| Written by Elisa Rouhiainen

Container damage is an ongoing challenge in the hustle and bustle of global trade. This damage can have a significant financial impact, disrupt supply chains and pose a security risk.

Therefore, it is crucial for the actors involved to understand the causes and consequences of the damage and to pursue remedial strategies. The key is to speak a common language called container damage codes.

This post gives you an overview of container damage causes and the corresponding codes.

container damage codes

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Standard shipping containers are designed to last approximately 10 to 15 years under regular use. This includes exposure to changing weather conditions, as well as handling and transport stresses.

If the containers are properly maintained and professionally repaired in the event of damage, they can even be used for significantly longer, up to several decades. Regular inspections and timely repairs can address common problems such as corrosion, dents and structural wear.

How long a container lasts depends on various factors. Firstly, the quality of the construction and the materials used are ideally corrosion-resistant. If a container is used in high-frequency transport, the risk of damage is higher than with containers with more standing time. Rough sea conditions, extreme temperatures or pollutants detract from good conditions, while more harmless conditions promote longevity.

As with other equipment, the lifespan can be significantly extended through regular maintenance, including cleaning, rust protection, repainting if necessary, and timely repair of minor damage. Correct handling during loading, unloading and transport also naturally influences the prevention of damage and the reduction of wear and tear (read also about unreported container damage).

According to Freightwaves, "One out of four containers that pass through US ports gets damaged at some interchange points." (Source: https://www.container-xchange.com/blog/container-damage/)

This makes it all the more important to understand the reasons and types of damage to be able to work on preventing it:

 

Main Container Damage Causes

Even though containers can withstand a lot, handling them requires sensitivity. If cranes and container handling equipment (CHE) are used improperly, malfunctions or collisions can lead to damage. According to the CC Club, along with packaging errors, poor handling accounts for 65% of their claims. The AGCS Safety & Shipping Review 2020 even names improper handling during loading and unloading as the leading cause of container damage.

Poor handling applies to loading and unloading ships and trucks and stacking. Improper container stacking, including overloading or improper weight distribution, can cause containers to collapse or shift during transportation or storage.

Since many different vehicles are on the site and the high container piles in the yard often allow only very limited visibility, collisions are quite common. Between 2017 and 2019, the Port of Los Angeles recorded approximately 500 incidents involving container handling equipment, resulting in damage to containers. APM Terminals had over 1,200 incidents in 2019 alone across all its terminals worldwide.

Human error, such as mislabeling or miscommunication, can also cause problems. Since everything takes place outdoors and often in a very harsh environment, weather conditions also play a role. For example, storms can displace containers, fall over, or suffer water damage. Ports in areas exposed to extreme weather conditions are particularly at risk.

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Common Damages in Shipping Containers

Structural Damage

Dents and dents are common. If they are small, they may not affect functionality at all, but more significant deformations can compromise the container's structural integrity. 

Cracks and splits can result in cargo being exposed to the elements or pests. If there are structural cracks, the stability of the container can be at risk.

Containers can become twisted or distorted if handled or stacked improperly. For example, the doors may no longer open, or the containers may no longer be stacked properly.

Corrosion and Rust

While surface rust may be unsightly, it usually isn't a major problem - if it's caught and treated early. However, if the rust penetrates deeply and weakens the metal, it can lead to holes and structural issues.

The paint and protective coatings protect the container from rust and corrosion. As with the rust, smaller chipped areas are relatively easy. However, if nothing is done for a long time, the metal can be exposed to the elements, and corrosion can be accelerated.

Door and Lock Issues

If the doors are misaligned, they can be difficult to open and close. This endangers the security of the container, as do defective locks and latches. It is advisable to intervene immediately to prevent unauthorised access or theft.

Floor damage

The wooden or metal floors can wear out over time due to the often hefty loads. Cracks, rot and deep grooves endanger not only the container and its cargo but also the people loading and unloading it.

Water Damage

If containers are exposed to heavy rain or flooding, water can seep in and cause rot on wooden floors or corrosion on metal floors. The same danger exists if there is damage to the roof and walls of the container.

Corner Castings and Fittings

The corner fittings are the key to lifting and securing. If they are damaged, it may be that the container can no longer be handled with the intended equipment. In addition, safety and stability may no longer be guaranteed during transport.

Internal Damage

Containers used to transport delicate goods may have special interior liners that can be damaged by improper loading or sharp objects.

