Increased containerized cargo stockpiling due to COVID-19 demand change significantly increases moisture damage risk

COVID-19 is affecting global supply chains in a huge number of different ways and, as consumer demand and manufacturing have fallen, the demand for storage has risen. Oil is being stockpiled in fleets of tankers while warehouses and container ports around the world are seeing cargo building to record levels. The UK warehousing Association has forecast that they will run out of space in two weeks’ time. Retailers report that they are holding vastly increased volumes of inventory with some companies using 40% more storage than usual.

The knock-on effects of this are that, across the world, many shipments are being delayed and held in containers for far longer and in different conditions than they would have been before the crisis. Both exportation and destination ports are being affected and the problem is being increased by the need to prioritize more urgent shipments such as the food and medical supplies that are vital to sustain populations through the pandemic. While restrictions remain in force, consumption of non-essential products is likely to remain static or greatly reduced, and the delays to shipments are likely to worsen. For seasonally sensitive shipments, the wait may be even longer. International freight and logistics insurer, TT Club has warned of the additional risk this is bringing to cargo damage for manufacturers and Logistics Providers. 

One of the major threats to your cargo is the increased risk of moisture damage during delays caused by prolonged cargo transit times due to COVID-19 triggered demand changes. Depending on the nature of the cargo, this could result in corrosion, mold, caking of powders, warping or simply the damage to packaging and labels. Global cargo monitoring studies reveal that the risk of moisture damage increases by 4.2% with every day of delay during shipment. The UK P&I Club estimates that 9% of cargo is lost to moisture damage at the best of times and the longer cargo is sitting in a container, the greater the threat of moisture damage to the cargo. The risk of “container rain”is significantly increased when containers experience extremes of temperature change. Worse still, it is a risk that is not generally insurable as insurers class this sort of damage as “fortuitous” and excluded from their normal cover As a consequence of the stockpiling of containerized cargo due to supply chain disruptions caused by the global COVID-19 pandemic, manufacturers who normally only have relatively low risks of moisture damage for their cargo are now exposed to significantly higher moisture risks.

This is why it is vital that manufacturers protect their cargo from moisture based on specifics around cargo type, routes traveled and loading conditions. The advantage of doing this is that costs for Moisture Control Solutions can be minimized and efforts can fully be tailored to specific moisture damage risks relevant for the manufacturer.