The MV Zim Kingston suffered a large fire on 23 October 2021 when approaching the Strait of Juan de Fuca. Apparently, the vessel from South Korea suffered damage from a heavy storm and some combustible powder from containers ignited.
Luckily the fire was eventually brought under control without any loss of life, but it is still unknown the number of containers damaged or the subsequent knock-on effects. A number of containers fell overboard, and the fire is still smouldering.
In times of high freight charges, container shortages and international trade shortages these types of incidents are most unwelcome. The vessel will not be going anywhere for the foreseeable future or at least until the bad weather recedes but what does it really mean for forwarders?
If your containers are directly involved this would mean the usual claims for damage, delay, or loss. There is a strong possibility where General Average will be declared which will require Cargo Insurance Securities or cash deposits to be placed to retrieve the containers. No doubt this will place unnecessary strain on the forwarder’s relationships in the absence of cargo insurance.
Furthermore, the incident will also cause considerable delays on future shipments if the Zim Kingston must be repaired and other vessels requiring repositioning. This is likely to have a disruption to the Holidays trade and delay related claims against forwarders.
From an insurance point of view, the most concern will be with the containers responsible for the fire. Whether you are the exporter from Korea or the booking agent, the carrier will hold them responsible and pursue for what they can. This will be costly especially as it seems the carrier has already identified the persons responsible.
If you have any cargo on board this vessel, we strongly recommend you immediately notify your cargo insurers in order to assist with any General Average or damage-related matter. Your liability insurers should be notified in respect to any potential claims against you but especially if any of your containers could be responsible for the fire.
For more information, please contact Richard Kamppari Baker.
This article was first published in its entirety by World Insurance.