As over 50% of global trade risk is held in only 50 key ports, any serious incident at a major shipping hub can have serious implications for international trade. The recent blockage of the Suez Canal highlighted how trade is connected, and that a problem in one locality can have consequences for multiple organizations and businesses around the world. While major incidents can’t always be avoided, appropriate freight insurance will at least cover potential losses caused by delay or disaster. In addition, cyber insurance customized for the maritime industry covers the increasing threat of cyber attack to shipping systems. To further minimize hold ups, businesses should also be prepared for strict customs regulations for importing goods to the US and other destinations.
Covering Custom Duties And Taxes
Over 50% of e-commerce sellers find dealing with customs one of the hardest challenges of international shipping. Completing the appropriate paperwork, paying additional shipping fees, and researching local regulations can be daunting. However, if they are completed correctly, these actions will minimize unexpected delays and delivery fees, both of which can damage future sales. Meeting strict customs regulations for shipping to the US also includes covering the duties and taxes on imported freight. These are covered by the company in normal circumstances, but if for some reason it is unable to pay these costs, a customs bond provides insurance that the government will receive all that they are owed on the goods. This will ensure merchandise is allowed to enter the country and reach its customers without delay.
Reviewing Freight Insurance
Major shipping disasters serve to remind companies to review their insurance policies. Without the appropriate cover, they could face significant costs when goods are delayed in a port blockage or completely destroyed in a fire. If a ship becomes stranded, ship owners may declare general average in order to protect the safety of the crew, vessel and cargo. This means that any business with freight on board pays a proportional share towards the losses. This can be very costly, but with freight insurance in place, companies can offset the risk and avoid substantial payouts.
Protecting Against Cyber Crime
As well as physical causes of delays and losses, like any business sector, shipping can be vulnerable to cyber attacks. There have already been several notable examples of ransomware attacks and threats to IT systems affecting booking systems. In addition, compromised systems could lead to interference affecting the prosecution of a voyage. If goods are wrongly directed, this could lead to claims against shipping companies for delays and losses. In response to the increasing threat, several insurance companies are now offering specialist maritime cyber insurance to help ship owners resume operations promptly after an attack and cover any losses of cargo.
Shipping incidents are sometimes unavoidable. However, specialist maritime insurance policies and the appropriate cover for customs can help companies offset the risk of delays and damage to their freight.