Bulk Cargo Claims and 4 Things You Must Know
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In commodity trading, misconceptions surrounding bulk cargo claims and their resolution abound. From relying solely on marine insurance to overlooking the importance of subrogation, grain traders often face unexpected pitfalls that can escalate transit losses. This article aims to debunk common misconceptions surrounding cargo claims recovery and emphasize the necessity for active engagement in protecting traders’ interests within the evolving landscape of commodity trading.
Relying Solely on Marine Insurance for Cargo Claims Recovery
A common misconception among grain traders is relying solely on marine insurance to recover transit losses. However, this exclusive dependence can lead to unexpected costs and delays in compensation. Insurance providers often raise premiums, apply deductibles, and seek ways to exclude coverage or reduce claim payouts. While marine insurance is essential, it should not be the only defense. Traders should actively engage in loss prevention and mitigation actions.
Passive Approach to Post-Discharge Cargo Loss Mitigation
Another misconception is that once a sale contract is signed, the seller bears no responsibility during cargo discharge. This passive stance can escalate transit damage costs and lead to significant losses. Lack of seller involvement during discharge can worsen damage to cargo, resulting in operational costs and potential disputes. Collaborative efforts among stakeholders are crucial for timely resolution and mitigation of losses.
Overreliance on P&I Clubs for Cargo Damage Disputes
There’s a misconception that P&I clubs will champion claim settlement. However, they represent vessel owners exclusively and may reject or minimize cargo interest claims. Grain traders should actively participate in defending cargo interests, collecting evidence, and mitigating losses instead of solely relying on P&I clubs.
Neglecting Subrogation Action After Claim Settlement
Recoupex’ experience handling bulk cargo claim recoveries shows that a staggering 85% of traders tend to neglect the recovery process once they have received payment from their marine insurer. However, this approach hinders loss prevention strategies and industry-specific knowledge that could aid recovery efforts. Traders’ involvement in subrogation is crucial for proactive measures and long-term protection of their interests.
As the commodity trading industry continues to evolve, it’s essential for grain traders to recognize the importance of actively engaging in claims recovery processes. Embracing proactive measures such as loss prevention and subrogation, exporters, importers and traders alike can safeguard their interests, optimize financial performance, and contribute to the long-term sustainability of their trade.
Recoupex is a hub of transport lawyers – experts in cargo claims. We assess your case quickly. We have successfully recovered claims from Maersk, Sealand, Hapag-Lloyd, Mediterranean Shipping Company – MSC, CMA CGM, and other carriers.
