94 The Law Review 2024 [2024] LR

The Law and Practice of Container Shipping

Philip Teoh*

Introduction

The evolution of container shipping has played a crucial role in transforming

international trade and shipping, making it more efficient, cost-effective, and
interconnected. Today, container shipping is ubiquitous and has evolved to
the extent that there are now ultra-large container vessels (“ULCV”) that can
carry up to thousands of Twenty-Foot Equivalent Units (“TEU”), for
example, the most recent ULCV, the MSC Irina, has an astonishing capacity of
24,346 TEUs.1 The evolution of container shipping has been a transformative
force in global trade, fostering economic growth, reducing costs, and
connecting distant markets in ways that were once unimaginable. This article
aims to provide an overview on container shipment.

What is container shipping?

Today, an estimated 90 percent of the world’s goods are transported by sea,
with 60 percent of the goods packed and transported in large steel
containers.2
Companies first utilised shipping containers for combined rail and
horse-drawn transport in Britain at the end of the 18th century. By the 1830s,
railroads were carrying containers suitable for other transport modes. The
United States (“US”) Army used standard-sized small containers during
World War II, which helped speed up the distribution of supplies.3
The US military began exploring the use of standardised small containers to
more efficiently transport guns, bombs and other materials to the front lines
during World War II. But it was not until the 1950s that American
entrepreneur Malcolm McLean realised that by standardising the size of the
containers used in global trade, loading and unloading of ships and trains
could be at least partially mechanised, thereby making the transfer from one

*
Philip Teoh is the Partner and Head of Practice of Shipping in Azmi and Associates. He is
also a practising arbitrator. He would like to thank his colleague Laura Yew for
collaboration on this article.
1
Sinay, “How has Container Shipping Changed Over Time”, Sinay (January 3, 2024),
available at https://sinay.ai/en/how-has-container-shipping-changed-over-time/ (accessed
February 7, 2024).
2
“A Brief History of the Shipping Container”, available at https://maritime-executive.
com/editorials/a-brief-history-of-the-shipping-container (accessed February 7, 2024).
3
See https://www.plslogistics.com/blog/the-history-of-containers/ (accessed February 7,
2024).
[2024] LR The Law and Practice of Container Shipping 95

mode of transportation to another seamless. This way products could remain

in their containers from the point of manufacture to delivery, resulting in
reduced costs in terms of labour and potential damage.
This system dramatically reduced the cost of loading and unloading a ship.
In 1956, manually loading a ship cost $5.86 per ton; the standardised
container cut that cost to just 16 cents a ton. Containers also made it much
easier to protect cargo from the elements or thieves, since they are made of
durable steel and remain locked during transport.

Today, the standard container size is 20 feet long, eight feet wide and nine feet
tall – a size that’s become known as a “20-foot-equivalent container unit” or
TEU. There are actually a few different standard sizes, such as 40 feet long or
a little taller, though they all have the same width. One of the key advantages
is that whatever size a ship uses, they all, like Lego blocks, fit neatly together
with virtually no empty spaces.
This innovation made the modern globalised world possible. The quantity of
goods carried by containers soared from 102 million metric tons in 1980 to
about 1.83 billion metric tons as of 2017. Most of the container traffic flows
across the Pacific Ocean or between Europe and Asia.4
The large container vessel Ever Given ran aground while transiting the
Suez Canal on March 23, 2021, lodging herself against both banks of the
waterway. The blockage caused vessels to be backed up in the Mediterranean
to the north and the Red Sea to the south. It is estimated that the costs to
global trade was about $400 million per hour based on the approximate value
of goods that are moved through the Suez every day, according to shipping
data and news company Lloyd’s List.

