Several cargo ships have lost a large number of containers in recent months in different incidents, reports the Wall Street Journal.
On January 16, the Maersk Essen cargo ship, which has a capacity for 13 K TEU, lost around 750 containers in the Pacific Ocean during a storm. Earlier in November, the One Apus container ship hit the storm losing an estimated 2 K containers. The vessel was on its way to California but was eventually forced to sail to Kobe, the Japanese port, with hundreds of tipped-over containers on board.
Such incidents related to harsh weather are rare, but their number has been on the rise this winter, especially in the Pacific. Insurance companies estimated the loss of three thousand containers at sea over the past two months, writes the WSJ.
The World Shipping Council, the American trade organization, reported in July 2020 that each year between 2008 and 2019 on average of 1,382 containers were lost at sea.
Legal specialists of TELS Group are reminding that according to the current international law, sea carriers are not liable for the losses incurred by cargo owners resulting from the storm.
Admittedly, the list of circumstances when the carrier is not liable for the safety of the cargo is quite long. The United Nations Convention on the Carriage of Goods by Sea (Hamburg, 1978) lists the following:
a) force majeure;
b) perils, damages or accidents of the sea or other navigable waters;
c) war, armed conflicts, piracy and terrorism, riots and civil commotions;
d) quarantine restrictions; interference or obstruction by the governments, public authorities, rulers or people, including detention, arrest or seizure through not attributable to the carrier or any person referred to in Article 18;
e) strikes, lockouts, stoppage or restraint of labour;
f) fire on the ship;
g) inherent defects that cannot be discovered with due diligence;
h) acts and faults of the shipper, documentary shipper, controlling party or any other person for whose acts the shipper or the documentary shipper is liable under Article 33 or 34;
i) loading, handling, stowing or unloading of cargo performed according to the agreement reached under Paragraph 2, Article 13, unless the carrier or the performing party is carrying out such activities on behalf of the shipper, documentary shipper or consignee;
j) loss of volume or weight or any other loss or damage arising from inherent defects, properties or vice of the goods;
k) insufficiency or poor condition of packing or markings not performed by or on behalf of the carrier;
l) saving or attempts to save life at sea;
m) reasonable measures or attempts to save property at sea;
n) reasonable measures or attempts to avoid damage to the environment; or
o) the actions of the carrier pursuing the powers under Articles 15 and 16.
In all these cases, the cargo owner loses the cargo (or part of it) permanently and without compensation. And besides these losses, when the carrier declares the incident, the cargo owner must also pay his share of ship salvage and other costs incurred by the carrier by placing a deposit covering the costs.
How to protect your interests?
What is the best solution for the cargo owner if the compensation from the carrier in the event of loss or damage to the cargo is incomparably smaller than the value of the cargo (and in the worst case, there will be no compensation at all)? Insure your cargo for the time of transportation (declare the actual value of the cargo, especially if you are transporting articles of special value in large cargo units).