GUIDE TO CARGO CARRYING CONVEYANCES
FLAT RACK CONTAINER


Prepared by IMUA's
Loss Control and Claims Committee


Copyright ©2005 Inland Marine Underwriters Association



IMUA STATEMENT

The Inland Marine Underwriters Association [IMUA] is a not-for-profit national trade association focused on the commercial inland marine line of business. IMUA was organized in 1930 as a national trade association and rating bureau for all inland marine classes. In 1948 the rating bureau activities of the IMUA were transferred to the Inland Marine Insurance Bureau (now defunct) due to the 1944 US Supreme Court decision in the South-Eastern Underwriters Association case.

Today, IMUA is comprised of --

  • Members - insurance and reinsurance companies that underwrite a significant portion of the commercial inland marine insurance in the U.S.
  • Associate Members - companies or organizations that provide products and/or services to the insurance industry.
IMUA is committed to advancing the educational, governmental regulatory and technical interests of the commercial inland marine insurance industry.

One of the services IMUA offers its members is the publishing of information for use by underwriters, loss control and claims specialists, and other interested parties. The topics covered by IMUA Reports, Bulletins and News Articles are intended to provide an overall awareness of the issues, hazards and exposures associated with a specific industry or inland marine class of business.

Volunteer members of a technical committee of the IMUA or IMUA staff have produced this information. Committee members abide by antitrust restrictions while compiling information.

It is generally not possible to treat any one subject in an exhaustive manner, nor is it IMUA’s intent to do so. No warranties are made regarding the thoroughness or accuracy of the report or any part of it. Nothing in this report should be interpreted as providing definitive guidance on any question relating to policy interpretation, underwriting practice, or any other issues in insurance coverage.

IMUA does not prescribe to its members how to make underwriting or claims decisions, nor does it require that analysis follow any particular format.


IMUA offers thanks and appreciation to the Committee members for their contribution to this Report:

Loss Control and Claims Committee
Barry Tarnef (Committee Chair) - Chubb Marine Underwriters
Dave Matana (Co-Chair) - ISO

George Gazey - Fireman's Fund Specialty Underwriters
Harry Graves - Spumifer American
Satish Jain - General Star
Stacy Kaufman - LoJack Corporation
Keith Kempf - Arch Insurance Company
Brian Marburger - St. Paul Companies
Donna Popow - American Institute for CPCU
Jim Titterton - Chubb Marine Underwriters


TABLE OF CONTENTS

Description

Characteristics

Values

Exposures

Loss Prevention Considerations

For Further Information


GUIDE TO CARGO CARRYING CONVEYANCES
FLAT RACK CONTAINER

Description

This container type consists of a flat bed with fixed ends. It should also be noted that some of the taller containers, both in the 20- and 40-foot size are fitted with collapsible ends. The external dimensions conform in all respects to the prescribed requirements of the ISO (International Standards Organization). The typical flat rack has a steel frame and end walls and a softwood floor. The 20-foot container can come with forklift pockets to enable handling by this type of cargo equipment.

The flat rack container is designed to facilitate the carriage of cargo that is in excess of the dimensions available in either the General Purpose Dry Cargo container or the Open Top container. Some examples are over-sized machinery and pipe lengths.

The flat rack container comes in two (2) sizes, 20-foot and the 40-foot long. The nominal measurements are 20 x 8 x 8 foot high, 20 x 8 x 8.5 feet high and 40 x 8 x 8.5 feet high. However, the inside or operational dimensions of the standard 20-foor container are 19.5 x 7.85 x 7.125 feet (from the deck to top of the sidewalls). The taller 20-foot container has varying dimensions but average about the same. The 40 x 8 x 8.5 feet high container also has variable measurements but is generally about 39.4 x 7.7 x 6.5 feet.

One London-based container leasing company has recently come up with a high cube (9.5 feet high) flat rack. This new model allows shippers to load cargo up to the 9.5 feet and still enable cargo handlers to lift the unit using standard spreaders bars during loading and unloading operations. This means that even when a tall item is involved, the flat rack will not have to be lifted using vertical wires or chains attacked to the ends of the container. This design appears to be aimed directly at project cargo and machinery shipments in an effort to compete with Ro-Ro (Roll-On, Roll-Off) vessel operators.

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Characteristics:

The skeletal design of the flat rack container allows approach and loading and unloading from either side, from the top or depending on whether the ends are collapsible, from both the front and rear. When the ends are dropped down, longer items can be accommodated. Also, when the ends are down, the flat rack is often referred to as a platform container.

Since the flat rack employs the same footprint as other containers, it is possible to load and stow them in conventional cellular container ships. However, when the cargo is outside the normal length, width or height, there are obvious limitations as respects to vessel stowage. Often flat racks, by necessity, are stacked on top tiers, often taking up more than one container slot.