For six days, the world watched as a multi-national team of salvors, tug
operators and the Suez Canal Authority (SCA) coordinated a race against
time to free the ship and unclog the canal.5
The vessel sailed from Malaysia’s premier container port, the Port of Tanjung
Pelepas. The majority of shipping between China and the European Union
(EU) navigate along what is known as the Maritime Silk Road.6 The world’s
largest container ports are on this route: Shanghai, Singapore, Shenzhen,
Ningbo-Zhoushan, Busan and Hong Kong. En route shipments from China,

4
See n 2 above.
5
See the author’s “Ever Given – What Happens Now?”, Maritime Executive, available
at https://maritime-executive.com/editorials/ever-given-what-happens-now (accessed
February 7, 2024).
6
See shipping Routes from China at https://cargofromchina.com/shipping-routes/
(accessed February 7, 2024).
96 The Law Review 2024 [2024] LR

Japan to Europe will pass through the Suez Canal instead of the Cape of
Good Hope. Shipping lines schedule their calls at ports along the route.7
Containers are commonly utilised for the shipment of goods in the context of
international trade, both for exporting and importing purposes.8 This is
because containers are well-suited for multimodal transportation which is
often required in international trade.9 For instance, containers can seamlessly
transit between sea transportation (ships) and land transportation (trucks),
facilitating efficient and versatile movement across various modes of
transportation. The two main types of containers are the TEU and the
Forty-Foot Equivalent Units (“FEU”). Of course, there are many other sizes
and specialised containers for specific cargoes. A FEU is twice the length of a
TEU container. However, this does not mean a shipper can pack 21 tons of
cargo in a TEU container, and pack 42 tons of cargo in a FEU container.10
TEUs are designed to carry more weight than voluminous cargo. For example,
minerals, metals, machinery, sugar, paper, cement and steel coils all of which
are heavy cargo. FEUs are designed to carry voluminous cargo rather than heavy
cargo. For example, furniture, steel pipes, paper scrap, cotton, and tobacco all
of which are voluminous cargoes.11 While the shipper cannot pack double the
TEU cargo weight into a FEU container, they can definitely pack more than
double the TEU cargo volume into a FEU container.
The list of the largest container shipping companies as of January 2024 are as
follows:12

No. Container Shipping Companies Vessels TEU

Capacity
1. MSC – Mediterranean Shipping Company 800 5.6 M
2. APM – Maersk 675 4.1 M
3. CMA – CGM 624 3.6 M
4. COSCO – China Ocean Shipping Company 490 3.1 M
5. Hapag – Lloyd 266 2.0 M
6. ONE – Ocean Network Express 231 1.8 M

7
The top container ports in terms of containers handled can be found at https://www.
worldshipping.org/top-50-ports (accessed February 7, 2024). Out of the top 10 container
ports, nine are located in Asia and six are in China.
8
Carole Murray, David Holloway and Daren Timson-hunt, Schmitthoff, The Law and Practice
of International Trade, 12th edn (Sweet and Maxwell, 2012), p 361.
9
Ibid.
10
Hariesh Manaadiar, “5 Points to Consider Before Packing Your Cargo”, Shipping and Freight
Resource (January 22, 2024), available at https://www.shippingandfreightresource.com/
points-to-consider-before-packing-your-cargo (accessed February 7, 2024).
11
Ibid.
12
“20 Largest Container Shipping Companies in the World in 2024”, MI News Network,
available at https://www.marineinsight.com/know-more/10-largest-container-shipping
-companies-in-the-world/ (accessed February 7, 2024).
[2024] LR The Law and Practice of Container Shipping 97

No. Container Shipping Companies Vessels TEU

Capacity
7. Evergreen Line 211 1.6 M
8. HMM – Hyundai Merchant Marine 70 0.8 M
9. Yang Ming Marine Transport 94 0.7M
10. Zim Integrated Shipping Services Ltd 124 0.6M
11. Wan Hai Lines 120 0.48M
12. Pacific International Lines (PIL) 88 0.3M
13. SITC International Holdings Co Ltd 102 0.16M
14. X-Press Feeders 80 0.15M
15. Korea Marine Transport Co Ltd 64 0.15

Types of container packing

There are two types of container shipping: Full Container Load (“FCL”) and
Less than Full Container Load (“LCL”).

CY/CY and CFS

Container Yards (“CY”) are essentially open-area stacking yards. The transit
or contractual voyage is sometimes described as Port of Loading CY/Port of
Discharge CY which is essentially an open area consisting of stacking yards.
Container storage at the Container Yard can be arranged by shipbound
(export) and landbound (import) stacks of containers.

