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Cargo Damage Surveys: A Global Perspective

14/10/202312/10/2023 by encarna

A container ship sailing near the coast, where cargo damage surveys may occur.

1. Understanding Cargo Damage Surveys

When cargo is affected, damaged, or appears to be missing, a thorough investigation is imperative to discern the nature, cause, and extension of the damages. These investigative processes are known as the Cargo Damage Surveys. Within the marine cargo industry, the damage surveys are typically conducted on behalf of ship owners, operators, and charterers as well as logistics service providers, cargo insurers, claim handling companies and Protection & Indemnity (P&I) clubs.

2. Cargo Damage Surveys location and time

The location of the damage cargo surveys can vary based on the specific circumstances of the incident and the state of the cargo. Such issues can arise during port operations, during the loading or unloading of trucks, handling within a warehouse, or even in-transit.

To illustrate, consider the following potential scenarios:

Post-offloading from a bulk carrier, damage to grain cargo becomes evident and is duly noted by the consignee.
Within a warehouse setting, upon opening the shipment, the consignee identifies an unsettling absence of several boxes.
At a port, the consignee, while unloading a container, notices a broken seal. This prompts a thorough check of the content, revealing missing merchandise.
A refrigerated container fails health inspection due to temperature fluctuations during its road transit.
In the throes of a tempestuous sea voyage, concerns arise that the contents of certain containers might have been compromised. In some instances, shipping companies notify the consignee and/or the cargo owner about potential damage, suggesting a shift of goods from one damaged container to another.
After an especially rough journey, visible damages are observed on vehicles being transported via a Roll-on/Roll-off (RoRo) ship.

In many cases, it’s the consignee who spearheads the dialogue with the cargo insurer, initiating a comprehensive damage inspection. While the conventional approach leans towards inspecting at the delivery venue, occasionally, depending on the severity or the nature of the damage, inspections might take place on the transport vehicle directly. At times, trucks or vessels might be held up, but more commonly, the cargo is unloaded for a detailed examination.

The consignee’s proactive engagement with the insurer not only accelerates the claims process but also ensures that potential issues are promptly addressed. This underlines the pivotal role of effective communication strategies and protocols when confronting cargo damage.

To safeguard the integrity of a claim and avoid potential denial due to negligence or oversight, it’s crucial that any suspicion or confirmation of damage be reported promptly. Not only is timely reporting essential, but it’s also vital that the initial inspection for any potential damages occurs immediately upon delivery, with notifications sent to all involved parties. Delays in reporting or initiating a survey could be interpreted as negligence by either the carrier or the consignee. Thus, it’s imperative to begin damage assessments as soon as they’re discovered.

3. Why are Cargo Damage Surveys essential?

Cargo damage surveys hold a key position in the maritime industry, primarily because they play a critical role in facilitating insurance claims, determining liability, making operational improvements, and ensuring regulatory compliance.

Whenever there is an event of damage, there often arises a question about who is responsible. Is it the carrier, the shipper, the cargo handlers, or even factors beyond human control? The survey helps establish the cause of the damage, helping ascertain the liable party. This clarity is indispensable as it helps involved parties to prevent or minimize potential financial repercussions from the damaged goods.

Furthermore, the marine insurance sector heavily depends on these damage surveys. They offer an objective perspective, aiding insurers in determining the legitimacy and amount of a claim. Without these surveys, the insurance process would be more complicated and prone to disputes.

Equally significant is the role these surveys play in enhancing operations and maintaining cargo quality. By identifying the reasons for cargo damages, shipping companies, port operators, and other involved entities receive invaluable feedback. This feedback is crucial as it enables these stakeholders to fine-tune their cargo handling and transport processes, which in the long run can minimize damages, save costs, and improve overall efficiency.

Lastly, regulatory compliance is a concern that cannot be sidelined, especially when the cargo in question involves hazardous materials. Certain jurisdictions mandate the reporting and investigation of such damages. Here again, cargo damage surveys rise to the occasion, ensuring that all regulatory standards are met and adhered to.

In summary, the significance of cargo damage surveys in the maritime domain is multifaceted, making them an essential tool that transcends mere procedural formality.

4. The process of conducting a Damage Cargo Survey

In very general terms, the process commences with the consignee or the cargo owner notifying the appropriate parties about the observed damage. This includes contacting the insurer, the cargo handling agent, and potentially a claims handling company. Although everything depends on the type of case, there is a general process that we can summery on the following steps:

Appointment of a Surveyor

Insurance companies, claims handling firms, or P&I clubs typically appoint a marine surveyor to conduct a thorough inspection. The selection of the surveyor often hinges on their area of expertise, their proximity to the cargo’s location, and the nature of the goods in question. Many insurance policies specify which surveyors are recognized or permissible. Depending on various factors – such as the location of the inspection, the magnitude of the loss, and the type of cargo or damage – there may be a need to control costs. In some cases, based on these considerations, it may be essential for the surveyor to be physically present, while in others, it might not be necessary.

Documentation

The initial notification should be accompanied by preliminary documentation, including:

Photographs of the damaged cargo
Shipping documentation (Such as Bill of lading, Packing list, and Cargo manifest)
Invoice value of the goods
Any other pertinent information.

Preliminary Inspection

This initial phase entails a direct evaluation of the cargo to determine the scale and nature of the damage. The designated surveyors inspect for evident signs of mishandling, breakages, leaks, contamination, and other irregularities.

A crucial aspect of this step is the preliminary damage estimation, which serves as an essential tool for insurance companies to allocate a reserve of potential costs. They’ll evaluate the cargo’s overall state and its packaging, identifying any inconsistencies between the received goods and the associated documentation.

Evidence and cargo sampling

Every observation made during the preliminary inspection is meticulously documented. This includes noting the date, time, location, and specific details of the damage. Photographic evidence is an extremely valuable evidence. High-resolution photographs or videos of the damaged areas, the cargo’s positioning, and any other pertinent observations are taken. These visuals offer a clear and irrefutable record, ensuring all stakeholders have a clear understanding of the damage’s extent and nature.

Interviews and statements

Witness accounts can be invaluable in determining the cause and timeline of damage. Surveyors often interview crew members, port staff, truck drivers, and anyone else involved in the cargo’s transportation or handling. These interviews help piece together the events leading up to the damage, providing insights into potential mishandling, environmental factors, or procedural lapses. Detailed statements are then recorded, providing a verbal testament to complement the physical evidence.

Sampling and laboratory testing (if needed)

If cargo sampling is required and cargo interests/their surveyors wish to take samples, the appointed surveyor should ensure that these are taken on a joint basis and are representative of the cargo in the space being sampled.

For certain types of cargo, especially perishable goods, chemicals, or other sensitive materials, physical samples may be taken for laboratory analysis. This helps determine issues like contamination, spoilage, or any chemical changes that might have occurred during transit. Laboratory tests offer scientific evidence of the cargo’s condition, adding another layer of proof and specificity to the survey.

Estimation of Loss

Based on the observed damage and market conditions, the surveyor provides an estimation of the financial loss. This valuation considers factors like the cost of repair, the diminished value of goods, disposal costs, and potential consequential losses.

