over the potential use of reefers by terrorists, Wired reports, and currently the Department of Homeland Security says that 99 percent of incoming cargo is scanned for radiation.

Still, some shipping risks may simply come with the territory. Earlier this month at least 6 tankers carrying the flammable chemical ethanol exploded when a freight train derailed in Tiskilwa, Illinois. Likewise a cargo ship named Rena remains stranded after running aground on a reef in New Zealand on October 5th, leaking about 385 tons of oil into ocean to date.

http://www.huffingtonpost.com/2011/11/02/containerization-hazards-8000-refrigerated-shipping-cars-exploding_n_1072100.html?ref=business

Tue, 2011-11-08 22:47 — Kathy Gilbeaux

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