– Article first published by supplychaindive.com on December 11th, 2018. –
Maersk will offer an alternative to cargo insurance to cover goods while they’re in Maersk’s care, World Maritime News reported.
Called “Value Protect,” the extended liability solution will cover loss or damage to cargo from fire, accidents due to the danger of the sea, theft, natural disaster, cyber incidents, damage caused by delay and contributions in General Average, all of which are excluded under conventional terms for carriage. Customers can select coverage in addition to or as a substitute for standard cargo insurance. Insurance is available for commodities shipped via dry containers and selected commodities moved in reefer containers.
The add-on coverage will allow shippers to cover the risk of loss, including General Average payouts that are not covered by standard marine cargo insurances. Also, international conventions limit carriers’ liability and set limits for cargo loss payouts.
Estimates vary from 30% to 50% on the amount of ocean cargo that is uninsured, according to The Loadstar.
“We are very pleased to introduce this new solution to our customers. We take care of every container we transport. Yet, some events might be outside of our control, such as extreme weather or perils of the sea that may result in cargo loss or damage,” said Klaus Rud Sejling, head of logistics and services at Maersk.
Maersk experienced what is thought to be the largest General Average average due to the loss of the 15,000-TEU Maersk Honam, an incident in March in which five crew members died during a fire. Under the York-Antwerp General Average Rules, shippers and vessel owners contribute to a fund that compensates owners for lost cargo.
In the case of the Honam, shippers were tapped to pay 54% of the value of the cargo to have the cargo released. The new protection offers coverage in General Average situations, which are not otherwise covered by cargo insurance.
However, a Maersk spokesman said the loss of the Honam was not the impetus for the Value Protect insurance plan. In the wake of the incident, Maersk reviewed international regulations and practices for dangerous goods stowage and updated some of its procedures that direct where on the vessel certain cargo can be carried.
The Value Protect package will be offered at a fixed price that will be added to the standard shipping invoice. It is currently available in several countries and will be gradually rolled out worldwide over six months.