Concluding Reports and Recommendations

The surveyor, from the outset, should strictly follow any specific guidelines or directives provided by the appointing entity. This ensures alignment in expectations and a smooth transition from preliminary findings to final conclusions.

Once all evidence has been gathered and analyzed, a comprehensive report is compiled. The heart of the surveyor’s duty lies in the comprehensive report, which is a culmination of all gathered data and assessments. This report should consist of:

Background Information: This includes details like affected parties, contractual relationships, shipping terms, conveyance specifics, voyage details, stowage and securing methods, and particulars of the affected cargo.
Detailed Inspection: A thorough examination of the damaged cargo detailing its appearance, the nature of the damage, its extent, and any peculiarities or anomalies noticed.
Determining the Cause: The surveyor conducts a comprehensive analysis to provide a professional opinion on the probable cause of the damage or loss. This assessment includes loss adjustment and claim calculation, which is underpinned by the evidence collected and reasoned deduction.
Recommendations: This section is dual-pronged – firstly, suggesting immediate steps to limit the impact of the existing damage and secondly, proposing measures to prevent similar losses in the future. These measures can include changes in packaging, enhanced handling procedures, or modified storage conditions.

The Preliminary Report

Terms of Reference: A brief on the mandate provided to the surveyor.
Vessel and Consignment Particulars: Information about the ship, its specifications, cargo details, contractual nuances, and other relevant specifications.
Cargo History: A chronological narration of the cargo’s journey, from the loading to the unloading ports.
Survey Logistics: Data about when and where the survey took place, and a list of all attendees.
Findings: A rundown on the damage’s nature, extent, and financial implications. This section should provide clarity on how conclusions were drawn, detailing sampling methods, analysis techniques, and mitigation measures. It should also highlight any discrepancies between the surveyor’s findings and those of other attendees.
Visual Evidence: An organized collection of photographs that substantiate the described damage and its context.
primera estimación de daños (cuantía). útil para que las aseguradoras hagan una reserva del dinero que puede costarles
Document Appendix: A compilation of all supporting documents that helped shape the surveyor’s conclusions.

In conclusion, the final report and its preliminary report are instrumental in the damage claim process. By maintaining precision, clarity, and thoroughness, the surveyor not only facilitates claim resolution but also bolsters trust and transparency among all stakeholders involved.

The finalized report is submitted to the insurer, the consignee, and other relevant parties. This document then becomes the basis for subsequent actions, be it insurance claims, recovery procedures, or improvements in cargo handling.

5. Types of Damage Cargo Surveys

The types of surveys have been grouped based on their relevance to the nature and type of cargo, ensuring that related items are categorized together:

Bulk Commodities Surveys

Grain
Minerals
Oil and petroleum products
Bulk Buyers Inspection: Examination of bulk cargo based on buyer’s criteria.
Petro Carbon Load/Discharge
Bulk Liquid: Oversight on liquid cargo operations like oil or chemicals.

General Cargo Surveys:

Machinery and equipment
Steel and metal products
Packed goods (cartons, boxes)
Electronics
Containerized Cargo: General cargo loaded into standard containers.
Cargo Lashing/Handling/Logistics: Inspection of cargo securement and handling methodologies.

Liquid Cargo Surveys:

Chemicals
Vegetable oils
Wines and spirits
Bunker Sampling: Taking fuel samples to ensure its quality and quantity.

Perishable Cargo Surveys:

Fruits and vegetables
Frozen food
Seafood and meat
Dairy products
Refrigerated Cargo: Perishables, pharmaceuticals.

Specialized Cargo Surveys:

Project cargo (large equipment, machinery)
Hazardous materials
Vehicles

Live Cargo Surveys:

Livestock
Exotic animals for zoos

Conclusion

Damage surveys are essential instruments with a range of critical functions. They not only aid in expediting insurance claims and establishing liability but also contribute to the enhancement of operational procedures and the assurance of compliance with regulations. These surveys hold a central role in this context, and their significance is further amplified by a global network of skilled surveyors.

At Marlin Blue, our team of international lawyers specializes in managing claims and ensuring the smooth resolution of cargo damage issues. If you find yourself in need of expert guidance and support in navigating the complexities of cargo damage surveys and related matters, do not hesitate to reach out to us. We are here to assist you in safeguarding your interests and ensuring a seamless resolution of any maritime disputes.

Thank you for taking the time to explore the world of cargo damage surveys with us. We look forward to serving your maritime legal needs and providing the expertise you require in this intricate field.

Yacht Crew Certification: Implications for Marine Insurance Claims

20/12/202428/09/2023 by encarna

1. The importance of yacht crew certification

There should be no doubt that the yacht crew’s responsibility is vast, ranging from ensuring passenger safety to maintaining operational efficiency. The crew, through a blend of experienced seafarers and domestic staff, is the guarantor of comfort and safety at sea.

In this post, we will review the international standards and regulations governing maritime crew certification, focusing on specific training and competence requirements to obtain a yacht crew certification.

2. The Minimum Safe Manning Certificate (MSMC)

The MSMC is a document issued by a country’s Maritime Authority for a specific vessel, ensuring yachts are safely manned according to international regulations. It is crucial to note: this is a minimum requirement.

This certificate dictates the minimum number of crew members required on board to ensure the safe operation of the vessel, considering various factors such as the type, size, purpose, and equipment of the vessel, encompassing navigation, crew safety, and environmental protection.

For instance, a recreational yacht measuring 75 feet may be required to have a Minimum Safe Manning of three crew members, including one captain and two deckhands, to operate safely and efficiently, taking into account some of the aforementioned factors, in contrast to a 150-feet commercial yacht, which may necessitate a larger crew with specialized roles.

3. Certification and licensing requirements in yacht crew certification

The diverse responsibilities aboard a yacht demand specialized training and skills development. For owners and operators, especially those with limited resources, orchestrating comprehensive training programs and skill enhancement opportunities is daunting yet imperative. Herein, the uniqueness of each yacht’s operational needs is addressed, focusing on a multitude of aspects, from catering to navigation. All masters, officers, and crew members are required to possess proof:

Standards of Training, Certification, and Watchkeeping (STCW)

The STCW is a comprehensive set of international regulations intended to ensure that the highest standards of seafarer competence are maintained globally. It outlines the minimum qualifications, training, and certifications that seafarers need to work on a ship, focusing on promoting maritime safety and environmental protection.

Basic Safety Training (BST)

Basic Safety Training is a standard preliminary safety course for all seafarers, as mandated by the STCW. It covers fundamental safety aspects, including personal survival techniques, fire prevention and fire fighting, elementary first aid, and personal safety and social responsibilities, preparing the seafarers to handle emergency situations effectively.

Seafarer’s Identification and Record Book (SIRB)

The SIRB serves as an official, internationally recognized document that provides a record of a seafarer’s employment on board ships. It acts as an identification document containing vital information about the seafarer and their career history, ensuring their identity and service history are readily available during inspections.

