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IB&M News Update - Hanjin

As Hanjin court proceedings continue to unfold, many questions have been raised regarding differing Hanjin scenarios that have caused cargo delays, additional freight charges, and damage to the cargo itself. Our clients have asked how differing insurance policies could play into the equation.

The first thing to keep in mind is that Hanjin has not abandoned the cargo it is carrying. Hanjin is actively working to ensure all containers are unloaded safely and delivered to the final destination.

In the meantime, Here are a few points to consider when Navigating the Hanjin conversations with your shipping customers.

  • Freight Forwarders, under Standard Conduct Terms, are not liable for carrier bankruptcy. Offer to help with any new shipments arising from the bankruptcy and charge standard service fees.
  • Forwarders should advise clients that some Cargo Insurance policies have a clause for “Carrier Insolvency” and may offer relief for additional on-forwarding costs.       

          Just another great reason to promote marine insurance on every shipment!

  • Under COGSA, NVOCC’s are not responsible for delay caused by unforeseen events such as “Force Majeure”. It’s best to advise your shippers you’re aware of their cargo in transit and working on getting containers delivered to the final destination.
  • Customs Brokers and Clearing agents have no responsibility until such time as they receive instructions. Customs Brokers and Clearing Agents should wait for instructions.

CBP recently released a CSMS message regarding best practices to follow for differing Hanjin scenarios in an effort to prevent further disruptions. CBP CSMS

The Federal Maritime Commission has also established their own recommended Protocol for all Public Communications Related to Hanjin Shipping Disruptions at the following link

We remind you that every Hanjin situation is very different depending on jurisdiction and how your company has represented itself in the transaction. Freight Forwarder Standard Conduct Terms and COGSA both exclude consequential liability.

If a third party submits a consequential damage claim for financial loss and attempts to hold you liable, we recommend checking on the following documents to determine potential liability:

  • Terms of Sale
  • Bills OF Ladings
  • Any Special Contracts you may have entered into

Once documents are reviewed internally, we recommend discussing these scenarios with your insurance broker to see how coverage could apply.