FCL shipments were described in the case of The “Axel Maersk”; Atlas
Electronics (Mal) Sdn Bhd v MV “Axel Maersk”, Owners13 as follows:
… A CY/CY equates to an FCL/FCL. In this situation the container would
belong to or be leased by the carriers. Maersk Line only undertakes to send
an empty container to the shipper when the shipper himself will stuff the
container without any representative from Maersk Line being present. We
will also give one of the Maersk seals to the shipper. On completion of stuffing
the shipper will seal up the container. From the shippers' premises to the ship is the
responsibility of the shipper. From the quay side the container is loaded on to
the ship. We ourselves would not know what the contents of the container
are or the condition of the contents. We accept what is given by the shipper
as the contents. Shipped in apparent good order and condition, this only
refers to the container and not to what is inside it.
Where the shipments consist of LCL cargoes, the exporter will not have
sufficient cargo to fill a container. His cargo will need to be consolidated with
other cargo to fill the container. At destination, the cargo will need to be
devanned for distribution to the consignee/his buyer. The consolidation will

13
[1981] 2 MLJ 315.
98 The Law Review 2024 [2024] LR

be done at the Container Freight Station at the port of loading and the
devanning and onward transport to the consignee will be done at the
Container Freight Station at the port of discharge.
In the case of LCL shipment, the exporter must deliver the cargo to the
container freight station , where it will be combined with the merchandise of
other exporters within a consolidated container.14 Upon reaching the
destination, the shipment will undergo “degrouping”. This process involves
separating the contents of the container, and subsequently distributing the
individual parcels to their respective consignees.15
Damage will occur during the consolidation if the cargoes are not properly
consolidated. Food ingredients if mixed with other consignment of
chemicals in the same container will be contaminated and will no longer be
usable for intended purposes. Likewise, there will be damage if there is no
proper packing when heavy cargoes are placed on top of fragile ones or if
there is no proper stuffing and the contents inside the container shift and are
thrown about during the voyage.
Container storage yards represent a temporary buffer zone where containers
are left while waiting for the assigned containership to be available for
loading or while waiting to be picked up for inland distribution.
The English Supreme Court in Volcafe Ltd v Cia Sud Americana de Vapores SA
(“Volcafe Ltd”)16 considered, among other things, the legal burden of proof in
a case involving condensation damage to coffee beans carried in
unventilated containers under a bill of lading incorporating the Hague Rules.

In Volcafe Ltd,17 the claimants were the owners and bill of lading holders of
nine consignments of bagged Colombian green coffee beans shipped in
unventilated containers on various vessels owned by the defendant
(“the carrier”). The bills of lading which were subject to English law and
jurisdiction and incorporated the Hague Rules (as set out in the Schedule to
the Carriage of Goods by Sea Act 1924), were on LCL/FCL terms, which
meant that the carrier was contractually responsible for preparing the
containers for carriage. The use of Kraft paper to line unventilated containers
to protect the cargo from water damage was a common commercial practice
and was employed by the carrier in the present case. When the containers
were opened, however, the cargo was found to have suffered water damage
from condensation.

The claimants' primary case against the carrier was that, in breach of its
duties as bailee, the carrier had failed to deliver the cargo in the same good

14
See n 8 above, p 362.
15
Ibid, p 361.
16
[2019] 2 All ER 81; [2018] UKSC 61.
17
Ibid.
[2024] LR The Law and Practice of Container Shipping 99

order and condition as recorded on the bill of lading on shipment and,

alternatively, that, in breach of article III rule 2a of the Hague Rules, had
failed properly and carefully to load, handle, stow, care for and discharge the
cargo.

The carrier pleaded inherent vice on the ground that the coffee beans were
unable to withstand the ordinary levels of condensation forming in
containers during passages from warm to cool climates.

At first instance,18 the deputy judge held that there was no legal burden on
the carrier to prove that the damage to the cargo was caused without
negligence or by an excepted peril. There was only a factual presumption that
damage ascertained on discharge was due to negligence. The deputy judge
made findings of fact in regard to the paper that was used to line the walls
and roof of the containers and held that the evidence did not establish the
weight of paper that had been used by the carrier, nor how many layers of
paper were used, and there was no evidence to show the thickness of paper
that ought to have been used nor a generally accepted commercial practice
on that point. Accordingly, because of that evidence, the deputy judge found
that the carrier had been unable to rebut the presumption.

