More ship fires highlight need to protect cargo investment

Recent explosions and fires aboard containerships in China, India and Sri Lanka have starkly highlighted the essential need for shippers to ensure their goods are fully protected by appropriate insurance.

The most recent incident at Sri Lanka’s Port of Colombo involved a fire aboard the MSC Capetown III. The fire, which reportedly started in the under-deck cargo space, quickly escalated into an explosion. It was only the swift and effective response of firefighters that averted a potentially catastrophic disaster. Crucially, the vessel’s manifest showed only one container of dangerous goods, which had already been offloaded, along with 60 other containers, before the fire was detected.

This incident follows on the heels of two other significant fires in recent weeks—one aboard the Maersk Frankfurt off the Indian coast and another on the YM Mobility at Ningbo Port, China.

These events underscore two recurring issues within the shipping industry: the frequent mis-declaration of cargo and the worrying number of shippers whom mistakenly assume their cargo is automatically covered.

Accidental or deliberate mis-declarations can place crew, vessel and cargo at significant risk, while many shippers fail to ensure their goods are adequately insured against such dangers, mistakenly assuming their cargo is automatically covered by the consignor, consignee, or under the standard trading conditions (STC) of their freight forwarder or carrier.

However, these basic STC coverages are typically limited (sometimes just a few ￡ per kilo) and rarely sufficient to cover the full value of the goods, which leaves shippers vulnerable to receiving compensation far below their actual losses.

Moreover, an often-overlooked aspect of maritime transport is the principle of General Average (GA), where all cargo owners share the risk and costs associated with protecting the vessel.

If expenses are incurred to save the vessel, continue the voyage, or deliver the cargo, these costs can be reclaimed through GA. Despite its importance, GA is a complex and relatively rare procedure in marine insurance, leaving many shippers unaware of the need to insure against it.

To avoid the significant financial risks posed by such incidents, it is imperative that shippers secure comprehensive All Risk marine insurance.

By partnering with leading providers, we offer insurance solutions that ensure your cargo is fully protected throughout its journey, whether during transportation or storage.

Our All Risk policies are available on a per-shipment or annual basis, providing peace of mind and robust protection against the unexpected.

To discuss the issues highlighted here and to learn about our marine insurance products, please EMAIL [email protected] for our immediate attention.