In the marine claims industry, very little is perceived as straightforward. No matter where goods are produced around the world or the manner in which they’re shipped (by sea, land or air), challenges will inevitably surface.
Transferring cargo and liability implications
Let’s say you log into the Amazon app, search for a tablet and submit the order. There are quite a few individual factors that play a role in getting that device from your cart to your doorstep. The process might start in Kenya, where the copper is mined to construct the device. Then it might be transferred to China, where the assembly process takes place, before it’s transported to storage, with as many stops as necessary in between. The tablet must then be sent to an Amazon distribution or fulfillment centre, before finally making it onto a vehicle and arriving on your doorstep.
But who’s considered liable for the goods during each step of that process? There’s a slew of complex factors to assess, and a range of parties involved, including the legitimate owner of the goods, the owner of the warehouse where the goods are stored mid-transit, and the carriers or others involved with physically transferring the cargo, among others. And each of these parties likely maintains their own nuanced policy coverage.
At some point in this tenuous process, ownership of that cargo — electronics, or whatever it may be — transfers. But where? At the warehouse, in the carrier’s possession, or your doorstep upon being delivered? It’s only through investigating the direct cause of the loss and circumstances surrounding the event that a determination can be made regarding which entity carries the risk of that cargo, and subsequently, who should receive payment in a cargo claim.
Maritime and transport risks
A myriad of risks could inhibit the shipping and transit of commodities. Traffic accidents, such as collisions, can severely damage cargo, a common occurrence. Events can prevent cargo from being delivered, or unintentional damage can occur. Cargo thefts or hijackings can be carried out by criminal syndicates or other third-parties mid-transport. Anything that has the potential to damage a load of cargo is a viable risk.
Warehousing risks in particular are a significant — and growing — concern in the marine industry. The facilities where goods are stored could flood, for example, or theft could occur at the hands of an on-site subcontractor. One cargo theft analysis found that warehouses and distribution centres are the top targeted location type among the global supply chain, with car-parks coming in second.
Whatever it may be that causes the loss, it will need to be established whether the warehouse keeper holds the liability for those goods, or not.
Many parking areas designated for lorry drivers exist in the UK, but few will advertise that their facilities are secure due to security risks. Drivers should be meticulous about choosing their parking location and ensure it’s as secure as possible to minimise risk of theft. Additionally, hauling organisations should conduct a comprehensive vetting process before hiring each driver. An employee who has nefarious ties would have first-line access to identifying high-value, attractive cargo and/or facilitating its theft. Cargo that’s particularly attractive should be transported same-day, if possible, rather than a higher-risk overnight journey.
Key factors of an investigation
In the event of a loss, a special investigation must occur to begin moving the claims process forward. An adjuster must be present on the ground to assess all aspects of the loss and collect all available information and evidence. Adjusters seek to establish liability at the time of the loss event, sift through the wide-ranging laws and compliance requirements of relevant locations, determine if negligence or nefarious activity took place at any point during the cargo-handling process, review documentation, assess the condition of the damaged goods or work to recover goods that were stolen, and deploy risk mitigation tools to minimise the possibility of future losses.
Learn more: Find out more about Sedgwick’s global network of marine specialists and marine claims operations solutions in the UK.
Parisa Kheradmand, Marine Surveyor and Major and Complex Loss Adjuster, Sedgwick