Certificate of Competency (CoC)

All masters and officers listed on the MSMC are required to possess a valid Certificate of Competency (CoC).

A Certificate of Competency is a form of license provided to seafarers, proving that they have met the specific requirements and qualifications needed for a particular rank or function on a ship. It verifies the holder’s skills, experience, and understanding of their duties and responsibilities, ensuring they are competent to perform their role on board safely and effectively.

Navigating the various regulations and ensuring compliance can be challenging, especially for multinational yacht operations.

4. The prevalence of the Maritime Labour Convention (MLC)

The Maritime Labour Convention (MLC) often serves as the criterion standard in the realm of maritime employment rights.

It stipulates that yacht owners should implement proper protections for their crew.

This involves issuing proper employment contracts with clear provisions about salary, sick pay, and repatriation rights in case of accident or dismissal.

Compliance with the MLC isn’t mandatory for all vessels. It’s only ratified in certain countries and is enforceable only for commercial boats.

5. Insight into Marine Claims

Crew negligence vs Crew incompetence

Understanding the difference between negligence and incompetence is essential for proper claims management.

Crew negligence

Briefly: a failure to take reasonable care by the crew.
A loss caused due to crew negligence is (mostly) covered by yachts insurance policies.

Crew incompetence

It is a failure on the part of the owner
It is directly related to the concept of unseaworthiness.
The unseaworthiness of the yacht could result in a rejection of the claim.

Rental boats: A rising problem

Yacht Charter Without Captain and /or License is on the rise in tourist destinations such as The Balearic Islands:

Accidents and injuries: Leading to injuries to passengers or third parties
Damage to the Yacht and collisions with others
Weather-related Issues
Environmental concerns

6. Key Takeaways

Be curious and look out for:

Minimum Safe Manning Certificate (MSMC).
The training of the crew and if they hold specific certifications like STCW, BST, and SIRB for safe operations.
Welfare and health of the crew in connection with the Maritime Labour Convention (MLC) or equivalents.
The crew is the most important asset of a Vessel.

The content shared in this blog post was initially presented at the IUMI 2023 conference in Edinburgh by Jorge Diaz

The bill of lading contract in cargo claims

29/08/202415/09/2023 by encarna

The Bill of Lading (B/L or BoL) serves as prima-facie evidence of the terms of the contract of carriage between the shipper and the carrier.

The value of the bill of lading

Imagine how crucial this document is when it comes to handling claims?

Once the cargo is loaded on board the vessel (“shipped on board”), it’s time to issue the B/L, which serves 3 purposes.

Receipt for the goods: it contains a description of the cargo received, including the marks needed to identify the goods, as well as the quantity of packages, their volume, and weight.
The B/L also proves that the cargo has been received “clean,” in other words, in apparent good order and condition.
Well, unless it’s “dirty”, and remarks to this effect have been made on the B/L itself.
Evidence of the transport contract: the terms of carriage agreed upon before the goods are sent to the ship are printed on the front and back of the B/L.
Document of title: the B/L authorized holder is entitled to receive delivery from the carrier. However, it doesn’t necessarily operate as a transfer of the property.

Key participants in the bill of lading

As with all commercial documents and operations, there are essential parties whose roles are critical to facilitating the most efficient shipping process possible:

Role	Description
Shipper	The shipper is the originator of the goods being shipped. This entity is responsible for the initiation of the shipping transaction and is often the principal in the contract of carriage with the carrier.
Consignee	The consignee is the end recipient of the goods being transported. This party is usually identified in the B/L as the entity to whom the goods are destined and to whom the title of the goods may ultimately be transferred upon delivery.
Notify Party	The notify party is the individual or entity designated in the B/L to be contacted once the goods reach the specified destination and are ready for reception. This contact is crucial for the coordination of the cargo release and delivery processes.
Carrier	The carrier role is performed by the shipping company or shipowner responsible for the transportation of the goods. The carrier, whether it is a shipping line, a ship’s agent, or the shipowner themselves, is also tasked with issuing the Bill of Lading document. It is important to note that the shipping company’s role encompasses the legal and logistical responsibilities for the goods while in transit. The Hamburg Rules in Article 14 stipulate the carrier’s obligation to issue a B/L to the shipper, underlining its foundational role in the maritime legal landscape[1].

Furthermore, it is incumbent upon the shipping companies to issue the B/L document—whether done by shipowners, consignees, or shipping lines—or by the captain of the vessel on which the goods will be carried.

It is imperative to remember that between three and five original copies of the B/L should be issued to account for various legal and logistical needs throughout the shipping process.

Can a bill of lading be transferred, and if so, how does this affect cargo claims?

Yes, a B/L can be transferred. There are generally three types of B/L with respect to the ability to transfer:

Order Bill of Lading: This can be transferred to another party through endorsement and delivery of the bill. It is negotiable and commonly used in international trade where the shipment is consigned to the order of a shipper’s bank, the buyer, or another party.

Straight (or non-negotiable) Bill of Lading: This is consigned to a specific consignee and cannot be transferred to another party in the sense of transferring title to the goods. The consignee may still be able to direct the carrier to deliver the goods to another party, but the rights under the B/L remain with the original consignee.

Bearer Bill of Lading: This can be transferred by simple possession, as it consigns the goods to whoever holds the bill. This type is very rare due to the high risk of loss or theft.

When a B/L is transferred, the transferee (new holder) obtains the rights to claim the goods from the carrier and, in the case of an order B/L, can also pursue any cargo claims that may arise due to loss, damage, or other shipping issues.

The transfer of rights is significant in trade, as it allows the goods to be sold in transit and the seller to retain control until payment is secured. However, the transfer must be done according to the type of bill of lading and the corresponding laws and practices governing such transfers.

Requirement data in a Bill of Lading

The information within a B/L encompasses much more than the ports of origin and destination. Functioning as a deed of the goods in transit, the data captured within a B/L must be precise and comprehensive. In the words of John F Wilson, “Most companies engaged in the liner trade will produce their own proprietary brand of bill, while smaller operators can adopt the standard forms drafted by the international shipping organization”[2]. This statement underlines the customizable nature of the B/L, adapting to the needs of a diverse array of shipping companies while maintaining a standard that ensures consistency across the industry. A Bill of Lading should meticulously detail the following essential information:

Category	Details
Description of Goods	The type of cargo being transported is critical. For Full Container Load (FCL) shipments, the number of containers; for Less than Container Load (LCL) shipments, the number of packages should be specified. Additionally, a thorough description of each package should be included, detailing the type of goods, type of packaging, quantity per package, and the number of units.
Shipper’s Details	Full name and address of the shipper, including the name, address, telephone number, and email of the party responsible for sending the goods.
Consignee’s Information	Full name and address of the consignee: The details of the end recipient who will receive the goods must be recorded.
Notify Party’s Details	The full name and address of the party to be notified of the shipment’s status should be explicitly stated to ensure proper communication upon cargo arrival.
Vessel Particulars	The name of the ship and the voyage number on which the goods are being transported should be provided for identification and tracking purposes.
Initial Receipt Location	The place where the shipping company first takes possession of the cargo needs to be identified to trace the movement of the goods right from the start.
Port of Loading	The port at which the goods are loaded onto the vessel is a fundamental data point, as it represents the initial stage of the sea transit.
Port of Discharge	The port where the goods will be offloaded from the vessel must be clearly indicated to ensure all parties are aware of the final maritime destination of the cargo.
Place of Delivery	Finally, the exact location where the goods are to be delivered to the consignee should be noted, completing the journey’s itinerary from shipper to recipient.
Freight amount	Cost of maritime transportation, surcharges (additional costs associated with transport), the currency used for these figures, and whether the freight is prepaid or payable at the destination (freight collect)

Each element of data provided in the B/L forms the skeleton of the shipping transaction, providing a transparent and traceable map of the journey. This meticulous documentation is not merely an operational formality but a legal necessity, ensuring that the rights and responsibilities of all parties are clearly defined and protected throughout the entire transportation process.