That decision was overturned by the Court of Appeal,19 which found that the
deputy judge had misdirected himself on the issue of the burden of proof
under article III rule 2 of the Hague Rules, which therefore entitled it to
reopen the facts and overrule the deputy judge. The Court of Appeal found
that there was an accepted industry practice for lining unventilated
containers for the carriage of bagged coffee, and that, by an examination of
the evidence, two layers of paper had been used, with the effect that, from the
deputy judge's finding about the weight of paper used, the containers had
been lined in accordance with accepted industry practice.

The claimants appealed to the Supreme Court. There was no significant

dispute between the parties as to the common law position of bailment,
however, the real issue was whether the incidence of the burden of proof was
different in a modern contract for carriage by sea incorporating the Hague
Rules. In particular, first, whether the claimants bore the legal burden of
proving breach of article III rule 2 of the Hague Rules, or whether it was the
carrier, once loss or damage to the cargo had been ascertained, to prove
compliance, and, secondly, once the carrier had borne the burden, as
accepted by the carrier, of proving facts that brought the case within the
exception in article IV rule 2(m)b of the Hague Rules, whether it was then for
the claimants to prove that it was the negligence of the carrier that caused the
excepted peril to operate on the cargo.

18
[2016] 1 All ER (Comm) 657.
19
[2017] 1 All ER (Comm) 751.
100 The Law Review 2024 [2024] LR

The Supreme Court allowed the appeal and overturned the decision of the
Court of Appeal. The court held that in principle, where cargo was shipped in
apparent good order and condition but was discharged damaged, the carrier
bore the burden of proving that that was not due to its breach of the
obligation in article III rule 2 of the Hague Rules to take reasonable care.

To the extent that authorities in cases governed by the Hague Rules pointed
to a different rule, in so far as they suggested that the cargo owner had the
legal burden of proving a breach of article III rule 2 of the Hague Rules, the
Supreme Court held that they were mistaken.20
The court also held that it was well established that the carrier bore the
burden of bringing himself within any of the exceptions in article IV rule 2 of
the Hague Rules. In respect of the exception under article IV rule 2(m), it had
been established that that was an exception only in respect of such loss as
could not, by the exercise of reasonable care, have been avoided. It had to
follow that if the burden of proving the application of the exception under
article IV rule 2(m) of the Hague Rules was on the carrier, that had to extend
to proving that the damage could not have been avoided by the exercise of
reasonable care. The carrier had the legal burden of disproving negligence for
the purpose of invoking an exception under article IV rule 2 of the Hague
Rules, just as he had for the purpose of article III rule 2. If the carrier could
and should have taken precautions which would have prevented some
inherent characteristic of the cargo from resulting in damage, that
characteristic was not inherent vice. Accordingly, in order to be able to rely on
the exception for inherent vice, the carrier had to show either that he took
reasonable care of the cargo but the damage occurred nonetheless, or else that
whatever reasonable steps might have been taken to protect the cargo from
damage would have failed in the face of its inherent propensities.21
The Supreme Court also disapproved the Court of Appeal's criticisms of the
deputy judge’s decision and the Court of Appeal reopening the facts, and the
decisive reason why it had overruled him was that it had disagreed with two
of his critical conclusions about the evidence, on the issues of industry
practice and the layers of paper in place at the time of the shipment, and had
made positive findings of its own which he had felt unable to make. While an
appeal to the Court of Appeal is by way of rehearing, a trial judge's findings
of fact should not be overturned simply because the Court of Appeal would
have found them differently. In the instant case, the judgment of the Court of

