Why do shipping containers disappear?
Every year thousands of cargo containers disappear from ships around the world. But where do they go? And are they ever found again?
Today, we’re blogging 4 reasons why shipping companies need cargo insurance more than they probably realise.
- Shipping containers get lost at sea
A survey conducted by the World Shipping Council (WSC) found a significant increase in shipping containers lost between 2011 and 2014.
Between 2011 and 2013, the WSC estimated that 733 shipping containers were lost at sea every year during that period. This amount did not take into account shipping containers lost as a result of a catastrophic event.
Compared with the 2008 to 2010 period, this figure has more than doubled.
- Cargo theft is on the rise
Cargo theft is also reportedly on the increase, even before taking piracy into account. (Head here for our blog on Piracy in East Asian increasing by 197%.) Most cargo theft actually occurs through fraud or identity theft.
In Montreal last year, thieves stole 16,000 kilograms (16 metric tons) of silver bars valued at $10 million. Thieves drove a stolen large Freightliner truck past security at the port, picked up the sea container and drove it to a small town out of Montreal.
The thieves were eventually caught, and the silver recovered, thanks to tips from the Canadian public. Read the full story here!
- Damage to shipping containers
Cargo damage is even more common than theft or even containers lost at sea. According to a large Marine Protection and Indemnity company in the UK, cargo damage makes up the majority of their shipping-related claims.
The UK Company said the most frequent claims related to:
- Physical damage
- Containers lost overboard
In most cases, damage was caused by poor storage. But poor packaging, inadequate ventilation and incorrect container choice also topped the list.
- Contract requirement
Shippers are often required to take out Ocean Cargo Insurance, in order to protect the interests of buyers, or the shipper’s bank. This stipulation is usually inserted in the fine print of a contract, which is why some shippers overlook insurance cover and eventually get caught out.
If a shipper doesn’t take out cover when they are obliged to contractually, they may be required to cover the financial losses of their buyers, if loss or damage does happen to cargo.
Legal problems can also ensue, which is why it really does pay to take out cover in the first place.
Get covered today
For more information on Ocean Cargo Insurance, please contact our marine underwriters. We have comprehensive, affordable policies, which will protect your shipping business in the event of loss or damage to cargo.