As the B/L is a legal record of the transaction, inaccuracies in completing it may have serious repercussions.

The precision of the Bill of Lading is imperative and constitutes an indispensable element in preserving the transactional integrity between the shipper and the carrier. It operates not merely as a record but as a fundamental instrument ensuring the legality and validity of the contractual agreement. When discrepancies infiltrate this document, they may precipitate a cascade of adverse legal and financial outcomes.

Additional Expenses

The first wave to hit might be additional expenses. A B/L marred by inaccuracies can generate a domino effect of cost overruns. For instance, if the weight of the cargo is underreported, you could be looking at hefty fines and re-weighing charges at the port of discharge. Similarly, incorrect descriptions or codes related to the cargo can lead to delays and the accrual of demurrage charges, where the cargo sits idle, accruing fees like a taxi stuck in traffic with the meter running.

Service Interruptions

Furthermore, errors can cause service interruptions. A B/L serves as a navigational chart for the cargo, guiding it through the myriad checkpoints and ports. An error might misdirect your cargo, leading to delays that ripple outward, affecting not just the immediate shipment but the schedules of connecting hauls, ultimately disrupting supply chains. In a world where time is money, these delays translate to lost revenue, strained customer relationships, and dented reputations.

Insurance Voidance

The third squall borne from B/L inaccuracy is insurance voidance. Insurance coverage for cargo is hinged on the declarations made in the B/L. Misrepresentation or omissions can lead to a void in coverage, leaving shippers exposed and vulnerable. In the unfortunate event of cargo damage or loss, an inaccurate B/L could thus render insurance claims null and void, thrusting the financial burden of replacement or reimbursement squarely onto the shipper.

Potential Criminal Charges

Finally, and most gravely, is the specter of criminal charges. The B/L is a legal document, and deliberate inaccuracies can be construed as fraud. This is particularly acute in cases where the contents of a container are falsely declared – a serious violation that can attract legal sanctions, penalties, and in severe instances, custodial sentences. The implication of fraud not only imperils the immediate parties involved but can also tarnish the broader reputation of entities associated with the shipment.

A meticulously detailed B/L is a shipper’s safeguard against these formidable pitfalls. It’s the thread that stitches the safety net under the high-wire act of shipping logistics. It is vital that every character and digit entered on a B/L is triple-checked for its veracity. In essence, accuracy in a B/L does not just prevent fiscal and legal jeopardy; it fosters a climate of trust and efficiency that is foundational to the shipping industry.

Legal Framework for B/L

The B/L does not exist in a vacuum; it is enmeshed within a complex legal framework that spans national and international law.

International Conventions

International conventions have defined the basic obligations of the carrier towards the cargo and prescribed the maximum immunities and limitation of liability he can claim.

Several international conventions, such as the Hague-Visby Rules, the Hamburg Rules, and the Rotterdam Rules, provide a legal backdrop for the B/L. These conventions attempt to balance the rights and responsibilities of all parties involved in the shipping process, offering a medley of regulations that underpin the B/L’s legal standing.

National Laws

While international conventions set the stage, national laws play a critical role in the enforcement and interpretation of B/L terms. The diversity of legal systems adds layers of complexity to the B/L, making it imperative for parties to understand the specific legal context in which their B/L will operate.

In Spain, the maritime transport by Bill of Lading (B/L) in Spain is regulated by the Law of December 22, 1949, on Maritime Cargo Transport by Bill of Lading, and articles 246 to 266 of the Maritime Navigation Law 14/2014, of July 24. This legislation establishes the legal framework for the issuance and management of B/Ls, which serve as a receipt for shipped goods, a document of title, and a potential contractual agreement between shippers and carriers.

In England, the Carriage of Goods by Sea Act 1992 is the key legislation governing B/Ls. This Act implemented the Hague-Visby Rules and outlines the rights and responsibilities of all parties involved in the shipping contract. It is noteworthy that, despite Brexit, English law continues to have a substantial influence on international maritime law, and the use of B/Ls in England remains consistent with global practices to ensure smooth international trade operations.

How does a bill of lading's terms regarding multimodal transport affect the processing and resolution of cargo claims?

The introduction of containerization and the use of multimodal transportation have indeed changed the shipping industry, enhancing the efficiency of global trade. In terms of cargo claims, the use of a Combined Transport Bill of Lading (CTBL) or Multimodal Transport Document (MTD) reflects these changes by providing a unified contract that covers the entire transportation process, even though it may involve several different carriers operating across sea, land, and air.

When addressing cargo claims, the CTBL or MTD brings forth the complexity of dealing with multiple liability regimes.

Since the liability clause within these documents dictates that responsibility for loss or damage is determined by the local laws of the region where the incident occurs, and by the specific mode of transport being used at that time, claimants must navigate through varied legal frameworks.

This could mean, for instance, that if cargo is damaged during the rail leg of its journey following a sea passage, the claim would be subject to the rail transport regulations of the country in which the damage took place.

Understanding the nuances of how liability is assigned in multimodal transport is crucial for both shippers and consignees. It impacts the level of recourse they have in the event of loss or damage. Therefore, securing comprehensive insurance coverage that takes into account the different carriers and jurisdictions involved in the transport process is vital. Insurance policies should be tailored to cover the specific risks associated with each segment of the multimodal journey to ensure adequate protection against potential cargo claims.

The Electronic Bill of Lading (eB/L)

Definitively, the last thing to be mentioned in the posts is the eB/L. In an age of digital transactions and blockchain technology, the traditional paper B/L faces challenges of adaptation.

The shift from paper to eB/Ls has the potential to transform the cargo claims process, promising enhanced traceability, reduced documentation errors, and faster claim resolution. Utilizing blockchain technology, eB/Ls offer an immutable record of the cargo’s journey, increasing transparency and making it easier to determine liability in the event of a dispute. This can lead to quicker settlements and improved efficiency for all parties involved.

However, challenges remain in the form of legal recognition and global standardization. The legal frameworks across different jurisdictions are yet to fully embrace eB/Ls as being on par with their paper counterparts. Moreover, the maritime industry’s hesitance to move away from traditional methods and concerns about cybersecurity also pose significant hurdles to the widespread adoption of eB/Ls.