The container floor is robustly constructed allowing stacking of cargo. The container has numerous very strong lashing devices on the corner posts, longitudinal rails as well as the floor. With the fixed ends in place, there are added supports for keeping the load secure and in place during handling and transit. Further, while most flat racks are not delivered with uprights or stanchions, there are spots at both longitudinal rails for their insertion. Again, these would serve to help transport and contain certain cargo.

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Values:

Like most non-mechanical containers, the flat rack has a relatively low construction cost. The cost of this and for that matter any new container can vary and is a function of such variables as the price of steel, labor costs and the macro-economics of the region where the container is built and that of the container and shipping industries. Even with the recent announcement by the second largest container manufacturer in the world that they plan to double their output (to 1 million TEUs or Twenty-Foot Equivalent Units) by 2006, the anticipated increase in global demand for containers pushed the price for new containers up approximately five percent.

In addition, statistics compiled by the Institute of International Container Lessors, the average cost of a standard flat rack container is approximately $3,300 (20-foot) to $5,400 (40-foot) in 2005. Since there are far less 20-footers built (only 2% of total flat racks planned), they are relatively more expensive in the marketplace.

There is an active leasing market and thus older containers are readily available for re-sale. These containers have different life spans depending on their specifications and care/maintenance but generally are removed from service every 10-12 years. A flat rack container tends to transport outsized cargoes and typically travels to inland project or plant sites in all kinds of climatic conditions, often stored for times open to the elements. Therefore, the length of time they are usable is far more volatile than the general purpose dry cargo container.

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Exposures:

Because of the specialized nature of the flat rack, it and the cargo it transports, are susceptible to only a fraction of the perils of the other container types. Theft, pilferage and non-delivery are non-issues. The shipments are large, heavy items that are not theft-attractive, having value only to the consignee. Therefore, there is no need for a security seal, either indicative or barrier-type; in fact, there is no logical location to affix a seal.

The cargo on a flat rack is by design of the container exposed to fresh and seawater. There is no weather protection per se as tarpaulins or other cover materials are not supplied. If the cargo can be damaged by any type of moisture or exposure to the elements, ideally this should have been factored into the protective packaging or a tight fitting, waterproof cover should be used.

The flat racks are not fitted with structural sides or a top so there is an increased vulnerability to physical damage due to impact with cargo during handling and transportation.

Since the flat rack containers are usually stowed on deck of an ocean-going vessel or barge, they are exposed to the elements and subject to being washed overboard. For an over-the-road transit, similar weather exposure issues exist. The "roadability" of a flat rack and its cargo is always a concern simply due to the size and weight of the typical item being transported.

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Loss Prevention Considerations:

The International Convention for Safe Containers [ICSC], an International Maritime Organization [IMO] document was finalized in 1977 with several amendments since that time. The document makes certain structural requirements mandatory for containers moving in international trade. Approved units are issued safety plates that are affixed to the container at the time of manufacture. Examination of these pre-certified containers are then required at several intervals. The initial inspection occurs when the container is delivered to the initial buyer. Then, periodic inspections are required at 30-month intervals.

The appearance of the ICSC seal is by no means a guarantee of the container's suitability, especially as the container ages. The most important thing that a shipper can do when receiving a container for use is to conduct a thorough pre-shipment inspection. The shipper or its representative should take the time to carefully check for any damage/defects that might jeopardize the safe arrival of the cargo at destination.

The maximum payload listed by the container manufacturer can only be used if the cargo weight is distributed over the total floor area of the flat rack. If an extremely heavy item requires concentration of its weight over a relatively small portion of the floor, the shipper should discuss options with the steamship line.

A shipper must also pay close attention to the permissible weight limits in either road or rail transport to ensure that the load will be legal.

The container must be carefully inspected prior to use to ensure that it is suitable (free from structural defects) for the acceptance and carriage of the intended cargo. Of critical importance in an open top container are the lashing points. Not only must there be an adequate number but they must be in good operating condition to ensure the load will remain secured during handling and transportation.

Even with the lashing points and stanchions as support, if an item is long enough to require the ends of the flat rack container to be lowered, securing of the cargo can be problematic.

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For Further Information:

"Container Specification" by Hapag-Lloyd

"Container Packing" by Hapag-Lloyd

Lloyd's Survey Handbook by Lloyd’s of London Press Ltd.

"Shippers' Guide for Proper Stowage of Intermodal Containers for Ocean Transport" by National Cargo Bureau Inc.

"Safe Stowage, A Guide for Exporters" by The Canadian Trade Commissioner Service

International Institute of Container Lessors, Bedford, NY at www.iicl.org IICL member companies represent approximately 97% of the container leasing industry and about one-half of the world’s container fleet.

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