Buying a Demurrage Insurance Policy Protects Your Business From Unwarranted Penalties

shipping business

If you own a shipping business, you might have encountered problems regarding the delay in the loading and unloading of shipping vessels. The pickup schedule is in shambles. The customs department doesn’t want to lay off your back. The weather is horrendous. There are too many adverse conditions that might affect the effectivity of your shipping business. In fact, the shipping industry is most probably one of the most problem-ridden industries in the world.

Any good businessman, however, knows that to protect his business, he needs to buy a demurrage insurance policy. This type of insurance will protect your business from having to pay unwanted and unwarranted charges, penalties, and fees for failure to load and unload the cargo in time. It also safeguards the shipping company’s rights from undue detention.

While there are many reasons a shipping vessel and its cargo and containers can be detained or delayed, the following are the most common:

Changes in shipping schedule

When you don’t follow the schedule drafted by your sales and logistics teams, you tend to arrive late on the port of destination, which leads to a delay in the loading and unloading of the cargo. To keep your reputation strong in this industry, try to stick to the schedule you promised your clients. This way, you will earn the trust of your customers and secure repeat business.

Weather conditions

hurricane

There are a lot of things we cannot control in the shipping business. The weather condition is the most unpredictable components of good, safe, and on-schedule sea voyage. The deviation from the route because of bad weather conditions causes a lot of money and time. When the weather conditions are extreme, a ship may need to take shelter in the nearest safe port, further delaying the transport of cargo.

Navigational hazards and mechanical issues

There are other things that might force a shipping vessel to change its course aside from weather conditions. Various floating objects such as ice, anchors, fishing nets, and barrels may trigger a shipping vessel to alter its direction. The reason for this is because a ship does not want to trigger any mechanical malfunction that may arise from barging their way through the rubbles and obstruction.

Wars and hijacking

During the Arab Spring, there was a huge problem in the shipping industry because most companies needed to pass through the ports in the Middle East and Northern Africa. But since war is almost imminent and there were a lot of civil disobedience movements and rebellious forces that affect the safety of the ports, the ships had to change route and find alternative ports to refuel.

In the high seas, hijacking is also common in the Gulf of Aden, which is one of the world’s busiest shipping lanes.

An insurance policy taken to protect a shipping business from problems that may arise because of one of the reasons mentioned above is the most natural and wisest decision an owner of a shipping business can make. Be sure to look for a reliable provider of a marine insurance policy to ensure the safety of your crew and the goods you transport.