Contamination and infestation

If hazardous substances leak from their packaging, this can lead to contamination. The container must at least be cleaned very thoroughly, but it may also have become fundamentally unusable for further use.

The same applies to infestation. Depending on its extent and type (vermin or, for example, fungal infestation), an expert must also assess whether cleaning is sufficient or whether the container needs to be closed for further use.

So, many different damages can occur in different parts of the container. They have accompanied the shipping container since the beginning. However, while a variety of terms were initially in circulation, with the global triumph of containerisation, it became increasingly important and urgent to use uniform terms. Various stakeholders tried to achieve standardisation and created the Container Damage Codes.

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The History and Evolution of Container Damage Codes

Container damage codes are standardised identifiers used to describe and document damage to transport containers. The concept of codes was developed with the expansion of world trade out of the need to be able to communicate efficiently and consistently about the status of containers.

In the early days of containerisation in the 1950s and 1960s, there was little standardisation in reporting container damage. Each shipping company had its own terminology and method for recording damages, often leading to confusion and inefficiency. The need for standardised terms and codes has become particularly evident with the global deployment of containers, spanning borders, multiple jurisdictions, and multiple stakeholders.

The International Organisation for Standardisation (ISO) played a crucial role in the development of standardised codes. Together with the International Maritime Organization (IMO) and the Institute of International Container Lessors (IICL), the details for the ISO 9897 standard for standard containers and reefer containers were drafted. In particular, the IICL developed detailed guidelines for container inspection and damage documentation.

Collaboration with key stakeholders

Shipping companies

Major shipping companies have been instrumental in efforts to establish standardised codes to improve operational efficiency and reduce disputes over damage assessments.

Container leasing company

For companies leasing containers, a standardised system was essential to manage their fleets and ensure consistent damage reporting across different lessees and jurisdictions.

Port Authorities and Terminal Operators

Ports and terminals worldwide, large and small, need a common language to report and manage container damage.

Insurance Companies

Insurers must be able to rely on standardised methods for assessing claims. Accurate and consistent assessments must be ensured in order to render the claims process generally valid and optimised.

Regulatory Bodies

International regulatory bodies, such as the ISO as mentioned above, IMO and IICL, facilitated the development and implementation of global standards to ensure uniformity and compliance across the industry.

Relevant Context

To fully appreciate the significance of container damage codes, it is essential to understand the context in which they were developed:

Global trade expansion

The exponential growth of world trade in the second half of the 20th century required more efficient logistics and transportation systems. Standardised damage codes were part of this broader push for efficiency and reliability.

Technological advances

The ever-increasing development of technologies used in container ports, such as the development of tracking systems and computerised inventory management, has led to a need for standardised forms of data. Of course, this also applies to the damage codes so that they can be processed and analysed automatically.

Operational Efficiency

Standards help streamline processes. They reduce ambiguity when reporting damage and shorten the lead times for container repairs. In addition, greater clarity helps reduce disputes between shippers, senders, recipients and insurers.

Regulatory compliance

International maritime safety and environmental regulations often contain provisions on the integrity and maintenance of containers. Standardised damage reports ensure compliance with these regulations by providing a clear and consistent framework.

Environmental and Safety Concerns

Proper documentation, regular maintenance, and timely repair of containers are essential for both maintaining safety standards and preventing environmental hazards such as the release of pollutants from damaged containers.

Thanks to the collaborative efforts of shipping lines, container owners, regulators and other key stakeholders, container damage regulations have evolved from a patchwork of company-specific practices to a globally standardised system. Their implementation has significantly improved the efficiency and safety of international container shipping.

 

The Present and Future of Container Damage Codes

Today, container damage standards are generally accepted. The ISO 9897 standard provides a robust framework for classifying and reporting damage.

The logistics industry is undergoing a digital transformation, with more and more advanced technologies being integrated into container management. For example, damage to containers is recorded and exchanged in real-time to ensure transparency and traceability. Unthinkable without a uniform categorisation.

Regulators update their policies to incorporate new standards and practices. For example, the requirements for reporting and dealing with container damage have been adapted to meet the latest safety and environmental needs. Here, too, a uniform understanding of the naming of the damage parameters is essential.

Automated Damage Detection

The new technologies used to record and analyse damage create a central need for standardisation. These systems can only develop their full efficiency with a common language.

Using sensors and cameras, artificial intelligence (AI) and machine learning algorithms can detect damage to containers and automatically assign them the appropriate damage codes. 

Internet of Things (IoT) devices can identify shocks and trigger an alarm. The internationally valid code for this can be recorded in the digital systems: C - Collision or contact with another object.