This topic warrants further exploration and will be the subject of subsequent discussions in our forthcoming posts.

Conclusions

Remember, the ultimate role of a bill of lading is to serve as a definitive record of the goods shipped, ensuring accountability, facilitating the resolution of disputes, and minimizing financial damage in the face of a claim.

So, when precision and proficiency in cargo claims are paramount, play it safe and rely on our seasoned experts at Marlin Blue.

Discover more about our comprehensive claims handling services and how we can safeguard your interests.

Bibliographic References

K S Trujillo, ‘International Marine Cargo Insurance: Building Generic and Thematic Competences in Commercial Translation’ (2019) 32 The Journal of Specialised Translation 268, 268-279 https://jostrans.org/issue32/art_trujillo.pdf accessed 7 November 2023.
John Wilson, Carriage of Goods by Sea (7th edn, Pearson Longman 2010)
Alan E Branch, Elements of Shipping (8th edn, Routledge 2009) 117.

The Ins & Outs of Marine Insurance Cargo Claims

28/04/202522/08/2023 by encarna

The Ins & Outs of Marine Iinsurance Cargo Claims

As the maritime industry keeps evolving, the importance of marine insurance coverage rises in parallel. And one of the critical aspects of marine insurance is freight claims. When cargo suffers damage or loss, timely and efficient handling plays a key role in safeguarding your relationships with clients.

But cargo claims aren’t all black and white. Their intricacies can pose significant challenges for insurance providers.

That’s why we’d like to delve into some common obstacles in cargo claims handling and how professional claims handlers help you overcome them. Moreover, at the end of this blog post, you’ll find a curated list of valuable resources to enhance your claims handling processes.

Let’s start by…

Understanding cargo claims

Cargo claims are part and parcel of marine transportation. They may stem from a myriad of incidents that can occur during transit.

Damage caused by mishandling.
Improper packaging.
Adverse weather conditions.
Accidents.
Theft.
Total loss of cargo.

As an insurance company, you strive to uphold your commitment to your clients and be there for them when something goes wrong.

That’s why it’s crucial to have a firm grasp on the types of cargo claims and the unique challenges they pose. When faced with a claim, your initial task is to determine its nature and classify it. This lays the foundation for an effective claims handling process.

Think about it in these terms.

Damage during transit may involve assessing to what extent the cargo is damaged, determining liability, and establishing the cause behind the damage.
Total loss claims require an investigation to assess the cargo value and what led to the loss.
Delays in cargo delivery can result in financial losses for the consignee. This means you will have to address claims promptly while accounting for what caused the delay.

Challenges in cargo claims handling

Dealing with marine cargo claims is no easy task. Here are some of the hurdles you may encounter:

Complex documentation

Cargo claims involve stacks of paperwork, including BLs, cargo manifests and survey reports. The sheer volume of documentation makes it challenging to assess the claim’s validity.

And let’s not forget that providing incomplete or inaccurate documents can cause delays and disputes during the claims process.

Different international regulations

Cargo claims may span many jurisdictions, each with its unique set of maritime laws and regulations.

Lack of understanding of the applicable legal framework may lead to non-compliance or oversight of essential legal requirements. With all that entails, including invalidated claims or financial penalties.

Time sensitivity

Prompt action is crucial in cargo claims. Not only to prevent further damage, but also to protect the assured from financial losses.

Now, internal bureaucratic procedures and overwhelmed claims departments can slow down the claims handling process.

Fraudulent Claims

Identifying and dealing with insurance fraud is an ongoing challenge. Distinguishing legitimate claims from suspicious ones requires experience to protect the interests of all parties involved.

Overcoming hurdles hand in hand with professional claims handlers

These challenges are overwhelming when you’re on your own. Fortunately, marine claims handlers have all it takes to help you navigate cargo claims.

Expertise in documentation management

Seasoned marine claims handlers will identify any discrepancies or inconsistencies in your paperwork and streamline the claims process.

Knowledge of international regulations

Staying up to date with the latest international maritime regulations is a must for marine claims handling agencies. This enables them to deal with cargo claims across different jurisdictions.

Access to qualified professionals

To ensure a fair and accurate settlement, you must delve deep into the incident. You’ll need to unravel its complexities until you can determine what led to the damage or loss of the cargo.

This takes a collaborative approach. And a professional marine claims handler puts at your disposal a global network of experts (e.g., surveyors and cargo inspectors).

Timely response and communication

Marine claims handlers respond promptly to reported incidents, start investigations, and maintain effective communication with all stakeholders.

They are well aware of how crucial it is to react swiftly to reduce the insured’s financial burdens and achieve a timely settlement.

Fraud detection and prevention

Professional handlers can recognise red flags that may point to fraudulent claims. Their vigilance protects you while ensuring genuine claims are handled fairly.

Technological skill

Digital tools and data analytics allow claims handlers to assess claims more accurately, identify patterns, and make well-informed decisions.

By integrating technology into their workflow, claims handlers also reduce processing times.

Resources for dealing with cargo claims

Here’s a selection of 7 essential resources to improve your claims handling processes.

International Group of P&I Clubs

The International Group of P&I Clubs is an association of 13 major shipowners’ protection and indemnity (P&I) clubs. Their website offers information on different aspects of marine insurance, including cargo claims, legal resources, and industry updates.

International Maritime Organization (IMO)

The IMO is a specialized agency of the United Nations responsible for regulating international shipping. Their website provides access to essential conventions, codes, and guidelines impacting marine insurance and cargo claims.

International Chamber of Commerce (ICC) – Incoterms®

The ICC’s Incoterms rules set the responsibilities of buyers and sellers in international trade transactions. Understanding Incoterms helps you determine where the risk and responsibility for cargo transfer from the seller to the buyer.

The Nordic Association of Marine Insurers (Cefor)

Cefor is an association of marine insurers from the Nordic countries. In their website, you’ll find publications, statistics, and insights related to marine insurance and claims handling.

American Institute of Marine Underwriters (AIMU)

AIMU provides resources and education for marine insurance professionals. Their website includes industry-specific updates to stay informed about current trends and best practices.

Cargo Incident Notification System (CINS)

CINS is an initiative of several major container shipping lines to share data on cargo incidents. It provides valuable statistics and information on common cargo claim issues.

Transportation Intermediaries Association (TIA)

TIA represents third-party logistics (3PL) companies and provides resources and best practices for managing cargo claims and logistics risks.

These resources will support you in handling your cargo claims. But you can take your commitment to client satisfaction and claims resolution to the next level by hiring a professional marine claims handler.

Find out more about Marlin Blue and what we can do for you here.

Top 10 risks leading high-cost claims for container terminals

14/04/202527/04/2023 by encarna

Wherever cargo is on the move, incidents may occur. Container ports are no exception to this rule. Find out the top 10 risks giving rise to the highest cost insurance claims for container terminals.

Quay cranes: it’s one of the key tools in container operations. Since it’s positioned on the waterfront, it’s hugely vulnerable. Boom collisions, gantry collisions or stack collisions are frequent incidents.

