Mary Harp

Narkon/Lancaster
BA231 Fundamentals of Transportation and Logistics
29 May, 2016
Lost Cargo, What Happened and Where Does It Go?
Right now, as you read this, there are five or six million shipping containers on large
cargo ships sailing across the worlds oceans carrying everything from potato chips to
refrigerators. About every hour, on average, a container is falling overboard never to be seen
again. Did you know that there are thousands of containers of cargo lost at sea, by truck and by
train annually? How does this happen, does it ever get recovered and who pays for it? These
questions will be answered throughout this report but be prepared to be blown away with the
results.

This report is more specific to cargo containers lost at sea as there is very little
information in regards to other modes of transportation but a few will be mentioned. Cargo
losses can be caused from trailer hijacking, fraudulent pickups, driver theft, and containers
falling off ships due to heavy weather and sea conditions as well as train theft.

The Shipping Process

Once a company has received an order it is then prepared it for shipment. The shipper
then instructs the crew as to the destination and the type of carrier to be used. The container is
loaded and throughout the loading process, it is secured with straps, ropes, or bars to prevent it
from moving during transport. Once loaded, the container is weighed, proper paperwork
prepared and then the unit is secured. This can range from ship, railroad, air or motor carrier.
Reasons for Cargo Loss
According to Cargonet, more than $ 18 million of cargo was stolen in the United States
in the fourth quarter of 2014 and fifty five percent of the thefts occurred during Friday through
Sunday. Food and beverage items were the most stolen commodity and accounted for 24 percent
of cargo thefts (Cargo). Other items that have been stolen range from produce, meat products,
seafood, frozen food, laptops, and electronics.

The following are some of the key reasons that lead to containers being lost at sea;
improper packing which means containers are not adequately secured; poor stowage when a

container is overloaded which can cause structural damage of the container resulting in the
collapse of containers; structural failures in the containers and; parametric rolling which is a type
of movement that is experienced only on container ships where the rolling occurs in phase with a
pitch causing ropes or straps to break (Markin). When a container is readied for placement on a
ship, workers need to properly load the containers as it is very important to the stability and
safety of the ship as well as trucks, and trains that transport the goods.

Poor Lashing
Early container ships were built with their deckhouse at the forward end of the ship,
with containers often in stacks two, three and some even as high as six. The effects of such high
deck loadings are numerous. Ship stability is comprised in difficult sea conditions. Bridge
visibility is lessened, increasing the likelihood of collisions (Containers). Ships are difficult to
maneuver at low speeds, again heightening collision risks and some shippers frequently
understate the weight of their containers to reduce freight charges.
Types of Losses
On February 25, 2014, the merchant vessel Med Taipei left San Francisco in the middle
of a winter storm. The ship began rolling violently in 23-to-30 foot swells. The containers on
the ship had been stacked incorrectly with heavy containers perched on top of lighter ones. The
containers began to break free and fifteen of the ships 40 containers fell overboard. By the time
the ship reached the Port of Los Angeles, nine more containers had fallen overboard, and another
21 lay crumpled on the deck (Koerth-Baker). On November 30, 2006, a container washed
ashore in North Carolina along with thousands of bags of Doritos chips.

One of the largest cargo losses mentioned in all the research of this project points to
February 2014 when the ship, The Svendborg Maersk was struck by high wind and waves after
it left the Bay of Biscay and by the time it had reached the Spanish port of Malaga, more than
520 containers were unaccounted for (Lister).

Technology has allowed for more criminals to operate from behind the safety of a desk.
One example is where criminals set up a fictitious trucking company online and then use it to
prey on shippers that dont do research on the company. The load gets picked up but never

delivered and most of the time these crimes go unreported because of concern for higher
insurance premiums.
Some reports of cargo theft range from truck drivers sleeping in their trucks and waking
up the next morning to discover that their trailer had been stolen or a truck driver might stop to
get something to eat and when they come out to their truck, their trailer has been stolen.

Cargo loss on trains is not as prominent. One article by Patrick McGovern talks about
how in 2003, Edward Mongon was sentenced to thirteen years as the leader of a highly
organized group known as the Conrall Boys. This gang had stolen millions of dollars of cargo
by leaping on to trains and using bolt cutters to break into containers. The cargo would be
thrown off the train onto the side of the tracks while the train was still moving and accomplices
on the ground gathered the stolen items and moved them to a collection point where they were
sold to local fences (McGovern).

What Happens to the Lost Cargo?

The sad thing is once cargo has been found, most of it will have to be recalled because
once it is out of sight and out of mind no one knows where it has been or how it was kept. These
crimes lead to a rise in overhead costs for companies, which subsequently increase retail prices,
putting the cost squarely in the pockets of American consumers. Ten thousand missing containers
represent millions of lost revenue for companies.
A few of the problems with containers that fall off ships is they havent sunk but at the
same time they are also hard to find. What are the chances of a ship hitting a container lost at
high seas? If empty, a container will most likely sink due to a result of it being filled up with
water. If full, they may float for a while; air trapped in the cargo may hold a box on the surface
until the cargo becomes waterlogged. If a ship should have a collision with a container that was
lying in the water, it is likely to do some serious damage.
Most containers wont float long, especially in heavy seas. A 20-foot container can float
for up to two months and a 40-foot container might float more than three times as long (Lister).
But the hazard is still real enough and in recent years, several small vessels have reported
damage after hitting semi-submerged containers.
Who Is Responsible?
Who is responsible for these lost containers remaining where they land? Numerous
factors affect the ability of a shipper to recover compensation from a carrier for loss of damage to
goods. One such factor is the mode of transportation involved in the shipment, whether it is a
shipment by rail or truck, ocean carrier or by air.

