2 April 2021
Marine Cargo – ‘Ever Given’ Suez Canal blockage impact
All customers with cargo onboard must contribute to the costs of the recovery and salvage costs to the Ever Given.
If you have an Ascend Cargo insurance policy then this will be covered under the General Average extension - if you do not have marine insurance you risk losing the cargo as the owner of the vessel can hold the goods under lien until the deposit is paid.
General Average is a principle of maritime law that requires the shipowner and its customers to share a proportionate amount of the costs associated with saving a vessel after a major casualty. When General Average is declared, cargo owners are required to contribute to a GA fund before cargo can be released.
While the backlog of vessels waiting to transit Suez is now expected to be cleared over the next couple of days, shippers and freight forwarders with cargo on the Ever Given could be in for a long wait for it to be released, as the loss is calculated by loss adjusters.
General Average was declared following the 2018 fire on board the Maersk Honam. After declaring GA, the adjustor fixed the salvage security at 42.5% of cargo value and 11.5% as a GA deposit – this meant a shipper with a cargo worth $100,000 needed to pay a combined deposit of $54,000 to get its cargo released.
This leaves shippers with uninsured cargo highly vulnerable to losing it, as the owner can hold the goods under lien until the deposit is paid. Shippers with insured goods will have those deposits covered by their insurers.
According to panellists on a recent webinar on container casualties, held by the London Shipping Law Centre, GA is only declared in incidents which have incurred an extraordinary loss – the general rule of thumb being a loss of over £10m on a ship of 15,000 TEU or bigger.
Whatever the outcome, this is another reason you should have all your goods insured under an open marine cargo policy.
https://ascem9toru.nimpr.uk/marinecargo/
Ascend Marine Cargo Video:
While the backlog of vessels waiting to transit Suez is now expected to be cleared over the next couple of days, shippers and freight forwarders with cargo on the Ever Given could be in for a long wait for it to be released, as the loss is calculated by loss adjusters.
All you need to know about Marine Cargo insurance
General Average was declared following the 2018 fire on board the Maersk Honam. After declaring GA, the adjustor fixed the salvage security at 42.5% of cargo value and 11.5% as a GA deposit – this meant a shipper with a cargo worth $100,000 needed to pay a combined deposit of $54,000 to get its cargo released.
This leaves shippers with uninsured cargo highly vulnerable to losing it, as the owner can hold the goods under lien until the deposit is paid. Shippers with insured goods will have those deposits covered by their insurers.
According to panellists on a recent webinar on container casualties, held by the London Shipping Law Centre, GA is only declared in incidents which have incurred an extraordinary loss – the general rule of thumb being a loss of over £10m on a ship of 15,000 TEU or bigger.
Whatever the outcome, this is another reason you should have all your goods insured under an open marine cargo policy.
https://ascem9toru.nimpr.uk/marinecargo/
Read more blogs from Ascend:
A guide to freight forwarders insurance in the ukHave any questions? Please don’t hesitate to contact one of our team
matt.price@ascendbroking.co.uk | Office: 01245 449062 | Mobile: 07841 020712