Rain & flood: terminals are situated on low-lying land, so they’re exposed to flood risk. Natural disasters can’t be prevented, but much can be done to mitigate the damage they may cause. It’s crucial to position valuable equipment on higher ground, and to secure operational assets.

Straddle carriers: blind spots during their operation may lead to collisions against containers stacks, and other straddles or vehicles. Not only that, but overturns result in bodily injuries. These risks can be mitigated by using automated tools to monitor their performance.

Lift trucks: forklifts, reach stackers, top picks, side picks… fall into this category. Common risks are collisions, tipping forwards and dropping boxes. However, the one risk that stands out is pedestrian injuries. While in operation, keep people away from them.

Trucks & vehicles: collisions and overturns of smaller vehicles happen often. To ensure the safe operation of internal transfer vehicles, third party trucks, and the like, implement traffic management procedures.

Ship in port: vessels may collide with the berth, and even the crane. Smooth communication among all parties (port, terminal, pilot, tugboat…) may prevent these incidents.

Yard cranes: the main risks encountered are collisions, hitting equipment and people, and knocking boxes from stacks. Stack collapses often lead to crane, container and cargo damage. This can be avoided by implementing automated stacking technologies.

Fire: lift trucks are to blame for most fire-related damages. Proper maintenance is key to minimising this risk. On a different note, cargo-related fires are also a common occurrence. Analyse your storage and operating areas to reduce the risks of fire, and implement a fire-fighting procedure to minimise the damage.

Theft: the marine industry loses billions to cargo theft each year. In this context, new technology’s a blessing in disguise, as cyber-crime is on the rise. Physical and system security, as well as thorough checks on anyone entering container ports, are of utmost importance.

Bad handling: cargo may get damaged at the terminal. But the damage may have also occurred before the cargo reaches the container port. Terminals must keep records to prove the condition of the goods at entry and exit.

Yes, all of the above can go wrong in container port operations . Make sure to take preventive action… and, if worse comes to worse, contact us for assistance with your claims

Understanding the role of the receiver in cargo claims

29/04/202510/02/2023 by encarna

Good things come to those who wait. Do they, now?

Sometimes, that long-awaited consignment is delivered to you and, to your dismay, you realise that your freight has been damaged. You may be tempted to play the blame game and point a finger at the carrier or shipper.

This behaviour won’t get you far. Instead, keep a cool head and act immediately to recover some of the lost value.

The first question you may want to ask yourself is:

What’s my main role as a receiver?

As a receiver or consignee, it’s your job to receive and collect the goods from the carrier.

And, in the process, you must ensure that they are received as agreed. In other words, you must inspect the products (i.e., nature, quantity, quality and packaging) upon arrival at the destination port, so any defect or discrepancy can be traced back to the carrier.

This procedure avoids liability disputes that may arise if a damaged consignment were examined at the buyer’s own premises.

What are the receiver’s responsibilities?

You’re responsible for taking all possible measures to ensure that any loss or damage to cargo can be resolved by means of a freight claim.

Let’s break the process down into 8 actionable steps:

1. Accept the damaged goods

Granted, you may be tempted to send the driver away. However, refusing to accept a damaged or short-shipped delivery may backfire on you.

For a start, keeping the cargo may help you determine whether the shipper is liable (e.g., poor or inadequate packaging), or if the harm occurred while the goods were in the custody of the carrier.

Plus, if you don’t accept the damaged freight, it may be sent back to the carrier’s warehouse for storage while the claim is processed. As a result, you may incur storage and processing fees.
And let’s not forget that most insurance policies require that you accept the freight and may commission a surveyor to verify the damage in person.

2. Note any shortages or damages on the Bill of Lading (BOL) or proof of delivery (POD).

An unannotated delivery receipt serves as proof of undamaged delivery. So, make sure to note any issues resulting from the carriage and delivery of your cargo at the time of receipt.

And indicate the nature and severity of the damage. The more details, the better.

If the damage will render the product unusable, note it.
If there are any exceptions (e.g., cartons that are dented), note it.
If there are concerns about concealed damage, note it.

Writing “Subject to Inspection” won’t help your case. Rather, note “Damaged” and inspect your cargo thoroughly.

As the saying goes, a picture is worth a thousand words. So, take photographs of the damaged goods and keep them as visual supporting evidence.

Lastly, if the cargo is sensitive or high value, you may want to hire a third-party surveyor. A well-documented and clearly written survey report may tip the balance in your favour.

3. Reach out to your carrier or freight forwarder.

Let your logistics operator know that your freight was delivered in damaged condition. And do it sooner rather than later.

Even if you first notice the damage or shortage after the delivery, and you are aware that you have two weeks to file a damaged freight claim. Alert your carrier as soon as you notice that your delivery isn’t intact.

4. Keep the cargo and its packaging.

As inconvenient as it may be to store damaged freight, you should hold it while the claim is being processed.

Carriers are entitled to mitigate loss and, if you don’t give them the opportunity to salvage the damaged cargo, they may deny your claim or not pay it in full.

Having said that, if you’re dealing with cargo that spoils (e.g., food) or hazardous materials, outside disposal laws may supersede a carrier’s salvage rights.

5. Prevent further damage to freight.

Find a safe place to store the cargo and leave it there. Avoid moving it to minimise the odds of additional damage.

Also, if part of the cargo is wet, damaged or rotten, segregate it from cargo that is salvageable.

6. Pay your freight charges.

When you file your claim, you’ll need to attach a copy of your paid freight bill. Regardless of who is at fault, and even if your shipment is damaged, wrong or lost.

By paying your freight bill, you show your willingness to come to an agreement.

7. File your claim ASAP.

Don’t procrastinate. If you file a claim after the initial claim period, that claim will be voided.
Include all relevant evidence, such as:

Bill of Lading indicating damages.
Proof of delivery.
Paid freight invoice.
Sales invoice showing the price paid for the damaged goods.
Freight claim form or a letter with a detailed description of the loss and the claim amount.
Pictures of the damage.

Once your claim has been filed, keep copies of everything. Having evidence readily available strengthens your claim.

8. If your claim is denied, explore other avenues.

There are many options a receiver has after a freight claim is declined:

Submit additional documents. Prove that your claim is legitimate and fight the denial.

Engage the shipper. They may have additional documentation or leverage with the carrier.

Work with the carrier’s sales department. If the shipper or you are good customers, they may turn a blind eye.

File a lawsuit. Cargo carriers will often settle prior to court.

Freight claims are your means of recovering some of the lost value when goods are damaged or lost while in transit. If both shippers and receivers understand who’s responsible for the cargo at each time and work together, the claims process will be smooth and lead to a successful outcome.

And if you find yourself struggling to come to a fair settlement, Marlin Blue specialises in alternative dispute resolution. Send us your claim and we’ll figure it out for you.

What causes cargo damage and how to prevent it

14/04/202509/11/2022 by encarna

Cargo damage may happen at any stage during transit. Regardless of the mode of transport you use. Even if you plan every shipment with the utmost care, you just can’t foresee everything. Besides, there are conditions that are out of your control, such as accidents or natural disasters.

