For obvious reasons, no one wants to receive cargo claims. More so, carriers who carry the cargo from A to B. It could possibly be the reason why there is a lot of misunderstanding among BCOs and OTIs about which documents are really necessary to submit and which are completely irrelevant in the process of claims recovery.
Below are some simple guidelines for claims handling and submissions. I hope this will help to make the claim submission process as efficient and as simple as possible for you.
As we have all seen, COVID-19 is causing severe imbalances in world trade which is affecting everyone, whether it is an exporter, importer, shipping line, shipowner, freight forwarder, trucker, or a spaza shop around the corner..
While ships are moving, ports are discharging and loading containers, nothing is as yet at a 100% capacity in most of the countries around the world..
Ships are facing port congestion resulting in blank sailings, containers are stuck in storage at ports, terminals, and depots around the world for later deliveries creating longer delays than anticipated and also causing yard space congestion..
In view of the delays experienced by the trade, we look at the question – Does ICC (A) cover cargo claims due to COVID-19 delays..??
There are several reasons that cargo inside a container could damaged. It could be due to improper packing of cargo inside a container, incorrect container used for the cargo carried, but one of the main reasons for cargo damage inside a container is the condition of the container itself.
Wet damage due water ingress (rain, seawater etc) into the container ;
Wet damage due to condensation inside the container when an incorrect type of container is used like using a normal container instead of a ventilated container ;
Contamination due to adjacency risk or odor transfer ;
are some of the common types of damages reported on cargoes that are packed in containers.
As a general rule, shipping lines reject these claims confirming that the gate out documents of the containers were clean at the time of release to the shipper. Insurance companies use Unseaworthiness and Unfitness Exclusion Clause stated in ICC (A) not to cover similar claims either, unless the insured can prove that he was not aware of the condition of the container at the time of loading.
Obviously, this situation causes a lot of frustration, feelings of injustice, and could result in absorbed losses among shippers globally.
So should the shipper simply accept this rejection of claims and move on?
The world is in the midst of the COVID-19 pandemic and the global economy has been greatly hit due to this. You may agree that during such time, it’s important more than ever to find ways for saving costs and take all measures possible to safeguard your business.
As a small or midsize business, there is no doubt that you are familiar with the stress of operating on tight margins, and you know how valuable even a small percentage of cost-savings can be to your bottom line.
However, what many small businesses don’t realize, is that their supply chain – particularly when it comes to imports – can be a significant source of cost savings!
Abandoned cargo could be quite stressful for shipping lines, shippers, port authorities and forwarders alike and is considered to be a big headache for everyone concerned..
When a cargo is abandoned it causes severe financial losses to all parties concerned – seller, buyer, shipping line, freight forwarder, transporters, banks, Government etc etc..
It could also cause a rift in business relationships between a shipping line and their customer – whether it is an importer or a freight forwarder because it could create a blemish in the customer’s record with the shipping line..
When is a cargo considered to be Abandoned Cargo..??
On the 3rd of Jan 2019, part of the Yantian Express a 7,510 TEU, 320m German-flagged ship of Hapag Lloyd went up in flames while on its way from Colombo to Halifax via the Suez Canal..
The Bundesstelle für Seeunfalluntersuchung (BSU) or Federal Bureau of Maritime Casualty Investigation undertook an investigation on the fire on board and the results have been released..
This investigation report demonstrates that it is not all that easy to pinpoint the exact cause and reason for such incidents but it does a great job in identifying certain possibilities and also finding out other information in the meantime.. Truly interesting..
The route to the conclusions reached by the investigators is very interesting to read and shows the many important considerations that are required when preparing your cargo for export..
Do I need cargo insurance for my shipment..?? Is a question asked by many customers around the world.. Whether they are exporters or importers or traders.. This is question that has been going for long and is expected to go on longer..
As much as we discuss why cargo insurance and insurers matter, in the recent past the question of who is the cargo insurer is coming to the fore as the line between the shipping line(s) and logistics services providers seems to be getting blurred..
Cargo theft can occur anywhere along the supply chain affecting local logistics, transporters, storage yards, groupage operators, LCL consolidators, ports, depots, terminals, insurance, carriers and freight forwarders equally..
BSI Supply Chain Services and Solutions assesses that companies lose more than an estimated $76 million in UK alone due to cargo theft highlighting the seriousness of this issue..
TT Club one of the leading providers of insurance and related risk management services to the international transport and logistics industry and BSI have come together yet again to release the second edition of their report on global cargo theft covering the full year of 2018..