CARM: What all importers need to know about CARM

Why cargo insurance is a good investment!

On October 22, 2021, the Zim Kingston vessel was engulfed in flames off the coast of Vancouver. Severe weather caused a collapse of containers, sweeping more than 100 containers overboard. Ensuing damage ignited a fire in other containers with hazardous materials that quickly spread throughout the vessel. The salvaging of lost containers and the assessment of damages has now begun.

Container ships collapsing

Subsequent to this, on November 1st, the owners of the MV Zim Kingston, have declared “General Average”. This is a principle of maritime law whereby all stakeholders in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.

Examples of General Average include:

  • Jettison of cargo
  • Hull and engine damage, caused by efforts to refloat the vessel
  • Vessel assistance from tugs or other vessels
  • Discharge and reloading of cargo at a port of refuge
  • Damages to a vessel or cargo caused by firefighting

Losses covered by a General Average declaration are shared by every shipper that has freight on the on the vessel. The cost per uninsured shipper can be catastrophic. Moreover, uninsured shippers are unable to receive any surviving cargo until they have posted an Average Bond. In contrast, shippers with proper cargo insurance suffer little or no loss.

If you have questions about

cargo insurance

or if you want Universal Logistics to place cargo insurance on your behalf, please call Debbie McGuire, Director – Freight Solutions at (905) 882-4880, ext. 1308.

More Trade Alerts:

September 2023

Limited capacity in advance of China Golden Week holiday
September 14, 2023
Government agencies and businesses in mainland China will be closed for the Golden Week holiday from October 1 to 7. Normally space availability on sailings…

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