FOR IMMEDIATE RELEASE: February 23, 2023
Contacts:
PMA: news@pmanet.org, 415-576-3244
ILWU Coast Longshore Division: Jennifer Sargent Bokaie, jennifer@ilwu.org, 503-703-2933
ILWU-PMA Update on Contract Talks
SAN FRANCISCO, CA (February 23, 2023) – The international Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) announced today that they continue to negotiate and remain hopeful of reaching a deal soon. The parties have agreed not to discuss negotiations in the media as collective bargaining continues.
Negotiations for a new collective bargaining agreement covering more than 22,000 dockworkers at 29 West Coast ports began on Tuesday, May 10, 2022, in San Francisco. The parties have reached a tentative agreement on certain key issues, including health benefits, and remain committed to resolving remaining issues as expeditiously as possible. Talks are continuing on an ongoing basis until an agreement is reached.
Negotiations are not open to the media or the public, and news articles purporting to know what is happening at the bargaining table are speculative at best. During negotiations, West Coast ports have continued to operate.
Did you know:
General insurance policies rarely cover marine cargo claims. You need a marine cargo insurance policy, or you may need to purchase marine cargo insurance on each shipment.
Many carriers will not take responsibility for loss or damage if a warehouse signs off clean on a POD. It is critical, before signing a POD, to note the condition of the cargo. Claims are usually time-barred, unless filed within a few days (standards vary by carrier). So alert your carrier to possible damage immediately. The best way to do this is by signing the delivery receipt notating damage! And be specific, for example, 8 glasses broken, 10 boxes crushed (Make ensure that you have the correct boxes or pallet count).
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, marine cargo insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance!
Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you depend on the carrier to cover losses, their responsibility is very limited (by law), as follows:
Ocean Carriers $500 per shipping unit (a shipping unit may be defined as one ocean container)
Air Carriers $9.07 per pound
Truckers $0.50 per pound
The cargo insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative for your free quote.
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protect your investments by insuring your goods, and provide peace of mind.
According to internationally accepted trade terms, referred to as Incoterms, suppliers selling CIF are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to control the selection, and thereby, the quality, of insurance coverage.
Foreign suppliers and their forwarding agents often add on additional fees to the insurance costs. Those added fees inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.
Additionally, when other parties arrange insurance, you run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions.
At least make certain the insurer being used has a favorable financial rating supplied by a respected financial rating service. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Are you familiar with GENERAL AVERAGE?
There are a number of notable cases of damage or loss to a vessel, with many resulting in General Average! More recent examples include:
- Ever Forward, March 2022
- Ever Given, April 2021, stuck in the Suez Canal
- Yantian Express, January 2019
- APL Vancouver, January 2019
- ER Kobe, February 2019
- Sincerity Ace – January 2019
- Maersk Honam – March 2018
- Maersk Kensington – March 2018
- Hyundai Auto Banner – May 2018
- MOL Prestige – February 2018
- Caribbean Fantasy – June 2018
Ever Given – The claim process is still ongoing. The average time a case can take is two to seven years.
General Average claims can include a long list of expenses, including damage to the vessel, re-floating efforts, towing and salvors. Egypt alone believes it is owed more than $1 billion in the Ever Given case.
General Average – Background
- Basic principle – “that which has been sacrificed for the benefit of all shall be made good by the contribution of all”.
- Applies to maritime claims only.
- Is declared by the captain when there is imminent danger to the vessel, voyage or crew.
- You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs.
How does General Average work?
- Value of the voyage is determined (vessel value plus value of all cargo on the vessel).
- Participation in costs is determined by the percentage that the value of your cargo bears to the overall value of the voyage.
- The loss amount is determined, and participation percentage is applied, to the loss amount, to determine security deposit.
- Shipper/Consignee or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.
- Freight may not be released until ALL deposits/payments have been received by all parties involved.
Difficulties of preventing and extinguishing fires on the open sea, which increases the likelihood of a General Average claim, include:
- Ships are larger with more varied cargo.
- Crew are ill equipped to deal with these fires.
- Fire-fighting tugs are often days or weeks away.
- Prevention is difficult, with rising problems with mis-declared cargo.
- IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)
Problems Facing the Industry
- Stricter rules on Dangerous Goods cargo will lead to higher costs and more incentive on the part of shippers to avoid proper declarations.
- Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis.
- National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG.
General Average will (probably) never go away, so, keep yourself informed:
- Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.
- Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.
- Have a contingency plan or at least an understanding of how the event will unfold.