20
For example, Silver v Ocean Steamship Co Ltd [1929] All ER Rep 611 and Aktieselskabet de
Danske Sukkerfabrikker v Bajamar Compania Naviera SA, The Torenia [1983] 2 Lloyd's Rep 210
(considered); Albacora SRL v Westcott & Laurence Ltd, The Albacora [1966] 2 Lloyd's Rep 53
and Great China Metal Industries Co Ltd v Malaysian International Shipping Corp Bhd,
The Bunga Seroja [1999] 4 LRC 50 (disapproved).
21
Notara v Henderson (1872) LR 7 QB 225, Nugent v Smith (1876) 1 CPD 423 and Albacora SRL
v Westcott & Laurence Line Ltd, The Albacora [1966] 2 Lloyd's Rep 53 (considered);
The Glendarroch [1891–4] All ER Rep 484 (disapproved).
[2024] LR The Law and Practice of Container Shipping 101

Appeal attached no intrinsic weight to the deputy judge's analysis. It simply

substituted its own. In those circumstances, the Court of Appeal had not been
justified in overturning the deputy judge's findings on either of those two
critical points.

The carrier had the legal burden of proving that it had taken due care to
protect the goods from damage, including due care to protect the cargo from
damage arising from inherent characteristics such as its hygroscopic
character. The deputy judge's conclusions about the practice of the trade in
the lining of unventilated containers for the carriage of bagged coffee and the
absence of evidence that the containers had been dressed with more than one
layer of lining paper would be reinstated. In the absence of evidence about
the weight of the paper employed, it followed that the carrier had failed to
prove that the containers had been properly dressed.

Carrier’s period of responsibility

The consignee or receiver of the containerised cargo has responsibility to take
proper and expeditious steps to collect the container and devan the cargo
upon arrival.

In the English High Court case of JB Cocoa Sdn Bhd & Ors v Maersk Line
AS trading as Safmarine (Maersk Chennai) (“JB Cocoa v Maersk Line"),22 a
container of cocoa beans was shipped on board the defendant carrier’s vessel
from Lagos, Nigeria to Tanjung Pelepas, Malaysia under a bill of lading dated
September 26, 2017. Clause 5.1 of the bill of lading provided that the carrier’s
liability for loss of or damage to the cocoa beans between loading at Apapa,
Nigeria and “the time of [the defendant] tendering the Goods for delivery at
the Port of Discharge” was to be determined in accordance with articles 1 to
8 of the Hague Rules, subject to any other provisions of the bill of lading. The
cargo was discharged by October 1, 2017 but was not collected until around
November 28, 2017, during which time it remained in the containers at a
container storage facility. After it was devanned (unloaded from the
containers), it was found to be suffering from condensation and mould
damage. The claimant cargo interests were: JB Cocoa, who were the alleged
owners of the cargo; JB Foods who were the lawful holder of and indorsee
under the bill of lading; and insurers, who had indemnified JB Cocoa for their
loss.

The claimants alleged that the carrier had breached its duty of care in failing
to take reasonable care of the cargo until the point of delivery, in particular
from the time of discharge until the time of delivery. The carrier denied
liability, contending that any damage was due to inherent vice and that it
took proper care of the cargo, alternatively that the terms of the bill of lading
exempted it from liability. An issue also arose regarding JB Cocoa’s title to
sue.

22
[2023] EWHC 2203 (Comm); [2023] All ER (D) 16 (Sep).
102 The Law Review 2024 [2024] LR

JB Cocoa sought to bring a claim in negligence. However, on the evidence, it

had not sufficiently demonstrated that it was the owner of the cargo at the
time the cargo sustained damage. Even assuming it had proved that it owned
the cargo at the relevant time, it had not shown any proper basis for a claim
against the carrier outside of the terms of the bill of lading.

Consequently, any claim by the insurers in tort also fell away. And any
contractual claim under the bill of lading would be brought by JB Cocoa on its
own account as it was a party to the case.

JB Foods, however, had a standing to claim as lawful holder and indorsee of

the bill of lading. It could also exercise its rights to sue under s 2(1) of the
UK Carriage of Goods by Sea Act 1992 for the benefit of the party that owned
the goods when they suffered damage and sustained loss or damage due to
any breach by the carrier of the contract of carriage.

The Supreme Court in an earlier case Volcafe Ltd 23 considered, among other
things, the legal burden of proof in a case involving condensation damage to
coffee beans carried in unventilated containers under a bill of lading
incorporating the Hague Rules.

