Dive Brief:
- Maersk launched Maersk Cargo Insurance, a "door-to-door" product for shippers that "covers goods from the time they are first moved for loading until the completion of unloading at destination, from and to almost every country in the world," according to a press release on Monday. The insurance will apply regardless of the transport or carrier used, the company said.
- Maersk Cargo Insurance, backed by a partnership with Zurich Insurance, will roll out a pilot phase in Spain and become available to other European countries throughout 2020, Maia Parlagashvili, global insurance product manager at Maersk, said in a statement. This is the first step in offering the product globally, she said.
- Previously, the carrier offered a cargo insurance supplement or alternative called Value Protect, which covers "loss or damage to cargo from fire, accidents due to the danger of the sea, theft, natural disaster, cyber incidents, damage caused by delay and contributions in General Average," according to Maersk's website.
Dive Insight:
Maersk's emphasis on covering shipments "door-to-door," as opposed to port-to-port, is "in line with our vision to become the global integrated container logistics company," Kim Pedersen, global head of logistics and services at Maersk, said in the release. Maersk has expanded its end-to-end supply chain offerings in recent years, doubling its warehousing footprint via an acquisition in February and further integrating its Inland Services into the core business.
A report from Loadstar estimates that, as of 2018, as many as 50% of ocean containers travel uninsured. This is despite the fact that "the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination," according to the International Chamber of Commerce. This could put shippers at risk, if an unforeseen event such as theft or a natural disaster occurs and damages cargo while en route.
The Loadstar report found shippers choose to forgo cargo insurance because they assume they aren't liable for cargo damage after goods leave the port of origin, or because they hadn't faced accidents before and expected the likelihood of one occurring would be low.
With a product that takes an end-to-end supply chain approach, Maersk offers shippers a broader value proposition in line with carriers including MSC, which offers coverage "from the moment stuffing operations start in the warehouse until the product is delivered at destination," or potentially ahead of other maritime carriers such as CMA CGM, which covers shipments "throughout the transport and up to delivery."
Shippers can opt to purchase Maersk Cargo Insurance on a per-shipment basis, or automatically for all shipments with Maersk, directly within Maersk's digital freight booking portal. It covers the following, according to its website:
- Loss or damage during end-to-end transportation of cargo, regardless of transport supplier.
- General average.
- War and strike risks.
- Almost all commodities, with a few exceptions in dry and refrigerated cargo.
- To and from any country that is not sanctioned.
- Container damage (above $500 for Maersk dry containers).
However, "delay, loss of market or consequential loss of any description," are not covered, nor is there any mention of coverage specifically related to disruptions from the COVID-19 outbreak, which has resulted in blank sailings, cargo delays and other challenges for the industry.
Shippers may be able to find relief via "force majeure" clauses in contracts, which exempt supply chain managers from complying with certain contractual obligations in the event of natural disasters, such as Hurricane Harvey in 2017, or governmental restrictions due to the U.S.-China trade war. However, the degree of relief is dependent on the contracts signed and the shippers' circumstances.
