Container Shipping Line Hanjin is in Receivership12th September 2016
Hanjin Shipping, the world’s seventh largest container line is in administration, and a number of Hanjin vessels have been arrested by creditors.
Some port authorities are refusing to allow Hanjin vessels to dock because of concerns about their ability to pay fees; others are reportedly exercising liens on Hanjin containers.
What this means for cargo owners
Importers and exporters with containers due to be carried by Hanjin should arrange for carriage by alternative means.
Those with cargo on board Hanjin-operated vessels should aim to ensure that voyages currently underway are continued without undue delay and will reach their destination and be discharged on schedule. However, it is likely that many containers will be discharged short of final destination.
There will be thousands of claims for the official receiver to deal with, which will inevitably take a long time. Even if freight has been pre-paid, it may be necessary to pay some elements again, to enable delivery.
Those whose containers have arrived may be asked by port or terminal operators to pay a deposit to secure release of their container, which will be refunded if the container is returned within an agreed period. There may also be additional admin or handling costs to pay.
Perishable goods will require prompt action because, unless specifically agreed, deterioration caused by delay is not covered by cargo insurance.
Cargo insurance implications
If insurance has been taken out by the importer or exporter
- goods bought on EXW, FCA or FOB terms, or on CPT or CFR terms
- goods sold on CIP or CIP terms, or on DAP, DDP or similar terms
As provided for by the Institute Cargo Clauses, but conditional upon giving us prompt notice and paying any applicable additional premium, and subject to the terms and conditions of the policy, we will hold covered on cargo if its carriage is terminated short of its intended final destination.
Cargo policy wordings may also give cover for some of the additional costs that may be incurred if the carriage is terminated short of its intended final destination. Such cover would be subject to a monetary limit shown in the policy schedule or wording, and pure admin costs may not be recoverable.
Both these types of protection will extend to customers if goods have been sold on CIP or CIF terms and the insurance has been assigned to them.
Please refer to policy documents for full details.
Shipping replacement goods and ultimately taking the original shipment back into stock is a purely commercial decision that exporters may choose to take in order to fulfil sales contracts; but there will be no claim if the original shipment suffers no loss or damage, except perhaps for some additional forwarding costs.
If goods have been bought on CIP or CIF terms
If goods have been bought on terms of sale that require the seller to arrange and pay for the main carriage and also to insure the goods for the buyer’s benefit, then importers will need to refer to the local UK agent of the insurance company chosen by the supplier. Their contact details should be on the certificate of insurance.
If goods have been bought on DAP, DDP or similar terms
If goods have been bought on “delivered” terms, then until delivery, risk in the goods and most of the associated costs lie with the seller.
For more information about the insurance responsibilities when buying or selling on CIP or CIF terms and about the transfer of risk and apportionment of costs between buyers and sellers, please refer to the Incoterms® Rules, a summary of which can be found on our website here.
For more information about Cargo Insurance, contact your local NMU Development Underwriter.