Each year approximately 20 million shipping containers are transported by sea along international shipping routes. Unfortunately, not all of them arrive at their final destination.
The precise number of containers lost overboard each year varies, but there are estimates that as many as 5,000 a year are lost to rough seas, accidents, pirates, or because they were insufficiently secured when they were loaded.
“We think there is a very strong case for cargo insurance,” says Chris Cser, Operations Manager and Director of International at ICAT Logistics Detroit. “Every cargo should be insured, warehouse-to-warehouse, to meet the needs of the exporter or importer involved in an international transaction,” he says.
“It isn’t only that the cargo is lost when the containers go overboard,” says Cser. “In the worst cases, the containers float for a long time before they sink, even though they may weigh as much as 70,000 lbs. If a ship runs into one, it’s like colliding with a building. Later, if the container sinks or breaks apart, its contents can cause environmental problems which, like the lost freight or a collision, become the responsibility of the shipper.”
In one vivid example from 2004, a ship en route to Los Angeles lost 15 containers during a bad storm. One of the containers was found inside a marine sanctuary and the shipper not only lost the cargo and had to pay for it, but was also forced to pay $3.25 million in compensation to the sanctuary for environmental damage done. The sanctuary is still studying the effects the container is having on sea life and ocean currents.
For the most part, container shipping is a safe and efficient business. The odds of losing a container are slim considering that the industry ships about $13 trillion a year of cargo.
At ICAT Logistics Detroit, we have great confidence in the companies we use to ship goods by air, land and sea. “But accidents happen, even at the best suppliers,” says Cser.
“Our advice to shippers is that they pay a little extra and mitigate the risk of having to paying dearly for a cargo lost at sea.”
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