Background. The COVID-19-fuelled spending spree by locked-down consumers in North America and Europe, particularly on goods imported from Asia, revealed the fragility of the global supply chain. Shipping delays have become common, thanks to congestion at ports, shortages of shipping containers, labour shortages, and events like the grounding of one of the world's largest cargo ships in the Suez Canal. Unfortunately, for shippers and receivers, cargo insurance typically covers loss or damage to goods, not delay. The bills of lading issued by shipping lines also usually exclude liability for delay.
Impact. Delays reduce the value of goods and create problems for manufacturers and distributors, but without special insurance, shippers and exporters have to cover these losses themselves.
Top tip. If your goods are being imported or exported, take a close look at your cargo insurance to determine whether delays are covered. If they are not, obtain supplemental insurance. If you are a carrier or intermediary, review your contracts with exporters and importers to make sure you are not assuming the liability for delays yourself.
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