What happens during Container Inspection at depots?

What is container inspection, and why is this a necessary process conducted at container depots?

The role of Container Depots

The owners of shipping containers could either be a shipping line like Hapag Lloyd, or a container leasing company. These container owners usually make agreements with one or more container depots in different countries and/cities, for the storage of their empty containers.

In addition to storing empty containers, container depots offer additional services such as inspection, modification, cleaning and repair of containers.

Importers can thus surrender their empty containers here, while exporters can collect empty containers for export.

The need for Container Inspection at depots

As containers spend almost their entire life out of the hands of their owners, they are usually on hire to some other party.

As such, after a leasing arrangement has been entered into, there will usually be a need for a survey when the containers are “on hire”, or when they come “off hire”. In other words, container depots act on behalf of the container owners to check the containers that are returned or prior to leasing out.

In addition, shipping containers are also susceptible to handling damage. Depots thus also play a part to ensure that the container is structurally sound for export.

Categories of Container Inspections

Generally, container inspections at depots are split into 2 main types:

On-hire survey
Off-hire survey

On-hire Survey

On-hire survey refers to the inspection of a container made at the time a container owner takes delivery of the container under a lease agreement.

In other words, the container is being checked prior to collection for export.

During on-hire surveys, depots:

Check that the condition of the container meets the criteria specified in the lease agreement.
Create a detailed record of the container’s condition, with particular focus on any pre-existing damage or other defect. This is to guard against lessee being held liable for any damage which occurred before delivery of the container
Classify the container as general-cargo, food-grade, or other standard specified by lessee
For reefer containers, they will have to check the machinery and test the motors for bearing noise or leakage, to ensure the operational reliability of the container.

Off-hire Survey

Off-hire survey refers to the inspection of an empty container when it is returned to the depot for storage.

During off-hire surveys, depots:

Inspect the container and record all impact and other operational damage, as well as wear and tear
Document results of survey to customer, including breakdown of all adjustments
Checks that items identified as lessee damage conform to the agreed lease terms and to general industry practice
Deletes items relates to damage on the container before it was taken on lease by the lessee, wear and tear, warranty and prior improper repairs
If there are damages, determine the nature and size of the damages
If there are damages, determine the most cost-effective next step for the container (i.e. loading with cargo, repair, redelivery to lessor, empty positioning, disposal)

What is checked during Container Inspections?

The 7-point Container Inspection Checklist

The 7-point container inspection checklist serves as a guideline for checking the condition of shipping containers:

Undercarriage (outside)
Doors (inside & outside)
Left side
Right side
Front wall
Ceiling/Roof
Floor (inside)

Typically, all 7 parts of the container needs to be checked during container inspection.

Case Study: Container Return Process in Singapore

In Singapore, the container inspection process during return usually follows below:

First, the surveyor takes the lorry chit from the driver who is returning the container.
Next, he takes a photo of the container number and the container specifications plate.
He inspects the container e.g. floorboard, exterior.
If there are any damages, the surveyor makes a remark on the lorry chit and passes it to the driver for payment.
Stickers will be placed on the container to indicate the service required. For example:
- AV: Available
- DM: Damage
- WG: Washing
The driver will take the lorry chit and proceed to the depot counter, where he will make payment and take the Equipment Interchange Receipt. This receipt includes the apparent exterior status of the container.
If repair is required, the driver will then need to bring the container to the service area for repair. Otherwise, the container will be unloaded for storage.