First, a fire in Maersk Honam in the Arabian Sea was a stark reminder of the dangers the crew faced in the ocean. The Singapore-flagged vessel was en route from Singapore to Suez with 12,416 TEUs on board when the fire broke out. At the time of writing, the blaze, which had been raging for five days, was under control, but four crew members were reported to have died in the blaze.
This first underscores the importance of crew safety at sea. But as a shipper, knowing that you have ocean freight on a burning ship is worrying. The Indian Coast Guard classified the blaze as a "chemical fire", which raised questions about the safekeeping of cargo and the declaration and documentation of all cargo, whether dangerous or not.
It really underscores the importance of having cargo insurance.
Why should you always buy cargo insurance?
By law, all carriers are obliged to provide a minimum amount of insurance. But as the word suggests, it offers limited coverage. As a shipper, you can and should purchase additional cargo insurance to further protect your merchandise. This will cover your shipment in storage and in transit until it reaches the buyer's safe hands.
The stowage list for each ship is prepared based on the data on the manifest provided by each shipper carrying the cargo. Accurate cargo declarations play a vital role here. Due to the large volume of shipments by sea, customs simply does not have time to physically inspect and verify each shipment.
As a shipper, you can only ensure that you play your part by filling out all documents and declarations as accurately as possible. This includes bills of lading and packing lists, etc. You may not have control over other cargo on the same ship, or LCL containers, but you should take the worst-case scenario of every shipment - cargo insurance.
What is a general average?
There is a concept in the maritime world that everyone in the industry should be familiar with - generally average.
Legal Definition of General Average
"A principle of admiralty law, in the event of an emergency, if the cargo is abandoned or costs are incurred, the loss is prorated among the parties who have a financial interest in the voyage."
Unless you have general average insurance, general average is separate from the ocean cargo insurance purchased for your cargo. But with insurance, you can at least insure against loss or damage to your cargo.
What your cargo insurance covers
Cargo insurance varies by cargo, and different insurance companies have different names. In general, however, all cargo insurance should cover physical damage to the cargo due to unforeseen circumstances beyond the owner's control. These apply to marine accidents, shipwrecks, pirates, etc. All this is provided that the goods are properly packaged according to their type of transport. Appropriate declaration forms must also be completed if necessary.
If your cargo suffers damage due to poor packaging, it is unlikely that your cargo insurance company will cover those losses. Please contact your freight forwarder (TJ chinafreight) or insurance company for more information on the policies available to you.