When damage occurs to cargo, you may suffer product and financial losses. Not only that but this sort of occurrence may take its toll on your business relationships with your customers.
You can take action to prevent cargo damage from happening if you identify potential risks and prepare your consignment accordingly.

But, firstly, you have to understand…

What are the 5 types of cargo damage?

Cargo-related claims may come in many shapes and forms. However, there are only five types that are classified as cargo damage.

Physical damage

During transit, cargo experiences intense longitudinal and transverse forces. As a consequence, it may roll, drop or slide around.

This may cause physical damage, such as dents, cracks or major scratches, even if the goods are properly packed.

Wet damage

One of the greatest enemies of cargo is damp. Moisture arising from condensation, container seawater ingress and the like, may result in significant damages to your consignment.

Contamination damage

This sort of damage occurs when a foreign body is found in your cargo, which renders it impure. This means your goods will be considered unsafe for human consumption or other industrial or operational usages.

Contamination damage affects solids, liquids and even gases. And the contaminant may be water, another type of cargo, a chemical additive or solid matter.

Reefer related damage

Perishable commodities (e.g., fruits, vegetables and meats) are sensitive to temperature changes. That’s why they are transported in controlled atmosphere refrigerated containers.

However, despite the controlled environment, cargo may still suffer damage during transit. Some common occurrences are bruising, thawing, freeze damage, discoloration and over-ripening.

Infestation damage

Infestation happens when a large number of insects or animals (mainly rodents) are found in a cargo.

It mostly affects agricultural products and it leads to contamination of cargo, rendering the goods unsuitable for human use.

What are the possible causes of cargo damage?

Physical damage

At first sight, the ocean may look like a flat surface. Well, far from it. Wind, currents, waves… All these variables how vessels move across the water.

There are six types of ship movements:

Heave: vertical motion
Sway: transverse motion
Surge: longitudinal motion
Roll: longitudinal rotation
Pitch: transverse rotation
Yaw: vertical rotation

So, not just forward and reverse, but up and down, side to side, and even heaving into the air.

Now, these movements cause different strains and stresses on the cargo inside the container. Even more so if the cargo isn’t secured properly, which would make it sway during transport.

With this in mind, it will come as no surprise that the main cause for physical damage is bad stowage, such as:

Incorrect securing of cargo (e.g., not using enough dunnage or lashing materials).
Uneven weight distribution (e.g., placing cargo in just one area, rather than spreading it evenly).

Improper loading of cargo (e.g., piling heavy crates on top of lighter pallets).

Wet damage

Cargo may be damaged due to condensation. Condensation occurs as a consequence of temperature fluctuations during the voyage. However, it may also happen if you use the wrong sort of container (i.e., a normal container rather than a ventilated one).

Overall, the most common cause for moisture damage is hatch covers’ leakage, followed by heavy weather.

These two incidents tend to go hand in hand. Badly maintained hatch covers fail to meet their intended use: prevent water from entering the cargo hold when the boat is sailing through bad weather.

Contamination damage

Insufficient cleaning of the boat’s tanks and improper cargo handling during loading or discharge are the main causes for contamination claims.

And so is odour transfer. Delicate cargoes (e.g., foodstuffs, clothing, tea, cotton, to name but a few) are very sensitive to contamination due to odour.

Reefer related damage

Given the nature of reefer cargo, it goes without saying that an equipment malfunction or power failure is bound to result in damages.

Other factors to watch out for are:

Human error in setting of temperature
Improper stowage, leading to poor air circulation
Improper dunnage, which allows cargo to sway, causing crushing
Lack of proper pre-cooling

Infestation damage

Infestation happens when insects or rodents move into one container from previous containers or cargo.

Another scenario leading to this sort of damage is pests being transferred from an infested warehouse where the cargo was kept.

How can we avoid cargo damages?

Here are some tips:

Use the correct type of container for the kind of cargo to be loaded.
Ensure that the right lashings and dunnage materials are used to prevent cargo from moving.
Distribute cargo weight as evenly as possible.
Make sure incompatible products aren’t mixed in the container (e.g., clothing and chemicals).
Use anti-humidity materials or ventilated containers for water-sensitive cargo.
Ensure the doors of the container seal properly.
Clean all tanks, pumps and lines thoroughly to avoid contamination.
Make sure your reefer container has a valid Pre-Trip Inspection (PTI) certificate, attesting to the correct functioning of the cooling unit, temperature control, and recording devices.
Ensure that the warehouse where your cargo is stored is free of pests and rodents.

Now, you may be thinking it’s down to your shipper or forwarder to implement these precautionary measures. So, if your cargo does get damaged during transit, the whole blame game will start: Who’s at fault? And how can you prove it?

Ascertaining liability is time-consuming and draining… unless a professional claims handler does it on your behalf.

Let us handle your cargo damage claims within just a few clicks.

What you need know about freight claims

20/09/202323/08/2022 by encarna

As a cargo insurer, you give your clients peace of mind. Sinking, collision, stranding, fire, thieves, jettison… are all perils of the sea that may end up in loss or damage to cargo. By taking out insurance, the policyholder is protected from any resulting financial loss.

However, clients are unlikely to remember your skill, care and diligence in helping them purchase or renew cargo insurance. It’s a given that you’ll be on your best behaviour when you’re trying to sell them an insurance policy.

Do you know what sticks, though? The quality of your claims service. And this is never truer than when a policyholder suffers a complicated loss event, which may lead to lengthy claims handling and legal disputes.

Your freight claims procedure has an impact on how you’re perceived in the market and it may set you apart from the competition… for good or bad.

Freight claims handling isn’t a walk in the park. Based on our experience, here’s what customers expect from you when they report a cargo claim:

Resourcefulness & troubleshooting skills

Efficient claims handling is all about crafting the right strategy to allow your customers to get back to business ASAP. If the future of a commercial relationship seems compromised, if a vessel is being held back due to unreasonable demands, if administrative and legal issues become a stumbling block… Claims handlers need to look beyond formal rules and dig into practical and commercial realities.

You must think out of the box to provide solutions allowing the assured to resume what they are there for: shipping.

Unbiased management

Make sure to seek objective advice from independent surveyors and loss adjusters in order to quantify larger losses. Together with legal advisors, these professionals will ensure that claims investigation and assessment overcome any implicit biases.

Centralised handling

The assured should liaise with one single decision maker when an emergency arises and during the ensuing claims settlement process. Although H&M policies tend to be insured by a group of insurers, one of them should be vested with the power to act on their behalf in claims-related issues. Having a claims leader to relate to will make the assured feel that they are in good hands, rather than being passed around like a hot potato.

On a different note, having a single organisation involved in relation to both H&M and P&I results in all parties being aligned to find the most rational, cost-effective and less risky course of action. Information is shared and decisions are made faster, leaving the allocation of costs and any residual risks for a later stage.

In-depth knowledge

Clients will expect you to navigate two core areas with ease:

Technical maritime expertise: you need to understand the situation the vessel may be facing, as well as the salvage, removal and repair processes.
Maritime law, including charterparty law and international conventions: this allows you to break down the consequences of the different options under consideration.