The Supreme Court held that, as a bailee, a carrier is liable for loss or damage
sustained during the voyage unless it proves on a balance of probabilities
that this was not caused by any breach of its duty to care for the cargo under
article III rule 2 of the Hague Rules or that one of the exceptions in article IV
rule 2 applies. Further, in order to come within one of these exceptions
(including the inherent vice defence), the carrier must prove that the damage
was not caused by its negligence.

On the evidence in the present case, the court found that the damage was not
caused by the cargo’s unfitness to survive the voyage. Instead, the court
concluded that the damage was a result of the prolonged containerisation of
the cargo post-discharge. The court also held that if the carrier was
responsible for the cargo between discharge and devanning under the
contract of carriage, then it would have been liable for the damage to the
cocoa beans because it failed to take reasonable care of them by not opening
the container doors to provide ventilation. It was common ground between
the experts that it was important to minimise the amount of time during
which cocoa beans were inside closed, unventilated containers.

As made clear in Fimbank Plc v KCH Shipping (Giant Ace),24 whether a carrier
bears responsibility for the cargo before loading or after discharge will
depend on the terms of the contract of carriage. Here, the court considered
the terms of the bill of lading and concluded that the carrier’s responsibility

23
See n 16 above.
24
[2023] EWCA Civ 569.
[2024] LR The Law and Practice of Container Shipping 103

for the cargo ended upon its discharge from the vessel. Therefore, the carrier
was not liable for the damage.

In this case, the court found that the damage sustained by the cargo of cocoa
beans was caused by prolonged containerisation post-discharge and a failure
to ventilate the containers by opening the doors. However, as the carrier’s
responsibility to take care of the cargo ended upon discharge, it was not liable
for the damage.

Duty of shipper

Although container shipments significantly lower the likelihood of claims,

they do not ensure there will be no claims at all. Therefore, it is important to
note that claims can still occur if the shipper neglects to inspect the container
before loading.
While the English High Court case of JB Cocoa v Maersk Line,25 discussed
above, concerned the duties of the consignee to expeditiously clear the FCL
container at the port of discharge, the next case concerned the duties of the
shipper in FCL shipments.

The Malaysian Admiralty Court decided in December 2023 a case relating to

FCL container shipments.26 In this admiralty case BG Oleochemicals SL v
Evyap Sabun Malaysia Sdn Bhd,27 goods were shipped in three separate FCL
containers onboard three different vessels on different dates. Upon arrival at
the plaintiff’s warehouse in Spain, and upon opening of the containers, the
goods were found to be damaged, that is, observed to have some melting,
was wet and infested with insects.

The Admiralty judge held on the balance of probabilities that the defendant,
as an FCL shipper, had failed to properly prepare and package the goods in
the container in a manner suitable to endure the transit from Malaysia to
Spain. From this judgment, the Admiralty Court emphasised the duty of an
FCL shipper in taking the necessary precautions in preparing the empty
container and the packaging of the goods to be loaded in the container.

The Admiralty judge, Justice Ong Chee Kwan, reasoned as follows. A FCL is
a full container load, which means that an empty container will be delivered
to the shipper for exclusive use, allowing the shipper to load their goods
without sharing the space with other shipments. The cargoes in the case were
loaded in the defendant’s warehouse in containers which were then closed
and sealed. The only time they were opened were upon arrival at the
plaintiff’s premises. There were no intermediate stops where the containers

25
See n 22 above.
26
BG Oleochemicals SL v Evyap Sabun Malaysia Sdn Bhd [2024] 2 AMR 541, HC, the author
represented the plaintiff in this case.
27
Ibid.
104 The Law Review 2024 [2024] LR

could have been opened.28 In addition, there were no other mutual factors of
the three separate shipments aside from the defendant’s warehouse.