The laws concerning carrier liability have been developed independently for air carriers,
carriers of goods at sea, and overland carriers, resulting in a significant variation among the
different modes of transportation in both the allowable exemptions from liability and the
limitations of liability applicable to each mode of transportation (Sorkin).
The contract between the shipper and the carrier generally provides that the carrier shall
not be liable for loss or damage caused by an act of God, the public enemy, authority of law, an
act or default of the shipper or owner, natural shrinkage, or losses resulting from a defect in the
property shipped (Sorkin) Ship owners are exempt from liability for loss or damage to
precious cargo unless the correct description is described in the bill of lading, and even then they
are not liable beyond the value declared.(Sorkin).
There is no way, short of inspection of the contents of each shipment, for a carrier to
determine whether the goods were in fact in good condition when packed by the shipper, or, if
the damage is discovered sometime after delivery, whether the damage occurred between the
time of delivery to the consignee and the time of discovery.
The Carriage of Goods by Sea Act ("COGSA") is a United States statute governing the
rights and responsibilities between shippers of cargo and ship-owners regarding ocean shipments
to and from the United States. Under the Carriage of Goods by Sea Act (COGSA), neither the
carrier nor the ship are responsible for loss or damage resulting from neglect or default of the
carrier in navigation or management of the ship; perils, damages and accidents of the sea or
navigable waters, act of God, war, or public enemies; quarantine; acts or omissions of the shipper
or owner of goods, strikes or lockouts (Sorkin).

Conclusion
In conclusion, there are some possible solutions to preventing the loss of cargo; first is to
securely attach the containers to the ship and each other to prevent them from falling off; second
is to make the shippers responsible for clean-up by attaching tags that identify the cargos
shipper; and third would be so that the containers do not present a risk to boaters or other ships,
have a reporting system that clearly identifies the area that the container was lost at.
Everyone should be responsible for cargo security and it is in the supply chains best
interest to share and collaborate, as well as develop best practices, standing operating procedures
and documented policies. When a trend of cargo theft is identified and shared with others, it
alerts others and lessens their chances of becoming a victim as well. They strike nearly
anywhere cargo moves. Cargo theft and loss is a much bigger issue than people realize.
There is no requirement on shipping lines to report container losses to the International
Maritime Organization or other international bodies, so no one seems to know how many
containers are lost at sea every year (Lister). Few, if any, of the containers lost from shipping
vessels are ever recovered and not many are reported. Some containers may wash up on beaches
or float in the sea but unless someone gets hurt, or something bad happens, there are no legal
repercussions for these losses.

Works Cited
"Cargo Thefts Total $18 Million in Final Quarter of Last Year." The Enforcer -Transport
Security, Inc.. N.p., Jan. 2015. Web. 12 May 2016.
<http://www.transportsecurity.com/news/archives/01-2015>. (1)
"Containers overboard." Vero Marine Insurance. N.p., 2007. Web. 30 Apr. 2016.
<http://www.veromarine.co.nz/dirvz/marine/marine.nsf/Content/PhotoFeature0007>. (8)
Koerth-Baker, Maggie. "What happens to shipping containers lost at sea?." Boing,
Boing.net. N.p., 9 Mar. 2011. Web. 30 Apr. 2016. <http://boingboing.net/2011/03/09/whathappens-to-ship.html>. (3)
Lister, Tim. "Ship loses more than 500 containers in heavy seas." CNN. N.p., 22 Feb.
2014. Web. 29 May 2016. <http://www.cnn.com/2014/02/21/world/container-ship-losescontainers/index.html>. (30)
Markin, Jason. "Why Containers Get Lost at Sea?." World Maritime News. N.p., 14 May
2015. Web. 30 Apr. 2016. <http://worldmaritimenews.com/archives/160925/why-containers-getlost-at-sea/>. (9)
McGovern, Patrick. "8 charged as members of same cargo theft ring authorities broke up
10 years ago ." The Enforcer - Transport Security, Inc. N.p., 19 Dec. 2014. Web. 12 May 2016.
<http://www.transportsecurity.com/news/archives/12-2014>. (6)
Saenz, Aaron. "10,000 Shipping Containers Lost At Sea Each YearHeres a Look At
One." Singularity Hub. N.p., 5 Apr. 2011. Web. 29 May 2016.
<http://singularityhub.com/2011/04/05/10000-shipping-containers-lost-at-sea-each-year-heres-alook-at-one-2/>. (10)
Sorkin, Saul. "Allocation of the Risk of Loss in the Transportation of Freight--The Function
of Insurance." Fordham Law Review. N.p., 1971. Web. 2 May 2016.
<http://ir.lawnet.fordham.edu/flr/vol40/iss1/3/>. (31)

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