• February 5, 2020
• By ONE
• 0 Comments

ONE Marine Cargo

“Whatever Burns Never Returns”

There are many challenges faced by the shipowners and crew during sea voyages, in particular, fires that often break out which have devastating consequences.

The maritime industry has in recent times experienced a number of major losses from fire and one such loss can be seen below: the Maersk Honam incident that occurred on March 6, 2018.

This 353-meter ship is one of Maersk’s ultra-large container ships which was transporting 7,860 containers, some of which contained hazardous cargo, when the vessel caught fire in the Arabian sea whilst en route from Singapore to Egypt.

It took approximately 5 weeks to completely extinguish the fire and it was only thereafter that the recovery and salvage operations were able to take place.

Unfortunately, the fire did claim the lives of five crew members along with the large number of containers that were damaged.

Due to the extent of the fire and water damage having caused a total loss of cargo in the ship’s three holds, Maersk declared General Average on the vessel.

Another fire occurred on the Yantian Express where the fire started in a single container on January 3, 2019 and spread to additional containers on deck resulting in the ship owner declaring General Average.

Not much later on January 31, 2019, the APL Vancouver suffered a fire in one of the ship’s cargo bays, the cause of which is still being investigated.

What is General Average:

Where an extraordinary event arises (eg Fire on board a vessel, Collision) and there is a serious threat to the ship, cargo and crew, the shipowner declares General Average which means all parties who are involved in that voyage shall be asked to proportionally share the losses from the incident.

All cargo is seized, and cargo owners are held responsible to share proportionally in the total loss even if their own cargo was undamaged. Cargo owners will then be required to put up a cash bond or the cargo insurer puts up a General Average Guarantee (if insurance is in place) in order to have the cargo released.

A General Average claim may take years to resolve and can run into millions of Rands as there are a number of parties involved from attorneys to adjusters specialising in General Average, and the computations are extremely complex.

The need for Marine Cargo Insurance:

The above incidents form a small part of what could potentially happen to containerised goods whilst on board a vessel at sea and makes purchasing cargo insurance an essential business decision.

General Average is a recoverable peril in terms of marine cargo insurance and provides broad protection and peace of mind for companies that import or export goods via sea-freight and may find themselves in a General Average situation like the Maersk Honam.

Without the appropriate cover, the cargo owner who would be liable to contribute their proportion of the damage could find their cargo being held as collateral for the payment of those charges.

The ONE Marine Policy can be tailor made to protect your financial interest in the goods.

Some of the features include:

• Cover for goods shipped by Sea, Air, Road, Rail or Post.
• Cover is based on the Institute Cargo Clauses (A), (B) or (C)
• Encompasses Imports, Exports, Inland Transit, Cross Voyages