Global capacity

Knowing where a maritime casualty will happen would make its handling much easier. However, in the absence of a crystal ball 😉, it’s crucial that you have access to a global network of competent local service providers.

Depending on the type of accident, you may have to hire an experienced lawyer to deal with local authorities. Perhaps you’ll need to resort to surveyors to pursue a claim against a third party, or to technical expertise for a vessel repair service. Having a global support network is key to overcoming any obstacles that may arise as the claim unfolds.

Round-the-clock availability

New York is the city that never sleeps… and the shipping industry follows suit. Casualties may happen at any time of the day or night in different time zones.

That’s why a 24/7 emergency phone service for claims handling is a must. But not any operator can be on the other end of the line. Customers expect to receive immediate, effective answers, so your call centre must be manned by experienced claims people who won’t hesitate to take any required action.

Letters of undertaking (LOU)

The assured’s major concern in the face of a casualty is the resulting delay to the onward carriage of the cargo. In collisions and other incidents with a liability potential, the claims handler may have to put up LOU or bank guarantees to minimise interruption to the vessel’s voyage.

Accurate documentation processing

It may seem that there’s no secret to issuing claims-related documentation. At the end of the day, it’s all formulas and legalese. Well, let’s not play down its importance. Submitting the correct documents within the stipulated timeframe is key to ensuring that claims are compensated sooner than later.

As an insurer, you’re bound to be well-acquainted with every step the claims process entails. However, it may pay off to take this heavy burden off your plate.

Expert claims professionals can help you by:

Streamlining your claims handling processes
Focusing on risk mitigation, as well as claims response
Implementing preventive measures
Lessening the amount of the claim
Ensuring the claimant has adhered to the insurance clauses
Recovering losses from liable parties

Talk about a win-win situation: you’ll be saving precious time while someone else looks after your interest. But, most importantly, your freight claims handling will help you earn your customers’ loyalty and set you apart from other insurers.

Would you like to see how easy it is to file a claim with our expert team? Put us to the test.

Cargo claims on the rise

20/09/202323/06/2022 by encarna

In the insurance industry, there has been a notable increase in #cargoclaims in recent years. Why?

Loss ratios and expense ratios are rising.
More frequency and severity of cargo claims.
An increase in claims being put forward during COVID-19 by freight forwarders, importers and exporters. This is mostly due to a lack of operational income. Every penny counts!
Mobile apps, virtual appraisals, and artificial intelligence-driven straight-through processing are among the innovations reinventing the claims value chain.

To claim under a Marine Cargo Insurance Policy, contact us.

Freight damage claims: best practices to improve your claims process

28/04/202527/04/2022 by encarna

Receiving damaged freight is another logistics process. A very inconvenient one at that. Having a set procedure for your claims handling will ease your pain in the face of unexpected freight damage.
This article aims to provide you with some valuable insights into the claims process. Let’s start by defining…

What’s a freight claim?

A shipping claim, cargo claim, logistics claim… They are all one and the same. A freight claim is a legal demand by a shipper or consignee against a carrier having broken the terms of their contract. As a consequence, the claimant seeks financial reimbursement for a loss or damage to their cargo.
However, you can’t assume that the carrier is always liable for damage to your cargo.

What are your responsibilities as a shipper?

There are plenty of variables that can have an impact on your consignment during transportation: weather, warehousing conditions, special handling requirements, to name but a few.

Your carrier won’t be liable if the damage results from your failure to:

Pack the cargo properly
Label the packaging correctly
Provide accurate descriptions on the shipping documents

It’s your responsibility to establish that the goods were given to the carrier in good condition and delivered damaged. Only if you’re able to prove that you kept your end of the deal, will the carrier be held liable for your claim.

Which types of freight damage claims are there?

Visible damage

The damage is readily apparent upon delivery.

Concealed damage

This is damage discovered after the delivery driver leaves, and the cargo is un-palletised or cartons are opened. Although this article focuses on freight damage claims, you may also experience:

Loss

Your cargo is missing in action. It was picked up but got lost in transit.

Shortage

You only receive part of the shipment you were expecting.

Now, let’s get to the gist of freight damage claims.

What should you do when damage is found at the time of delivery?

Check each unit for signs of damage.
Open any packages showing visible signs of damage while the driver is present.
Record an exact description of the damages on the Bill of Lading (B/L) or Proof of Delivery (POD).
Take photographs.
Have the driver sign your copy of the delivery receipt.
Notify the freight carrier and report damage.
Store the damaged goods and packaging, as the carrier is entitled to inspect them.

What should you do when damage is found at the time of delivery?

Concealed damage freight claims are damages that aren’t noticeable at delivery (e.g., a product shifting in the packaging).

First and foremost, make sure not to give the driver a “clean receipt”, which would imply no damages occurred while the goods were under the carrier’s responsibility. Instead, mark “pending further review” on the POD.

If you see anything that may point to mishandling (e.g., holes, stains, torn packaging), note it on the delivery receipt. That way, if concealed damages are found subsequently, you’ll be able to prove that something was wrong with the delivery from the start.

And, needless to say, respect the claim time limits. If you take any longer than 5 days, your claim will be void.

How to file a freight damage claim?

If you did your homework upon receipt or inspection of the damaged goods, lodging a claim against the carrier will be a piece of cake.

1. Submit a written claim to the carrier

Provide information allowing to identify the cargo.
Assert liability for alleged loss.
Demand payment of a certain amount of money.

2.Provide all supporting documents

B/L or POD.
Photos of the actual damage.
Original invoice showing the costs paid for the cargo.
A repair estimate (if applicable)

Now, let’s say you follow all these guidelines. You count on receiving full reimbursement. Until the bubble bursts. You get a freight claim declination letter and wonder…

What’s the reason leading to my freight damage claim being denied?

It could be due to:

• Incomplete or inadequate documentation

For example, an illegible invoice. This sort of issue can be easily solved by submitting the information requested by the carrier.

• Clear POD

If there’s no notation of damage on the proof of delivery, it is understood that the freight was received in good condition. The carrier will be entitled to decline the claim.

• Act or omission of the shipper

Imagine your cargo is hazardous material, and it wasn’t packaged and labelled as such. Any damage arising during transit would be your fault, so you wouldn’t be entitled to receive any reimbursement.

• Act of God

Let’s face it: volcanic eruptions, earthquakes and tornadoes are beyond all human control, so the carrier could not be held liable for any damage to your cargo under those circumstances.

• Freight bill unpaid

Your carrier won’t accept your claim if your freight invoice is outstanding.

• Mitigation

It’s your responsibility to mitigate the claim insofar as possible, whether it be by repairing the item, selling it at a discount or returning it to the supplier. Failure to do so may lead to your freight damage claim being denied.

After reading this article, you may be thinking: “Wow, a freight damage claims process is a lot to handle!”
Save yourself the trouble by relying on Marlin Blue’s expert team to deal with your claim. Check out our success stories to find out how working with us will give you the upper hand in the face of freight damage claims.