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May 27, 2020 at 12:47 am #1000187robdashParticipant
- Total posts: 87
News of containers lost at sea, such as the APL England off the NSW coast, may leave importers wondering the above question. There can be dramatic photos of containers hanging off the side of the ship, suspended as if by magic (the technical term for this magic is “Twistlocks”)
How Often Does this Happen?
Considering the number of containers moved around the world, not often. But once can be too often, if you are affected. A few years ago The World Shipping Council surveyed data over a nine year period. They found that an average total of 1,582 containers were lost at sea each year. Most of those losses were attributed to catastrophic events. Catastrophic events are usually ships that run aground, break up or sink.
In Australia alone, millions of containers are handled by Australian ports each year.
So Who Is to Blame?
There are laws, conventions and contracts regarding the safety of ship loads, containers, and other cargo. In recent years there have been moves to ensure safer loading. For instance, SOLAS is the international regulation whereby each consignor must verify the gross weight of the container. This helps load planners to ensure the heavy containers are not swaying about at the top of the stack, and raising the centre of gravity. In the past many containers were heavier than was declared. This made the stacks top heavy, and the ship less stable in rough weather. The number of parties with involvement in international shipping means it is not always easy to find all the reasons for a catastrophe such as multiple containers being lost. Factors to consider would include
- weight and nature of the cargo
- Stuffing (internal loading) of the container
- Load planning
- Loading and Lashing
- Actions of the vessel operator and owner
The Chain of Responsibility starts with the shipper, and necessarily includes many parties involved in the transport process.
How Will I be Compensated?
If you are unlucky enough to be the owner of goods lost or damaged in one of these events, you may be interested to know how it happened, but I am guessing the predominant business response would be “How do I get reimbursed?” You can read your contracts, study maritime law, definitions of “Acts of God” (or force majeure). But in many cases, the answer is quite simple. You must look to your own insurance arrangements.
Insurance for Goods In Transit
Goods in transit, or marine transit insurance is the policy designed for the owner of the goods to be compensated for loss or damage. There are normally three different levels of risk covered. these are defined by the Marine cargo institute clauses, A, B, and C
What if you use Air, Road or Rail freight?
Your Goods in Transit policy can cover all modes. Naturally, you need to disclose all details of the transport to the insurer. Don’t tell them its going by sea, and then send it by air without notification!
The important thing is to talk to your insurance broker and get the right insurance advice.
Despite the best systems and efforts, if you are importing or exporting regularly, you do have a risk of loss or damage in transit. You need to consider how to manage that risk. You may harbour notions of righteous accountability but in most cases the best advice is to take insurance or take the risk.
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