The judgment also referred to the case of LG Bominflot Bunkergesellschaft für

Minerable MBH & Co KG v Petroplus Marketing AG,29 where the court
concluded as follows:
[38] … there is to be implied into an fob contract a term under s 14(2) of the
1979 Act that the goods will be of satisfactory quality not only when the cargo is
delivered onto the vessel but also for a reasonable time thereafter. Such a term is
also implied at common law with the additional dimension that the goods
should not only be of satisfactory quality for a reasonable time but also should
remain in accordance with the contractual specification (if any) for such a period.30
Hence, the shipper has, by the manner of preparing the container shipment,
to ensure that the cargoes maintain satisfactory quality throughout the
shipment period.
The decision is a reminder that, in this context, discharge is not the same as
delivery and that the Hague Rules govern the carrier’s liability only between
the point of loading and the point of discharge, with any liability for matters
occurring before or after those points being a matter of contract.
Carriage of containers on deck

Container ships possess space beneath the deck, specifically in the cargo
hold, for storing containers.31 However, most containers are typically
stacked, secured and carried on the deck.32 The location where a container
will be placed on the ship, whether below deck in the cargo hold or secured
on deck, is determined by the software system managing the vessel's trim,
stability and ballasting.33
The Hague Rules treat containers carried on deck differently due to it
deviating from the common law duty of carrying goods below deck in the
cargo hold.34 Transporting cargo on deck, usually breakbulk cargo, is
considered riskier than below deck carriage.35 While a container is
constructed to endure the normal impact of wind and waves when stored on
deck during transit, it is argued that such on-deck carriage still presents a
higher risk compared to storing the container in the cargo hold below.36

28
Ibid.
29
[2009] EWHC 1088 (Comm).
30
See n 26 above, at para [53].
31
Dr Irwin UJ Ooi, “The Pandora’s Box of Unimodal Regimes in a Multimodal World:
Reasons Why Malaysia Needs A Multimodal Framework” [2007] 1 MLJ cxlviii.
32
Ibid.
33
Ibid.
34
Ibid.
35
Ibid.
36
Ibid.
[2024] LR The Law and Practice of Container Shipping 105

Containers stacked high on the deck might topple overboard in the event of
equipment failure used for securing them to the deck and each other.37
Additionally, deck cargo is exposed to temperature variations, and if the
container is a standard steel, without thermal insulation, the cargo inside
becomes susceptible to temperature fluctuations.38 Therefore, shippers
should also note that insulation work should be done properly to protect the
goods from temperature fluctuations.
Packing of cargo

The importance of proper packing of cargo should not be overlooked,

especially when the container travels by sea. Even though containers
undergo thorough testing to withstand various stresses, relying solely on this
protection is not sufficient. When the container is on board a ship and the
ship is sailing, there are six ways in which the ship can move as shown below.

(Image: https://www.shippingandfreightresource.com/pack-your-container-properly/)

37
Chapter 31, titled “Deck Carriage of Tetley” in Marine Cargo Claims, 4th edn.
38
Glass, Freight Forwarding and Multimodal Transport, 1st edn (Witherbys, 2005).
106 The Law Review 2024 [2024] LR

When the ship moves, so does the container and the cargo inside the
container. There are several options to secure the cargo:

• ensure that all weight limitations of the container are met as per the
markings on the container;

• distribute the weight equally inside the container;

• do not exceed permissible weight concentrations per square foot of
deck;
• avoid concentrating heavy weights at one side or one end;

• stow heaviest items on the bottom for stability; and

• box, crate or place on cradle the heavy items.

The packing of goods inside containers requires careful care and attention. In
this regard what is considered as “sufficient packing” is normal or customary
packing in the trade.39 Such packing should permit the goods to withstand
the normal hazards likely to be encountered on the specific voyage
contemplated.

Losses due to insufficient packing are not recoverable against carrier and
insurer.
The normal marine cargo insurance adopts the Institute Cargo Clauses (A)
(ICC(A) clauses). Losses due to insufficient packing is excluded via exclusion
in clause 4.340 – loss, damage or expense caused by insufficiency or
unsuitability of packing or preparation of the subject-matter insured (for the
purpose of this clause 4.3, “packing” shall be deemed to include stowage in a
container or lift-van but only when such stowage is carried out prior to
attachment of this insurance or by the assured or their servants).

Insufficient packing is also excluded under article IV rule 2(m) of the Hague
Rules and Hague-Visby Rules.

