Cargo insurance is one of the most proactive steps companies can take to protect their supply chain. Insurance safeguards shippers' financial investments during domestic and international transit, when product is the most vulnerable. While in transit, cargo is susceptible to natural disasters, severe weather, theft, pilferage, damage, fire and other challenges.
Earlier this month, a fire broke out on the Hapag-Lloyd vessel Yantian Express as it departed from the Canadian port of Halifax. Attempts to extinguish the fire were immediate, but weather hampered the efforts. Now, Hapag-Lloyd has formally declared General Average on its fire-stricken vessel and has diverted the vessel to the Bahamas for salvage purposes.
General Average is a principle of maritime law with ancient origins, requiring all parties with cargo on the vessel to proportionally contribute to the total loss based on the voluntary sacrificed cargo and vessel’s value. Shippers who did not purchase cargo insurance for their cargo would be held responsible for payment to the ocean carrier.