During the 2020 SAFETY4SEA Virtual Forum, the last panel focused on the challenges surrounding marine insurance claims such as the rise of damaged cargo and the increase of containerships fires, while discussed about how the COVID-19 pandemic has heightened the risk environment around the high value and temperature-sensitive goods and how shipping industry is affected in several ways.
It is known that the COVID-19 pandemic has highly influenced our today lives and shipping industry at the most. In the panel, experts Mr. John Dolan, Standard Club, Deputy Director, Loss Prevention along with Mrs. Eva Ioannidou, UK P&I Club, Senior Claims Executive, Mr. Gordon Robertson, North of England P&I Club, Director (Greece) and Mrs. Elina Souli, American Club, V.P., Regional Business Development Director and FDD Manager Piraeus, shared their point of view on the coronavirus situation within the insurance sector in general.
From the Clubs’ perspective and from what it is noted so far, there are a couple of segments have been hit more firmly than others. According to Mrs. Elina Souli from the American Club, the first one is the cruise industry. “There have been a lot of coronavirus cases on many cruise vessels. As you can appreciate when you have 3.000 passengers onboard a vessel and more than a thousand of seafarers and admin employees onboard, in order to safeguard the health of everybody, go through the application of quarantine, the extend is huge”.
What is more, panelists noted that the container shipping industry has been also affected by the coronavirus due to the increased congestion at the ports. Starting from the Asian ports, the congestion situation has been spread to most of the ports around the global. Following the ports’ congestion, the delays on discharge of cargoes – in many cases featuring refrigerated cargo and sensitive goods – bring major financial losses.
Apart from the cruise sector, liner trades have been also facing difficulties. “While there are issues with damaged and sensitive goods, it is so easy to try and blame the ship or the carrier for those problems. A small delay somewhere else in the supply chain has probably caused the issue. The congestion in the ports, or the delays of crew changes and the quarantine issues are not carriers’ fault.”, Mr. Gordon Robertson from North of England P&I Club, marked.
If there is any mistake, any point on the half of the ship, or a lack of documentation, it is observed that these short of claims are often blamed on the ship and the carrier, rather than looking on what really caused the problem. Considering the coronavirus era, there are also seen documents problems.
We see people try to fast track the release of cargoes, changing the rules on what documents need to be present when you collect your container; and that is not always helpful from a P&I cover perspective, as we like bills of landings to be presented when people have to leave a cargo
..Mr. Gordon Robertson added.
However, there is always a chance that the cargo is still sitting in the port, because the bill of landing hasn’t arrived yet at the destination. This leaves the individuals unable to pick up the container, since there are delays all over the shipping industry. At the same time, another problem is the alternative solution. If someone can’t transfer cargo by container as they thought they could, they often try to board it on an airplane, but airplanes are very expensive. So, in this alternative, individuals try to bring that claim against the carrier and the club, in case they already have a contract in place for carrying something out.
Most of the Clubs are dealing with difficulties in respect of seafarers’ repatriation, while they can’t find a way to assist them not only with an illness, but when in need of an emergency evacuation following an injury. As it was further noted, the cost of treatment, of repatriation and medical evacuation has exploded. Among others, the quarantine, the loss of hire, or a possible COVID-19 case onboard can lead to severe financial issues. An additional point is that the owners have to bear operational costs, such as quarantine costs prior embarkation and after disembarkation and PEME costs that are higher than normal since the outbreak.
Another issue that is currently hitting the shipping industry amid the pandemic are the charterer clauses, which ask the ship operators not to include them on crew changes. With crew changes not allowed in many places around the world, shipowners have no choice but to deviate. Having that in mind, there are several debates between charterers and owners on who is to be countable for the cost of the crew changes, especially in the occasion where the owners must deviate in another port because the port that charterers have ordered the vessel to call, doesn’t allow crew changes.
“The performance and the mental health of the crew is also a charterer’s responsibility, as they have to cooperate with the owners, to get the crewmembers off and on vessels without being too aggressively commercially about it”
…Mr. John Dolan from Standard Club, concluded.
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