Guidance on packing of shipping containers can be obtained from the Code

of Practice issued by IMO/ILO.41

Sea voyages are made in a variety of weather conditions likely to exert a

combination of forces upon the ship and its cargo. There will give rise to
pitching, rolling, heaving, surging, yawing or swaying or a combination of

39
Surveyors in cases of damage to containerised goods will normally mention whether there
was any defect in the packing of the goods inside the container.
40
This was brought into evidence in BG Oleochemicals SL v Evyap Sabun Malaysia Sdn Bhd,
see n 26 above, as the cargo sold by the shipper was on CIF terms and the plaintiff had in the
first instance tried to claim under the marine cargo insurance.
41
See IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code),
2014 edn.
[2024] LR The Law and Practice of Container Shipping 107

two or more. Such movements can exert forces on the cargo grater than
those usually found ashore and may exert them over a prolonged period.
Packing and securing of cargo inside a container or vehicle should be
carried out with this in mind. It should never be assumed that the weather
will be calm and the sea smooth or that securing methods used for land
transport will always be adequate at sea. During longer voyages, climatic
conditions are likely to vary considerably with possible effect on the
internal conditions of a container which may give rise to condensation
(sweating) on cargo or internal surfaces. Where cargo is liable to damage
from such cause, expert advice should be sought.42
Before loading the cargo into the container a visual inspection of the empty
container is recommended prior to packing:

A container should be weatherproof unless it is so constructed that this is

obviously not feasible. Previous patches or repairs should be carefully
checked for possible leakage. Potential points of leakage may be detected
by observing if any light enters a closed container. In carrying out this
check, care should be taken to ensure that no person becomes locked inside
a container. A container should be free from major damage, with no broken
flooring or protrusions such as nails, bolts, special fittings, etc. which could
cause injury to persons or damage to the cargo. Cargo tie-down cleats or
rings where provided should be in good condition and well anchored. A
container should be clean, dry and free of residue and persistent odours
from previous cargoes.43
On stowage inside the container, it is also recommended:

Stowage should be planned before packing is commenced. This should

make it possible to produce either a tight or a secured stow, in which the
compatibility of all items of cargo and the nature, i.e. type and strength, of
any packages or packaging involved, are taken into account. The
possibility of cross-contamination by odour or dust as well as physical or
chemical compatibility should be considered.44
The contents inside the container need to be properly secured:

It is essential to make the cargo in a container or vehicle secure against any

reasonably foreseeable movement. At the same time the method of
securing the cargo should not itself cause damage or deterioration either to
the cargo of the container or vehicle. The cargo weight should be evenly
distributed over the floor or a container or vehicle. Where cargo items of a
varying weight are to be packed into a container or vehicle or where a
container or vehicle will not be full (either because of insufficient cargo or
because the maximum weight allowed will be reached before the container
or vehicle is full), the stow should be so arranged and secured that the
approximate centre of the weight of the cargo is close to the mid-length of

42
Ibid.
43
Ibid.
44
Ibid.
108 The Law Review 2024 [2024] LR

the container or vehicle. In no case should more than 60 per cent of the load
be concentrated in less than half of the length of a container measured from
one end. Heavy goods should not be placed on top of lighter goods and
liquids should not be placed on top of solids. The centre of gravity should
be below the half-height of a container. In order to avoid cargo damage
from moisture, wet cargoes, moisture inherent cargoes or cargoes liable to
leak should not be packed with goods susceptible to damage by moisture.
Wet dunnage, pallets or packaging should not be used. In certain cases,
damage to equipment and cargo can be prevented by the use of protective
material such as polythene sheeting.45
The following recommendation for the final stages of completion of packing:

During the final stages of packing a container, care should be taken, so far
as is practicable, to build a secure face of the cargo so as to prevent “fall out”
when the doors are opened. Where there is any doubt as to the security of
the cargo, further steps should be taken to ensure security by weaving
strapping between securing points or placing timber between the rear
posts. Two factors should be borne in mind that a container on a trailer
usually inclines towards the doors; and that a cargo may move against the
doors due to jolts etc. during transit.46
Similarly, the following safety advice on opening of container doors on
receipt of containers:

Persons opening a container or vehicle should be alert to the possibility of

cargo falling out. Doors, when opened, should be secured in the
fully-opened position.47

45
Ibid.
46
Ibid.
47
Ibid.