What you need to know about the Maersk Honam fire and liability

21Mar, 2018

On Tuesday, March 6th, Maersk confirmed that a fire had broken out on the Maersk Honam, an ultra large container ship in the Arabian sea, which claimed the lives of five crew members. Maersk Line has stopped loading dangerous goods in areas near engine casing units on its vessels while it carries out tests to determine the cause of the fire. The insurance industry is bracing itself for hundreds of millions of dollars in claims from the fire but some shippers worry they will not have adequate insurance for the calamity. The shipping line has declared General Average, which means all parties with a financial interest in the voyage are to proportionally share the losses resulting from the fire.


Photo Courtesy of Seatrade-Maritime

While there is no official information regarding the cause of the fire, Everglory Logistics find it imperative we discuss the level of DG compliance all cargo must meet or exceed in a shared event. Shippers, importers and forwarders alike are all responsible for not only properly documenting and packing their cargo, but for ensuring all cargo is properly marked so manifesting vessels can correctly position cargo in the safest configuration for the voyage. Placards, DG training and workforce compliance are the first and best line of protection for expensive and dangerous accidents.

General average is the cost-sharing of any losses to a vessel or its cargo by the cargo owners. If a ship sustains loss or damage during her voyage, general average is declared and before cargo can be discharged, a guarantee must be posted. Shipments without cargo insurance are required to post cash bonds. The delays caused by something happening to a vessel in-transit are sufficient to push back the cargo’s delivery – lacking proper cargo insurance makes it far worse.

There is no more terrifying moment in any accident than the notification that insurance won’t cover the losses occurred, be they logistical and maritime, motor vehicle and driver, or slipping on a wet kitchen floor and needing emergency treatment. If catastrophe strikes a vessel, then all parties involved are financially responsible to the ship under the General Average declaration. Salvage and recouping value from loaded boxes can take month and shippers must be prepared to deal with the process. Having appropriate cargo insurance through Everglory gives you an advocate in this stressful situation. We offer an array of options to cover all types of cargo and can work with your needs and budget to ensure your cargo is protected and financial liabilities are kept to a minimum.


CTPAT Statement of Support

As a proud member of the U.S. Customs and Border Protection (CBP) CTPAT program since February 9th, 2012, supply chain security continues to be an integral part of the Everglory Logistics, Inc. culture and business processes.

Since its inception in 2001, CTPAT remains a voluntary public-private sector partnership program where members work with CBP to strengthen their international supply chains and ultimately improve border security, protecting the supply chain from criminal activities such as drug trafficking, terrorism, human smuggling, and illegal contraband.

Everglory Logistics, Inc. has developed, and maintains, a multi-layered security program that is consistent with the CTPAT minimum-security criteria (MSC), and remains committed to protecting our organization and supply chain from any illegal or illicit activities.

Security is everyone's responsibility. All employees and business partners, including contractors, service providers, and visitors are educated and must comply with the company's CTPAT policies and procedures that are in place at each facility.

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