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Maersk has rolled out a new insurance product for its liner shippers that provides cover for container cleaning expenses, as well as offering protection against damage.
“One in three containers globally sustain damage or require a clean-up, leading to avoidable delays and costs for shippers,” claims Maersk.
Maersk is promoting a two-tier level of insurance cover with a Container Protect Essential (CPE) policy, offering “limited coverage for container damage and cleaning costs”, and the more expensive Container Protect Unlimited (CPU). providing “unlimited coverage for container damage and cleaning costs, across all commodities”.
However, a straw poll of The Loadstar’s contacts this morning showed shippers were not convinced of the need for the additional cover because most major damage to containers occurs during ship-to-quay discharge and loading or onboard the vessel.
Reactions ranged from “another money-spinner for Maersk”, to “its a clever way to cut down on the billing for damage repair”.
Several contacts queried Maersk’s “one in three” claim of containers damaged or requiring a significant clean, which the carrier extracted from its global equipment report.
“It depends on what you mean by damaged,” said one contact. “I think it’s much lower than a third, unless you include all the minor dents and scratches that are normal wear and tear for a box.”
Moreover, it is often difficult to establish where minor damage to a container (such as “dented and scratched”) has occurred, as inspections in the intermodal chain can be limited to a brief visual check by a truck driver in the middle of the night.
However, when the container is returned to the depot, charges are normally incurred for “sweep-outs” and for removing hazardous labels. Depending on their authority, depots may decide a repair is necessary, and would have the latitude to carry out the repair up to a certain cost level, whereafter the carrier’s surveyor would need to approve work.
At first glance, the price for Maersk’s CPE or CPU insurance across its network appears quite random. Vespucci Maritime CEO Lars Jensen identified inconsistencies in the countries where the extra insurance is being offered.
“In Poland, the (CPU) insurance premium is $170, but you are only covered up to $300,” noted the analyst, who added that Maersk’s local site was showing a container cleaning fee of just €25, suggesting taking out the insurance might be expensive in comparison.
No doubt Maersk will need to iron out anomalies in its pricing as they push the product and it definitely needs to be available online, which at the moment it is not. It is currently only available within contracts, or to add to spot business – “you can reach out to your Maersk sales representative”, it says.
Meanwhile, another contact suggested it was the wrong time to launch the product.
“It might have been more successful last year when Maersk had the whip hand, but now shippers are back in the driving seat and it will be difficult to bill them for extra container fees anyway,” said the contact.