Optical character recognition (OCR) technology can recognise more than its name suggests. She is already recording damage to containers, taking photos of them and storing them in databases for later damage reporting. In the future, more and more drones will be used in addition to stationary cameras.

Also, with the increasing use of autonomous vehicles in the future, the integration of container damage codes into these systems will be crucial. Autonomous systems must be able to accurately detect and report damage without human intervention.

Claim notification

Advanced technology is used to create immutable records of container damage reports. This ensures the integrity and transparency of claims data, which is particularly important for dispute resolution and insurance claims.

Mobile solutions are used during inspections to enable damage reports to be exchanged via cloud-based platforms. Inspectors can capture the relevant codes using mobile devices and load them into central databases accessible to all relevant parties.

These collaborative platforms are a trend that we will see more of in the future. Various parties, such as shipping companies, port authorities, insurers, and others, can access and update or supplement damage reports in real-time. This improves and simplifies communication and coordination and promotes efficient damage management.

The user interfaces of the future will be more intuitive and user-friendly. With the help of augmented reality (AR), damage could be visualised in 3D, and damage codes displayed in real-time.

Analysis and Patterns

A topic that is becoming increasingly important in container terminals is big data. Collecting large data sets from standardised damage reports enables advanced analysis of this data. The damage patterns and trends can be analysed to identify and correct the causes. In this way, future damage can be predicted and counteracted.

Another proactive strategy is data analysis with the goal of implementing predictive maintenance programs. Companies can use the predictions of where and when damage is likely to occur to take preventative measures. This reduces downtime and repair costs - while at the same time reducing the risk of damage to containers due to equipment errors. This trend will continue to grow as more and more data becomes available and analytical techniques continue to improve.

Sustainability

There is also an important point of connection with the topic of sustainability. Efficient damage reporting and repair processes help extend the life of containers, reduce the need for new containers, and minimise environmental impact. Companies, and global logistics hereby is no exception, will increasingly focus on sustainable practices in their operations.

 

FAQs - Common Container Damage Codes

General Codes:

  • W - Damage due to weather or natural elements
  • C - Collision or contact with another object
  • I - Impact from handling equipment

Specific Types of Damage:

  • D- Dent
  • S - Scratch
  • H - Hole
  • B - Bent
  • CR - Crack
  • CST - Corrosion or rust
  •  

Location Codes:

  • TP - Top panel
  • RP - Roof panel
  • FR - Front panel
  • AP - Aft panel
  • LF - Left front
  • RF - Right front
  •  

Additional Detail Codes:

  • IN - Internal
  • EX - External
  • FT - Floor timber
  •  

These codes are combined to provide more detailed information about the damage. Here are two examples:

  • C-RF-D: Collision resulting in a dent on the right front panel.
  • I-TP-H: Impact causing a hole in the top panel.

 

Takeaway

The lifespan of shipping containers is a crucial factor in the efficiency and safety of global logistics operations. Understanding the causes and types of container damage is critical to damage prevention and effective maintenance practices.

Standardising the reporting of container damage through container damage codes is central to improving communication and, thereby, efficiency in reporting and handling damage. This applied and applies to traditional exchanges between people, but even more so to data traffic between IT-based systems. The latter would not be possible without uniformity at all. 

The signs point to even more standardisation; automated solutions are introduced everywhere, and upcoming technologies will depend heavily on and benefit from consistent standards.

Container Damage Claim Guideline

Delve deeper into one of our core topics: Port Automation

Sources:

(1)  https://www.iicl.org/technical-documents/iso-cedex-codes/ 

(2)  https://www.iicl.org/iiclforms/assets/File/public/cedex/ISO_9897_General_Purpose_Container_Standard.pdf




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Author

Elisa Rouhiainen, VP Sales Marine & Ports

Elisa Rouhiainen has nearly 20 years of experience in the container terminal industry. Throughout her career, she has consistently focused on embracing technology and championing automation as a tool to improve processes and increase efficiency. Elisa is a strong advocate for interoperability, standardisation and open interfaces.

Before joining Identec Solutions Elisa held a variety of positions in Kalmar, Cargotec and Navis since 2004. Her roles ranged from product management, marketing, and business development to sales management. During her career, she has been based in Finland, Singapore and India. This global experience has enriched her perspective and contributed significantly to her professional growth and expertise in the field.

Elisa holds a Master of Science in Industrial Engineering and Management from Tampere University of Technology.