CARM: What all importers need to know about CARM

Universal Logistics - Take The Right Route Logo with 70 Years Badge

Route Article

Why you need to have cargo insurance


     Containers damage

The recent incident involving the 14,000 TEU Ocean Network Express containership ONE Apus is a prime example of why you should always plan for the unexpected when it comes to arranging cargo insurance.

While en route from Yantian, China to the Port of Long Beach, California on November 30, 2020, the ship encountered a violent storm producing gale-force winds and large swells, which caused the vessel to roll heavily and resulted in the loss of 1,816 containers at sea and what could be thousands of damaged containers on the ship’s deck.

This unfortunate event comes during the last big rush to get Chinese exports to US consumers before Christmas.  Shippers without cargo insurance will be faced with substantial losses for their goods and significant delays are expected for any goods not damaged or lost.

The vessel turned back and docked safely in the Port of Kobe, Japan on December 8th.  It is expected to take some time to offload the dislodged containers that remain on board.  A thorough assessment will be made on the exact number and type of containers that have been lost or damaged, followed by a full investigation by the relevant maritime authorities.  Speculation is the cargo claims could top $50 million. 

This incident is thought to be the largest loss of boxes in a single event that did not involve a fire or sinking.  It exceeds the average number of containers lost in an entire year from all vessels around the globe.

Shippers with cargo on board the ONE Apus have been warned to expect General Average to be declared on the casualty.  When the vessel owner declares a general average, the owner and all the cargo shippers are obliged by law to share, on a pro-rata basis, the expenses associated with the general average declaration.  The cost per uninsured shipper can be catastrophic, even if the value of their shipment is low.  By ensuring you have adequate cargo insurance in place, which includes coverage for General Average, you are protected from such overwhelming financial risks.

For information and tips on cargo insurance, be sure to read our special edition of RouteAll about Cargo Insurance.  And remember…it always pays to be insured for the unexpected!

For more information, contact David Lychek, Manager – Ocean & Air Services.

Quick Tip #42
Carefully inspect all freight to identify deficiencies in packaging

Problems that seem small at the time of loading can get much worse in transit, sometimes resulting in damage to the entire load.

Switch to a Logistics
Partner Who Cares

Click the button below to find out why we’ve been Canada’s most trusted freight forwarder and customs broker for over 75 years.

Professional business people team meeting and working in corporate office concept

Register now to learn more about our

101 Logistics Quick Tips

Available exclusively from Universal Logistics