Partner Article

Midlands businesses warned of shipping insurance risks

Importers and exporters across the Midlands are being advised to urgently review their freight insurance following another major shipping catastrophe.

Anton Gunter, director of Telford-based Global Freight Services, said businesses could face huge costs without the appropriate insurances in place to protect their goods against loss or recovery from a major incident.

The warning comes after a chemical fire broke out on board a container ship travelling off the coast of Sri Lanka on May 25 and the recent events in the Egyptian Suez Canal where a giant stranded container ship became stuck.

Mr Gunter said: “Both of these major events show just how vital it is for importers and exporters to ensure they have freight insurance in place to protect from any loss of goods.

“It’s very easy to think you don’t need insurance and that your business can pick up the bill for any losses to goods in transit however, in practice, it is not quite so simple due to long-established principles which are embedded in Maritime Law.

“For example, in an extreme situation such as a fire or when a vessel gets stuck or stranded, the owners of the ship may take the decision to try and preserve the safety of the ship, crew or cargo by declaring general average.

“In these circumstances it means any business or organisation which has freight on board the ship is required to proportionally share the losses resulting from the crisis.

“Having the right freight insurance in place however will ensure that businesses are able to offset any risk and avoid paying out hefty charges.

“It’s something we recommend to all our customers, and we would strongly advise all businesses managing their own imports and exports to carry out a review of their freight insurance policies sooner rather than later.”

Global Freight Services has been providing freight forwarding services to customers for 25 years. In the last six months alone, it has supported hundreds of businesses through the Brexit transition by helping them to make the necessary preparations for new trade rules with Europe.

This was posted in Bdaily's Members' News section by Lorna Mccann .