THE FREIGHT HERO'S WEEKLY SUNDAY BLOG — 23 FEBRUARY 2025
Sharing fairly?
The Freight Hero has been admitted as a member of FENEX (the Netherlands Association of Freight Forwarders), so that customers know that reliability and quality are assured. The Freight Hero is also entitled to apply the official Dutch Forwarding Conditions. It is important to know what the conditions stipulate about liability for damage incurred.
Liability
Article 11 states that, in all cases of damage, the freight forwarder can be held liable only up to 10,000 SDR (Special Drawing Right). The SDR is an international artificial currency based on the US Dollar, Euro, British Pound and Chinese Yuan. Its value changes daily and is set against a specific currency by the International Monetary Fund (IMF). The SDR currently has a rate of EUR 1.26. Under the FENEX conditions, the forwarder's liability is limited to 4 SDR per damaged kilogram.
Risk
There is always a risk when transporting goods. Extreme weather conditions at sea, for instance, play a major role and can cause considerable damage. Moisture and leakage during storms and high waves can occur, and containers can also be lost overboard. The actual damage incurred is then often many times greater than the damage that is covered. The Freight Hero therefore offers shippers and cargo owners the option of insuring their freight by means of a cargo insurance policy. One often-forgotten loss is also covered by this insurance: what is known as General Average.
Fair
In emergencies, shipping lines can recover damage incurred, on the basis of General Average, from all cargo owners aboard the ship. If a deliberate sacrifice of cargo or expenditure is made to save the ship and the remaining cargo, those cargo owners face a proportionate share of the costs incurred. This goes under the heading: 'sharing fairly'. The thinking behind it is the age-old principle that a sea voyage is a joint venture. Without cargo insurance, these costs land squarely on the shipper. Cargo that ultimately arrives at the port of destination will not be released without payment.
Ever Given
A well-known recent major example of general average is the container ship Ever Given, which blocked the Suez Canal in 2021. Enormous towing and salvage costs were incurred at the time. The cargo owners had to provide a guarantee through their cargo insurance. If they could not, they had to pay.
One Hammersmith
But there are countless other, smaller examples. On 27 September 2024 the One Hammersmith was en route from Asia to Rotterdam and developed problems with its main engine. The ship lost propulsion and, because of the bad weather, drifted towards the coast of Brittany in France. The ship was towed to Rotterdam by a salvage company and was then repaired there.
Unfair
The company Gendai Sake had cargo aboard the One Hammersmith via The Freight Hero and was confronted with the cost allocation, facing an extra 5% of its goods value. For owner Tim, the imposed costs of almost EUR 1,000 felt very unfair indeed. "Because of engine trouble through no fault of my own, I have to contribute." He contacted his dedicated point of contact at The Freight Hero. "Beforehand I had still been in two minds about taking out the cargo insurance. I didn't even know exactly what was covered, but I was reassured straight away. The damage was covered by the insurance. I filled in a document and returned it, and within a few days the goods were released and everything was sorted."
So no more doubting. The Freight Hero's cargo insurance for sea freight is truly no unnecessary luxury.