Tagged: Cargo, freight forwarders, liabilities, marine insurance

A shortage of containers is causing concern for freight forwarders and other container users, particularly as the subsequent impact from delays or damage can lead to additional financial costs.

Container manufacturers struggled to keep their factories open during the global economic slowdown and many were forced to close and lay off workers. The sudden turnaround in demand by shippers has caught many manufacturers unawares, resulting in a significant shortage.

The problem will become more acute as a number of factors come together:

• Growing consumer demand as the world’s economies begin to recover
• An increased emphasis on slow steaming, leaving more containers at sea for longer
• New box ships coming on stream – 28 containerships were ordered in September alone, 16 of which were 8,000 TEU or more
• The expansion of trade and the use of larger vessels, particularly in the intra-Asian, European and South American trades
• Congestion at terminals, especially in Indonesia, Philippines, Vietnam and Thailand

These factors are being further accentuated by the late arrival of documents due to flight delays strikes, volcanoes, weather, engine problems – as well as importers not paying sellers on time – leading to boxes remaining on wharves for longer.

Increased pressure is being applied to forwarders by shipping companies keen to ensure containers are collected and returned promptly.

In many instances, forwarders are being subjected to financial penalties for delays even when these are beyond their control.

Furthermore, the forwarder has to contend with claims for damaged or spoiled cargo, theft and pilferage of goods awaiting delivery, and the legal costs of defending spurious claims.

Protection may be available against most of these penalties, fines, errors, omissions and other claims exposures via our “Freight Services Liability” insurance cover. We also recommend that forwarders obtain competitive marine insurance cover for the cargo owner to protect their client relationships in the event of an unforeseen situation.

Please contact your usual broker at FP Marine Risks or email info@fp-marine.com if you would like to discuss how we may be able to help.

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