Earlier this month a cargo ship, ONE Apus, is reported to have lost almost 2,000 containers after being hit by stormy weather in the Pacific Ocean. Travelling from China to California, the vessel became caught in a violent storm around 3,000km northwest of Hawaii. A swell caused the ship to roll and dislodge a large number of the containers on board. Over 1,900 containers are believed to have been lost or damaged. See the full story here.
Accidents of this scale are fortunately quite rare, although an average of 1,382 containers are lost each year at sea, according to the World Shipping Council. If you export your goods by ship, would you be able to absorb this loss?
Incidents like this really highlight the risks involved in physically moving goods around the world, and the importance of mitigating those risks by having appropriate insurance in place. So many things are beyond your control during the transportation process, and further complicated by distance and foreign laws and regulations. International trade comes with a number of risks but also huge opportunities for growth. Successful exporting is all about taking the necessary steps to minimise those risks to an acceptable level, whether you’re a large corporation shipping millions of pounds worth of goods, or an SME looking to expand their business into overseas markets.
Cargo insurance covers your goods in transit, whether by ship, air, or road. It offers you, as an exporter, cover should anything happen to them while being transported. Of course, this doesn’t just mean major incidents like those reported here, it also includes damage, loss, or theft at any point until they reach their destination – including when being held in storage. It can even cover you for delays.
It is important that you agree which Incoterms®2020 you use with your buyer as this determines where the risk passes from you to them. From here you can work with your insurer to put in place the appropriate cover for your goods to ensure that should any loss occur; you would be protected.
Read more about cargo insurance here.
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