As most of you know, there is an ongoing military action in Ukraine due to Russia invading Ukraine February 24, 2022. Along with hoping for the best for the people of Ukraine, I must also address what Russia’s military action means to your logistics risk and cargo insurance for your international shipments. Please review the below four bullets to keep in mind in the current shipping environment.
01. First and foremost, along with normal excluded, sanction, and embargo countries, availability of cargo insurance to and from Russia and the Ukraine is now suspended for an unknow time. This suspension of service covers all modes of transport.
02. As you may be aware, for some first and second world countries, War & Strikes coverage is included with your cargo insurance. Depending on the countries your shipment originates, and is destined for, this may not still be the case. Some insurers may be up charging for War & Strikes coverage or excluding War & Strikes altogether. By my experience, this is most prevalent with European countries and countries surrounding the Black Sea. If you have a question whether the countries you are shipping from and to, send me an email with the locations and I will be happy to check. Please keep in mind, the global situation dictates the answer I give you is only good for the day I give it to you and does not apply to all insurers, just your insurer as a customer of TJO Cargo.
03. Even if your shipment is not shipping from and too Ukraine or Russia, the conflict may impact your cargo or its insurance. To your reasonable knowledge, in the event one, both, or any, of the companies involved in the purchase/sale of goods resulting in a transport is, or happens to be owned by, a Russian Oligarch, it is likely a sanctioned transaction where insurance cannot be provided. Just this week we had a shipment from the lower 48 States USA to Alaska USA of close to $5 Million put on hold due to the construction company receiving the goods ownership traced to sanctioned Russian ownership.
04. Cargo insurance rates may be increasing soon. Along with the increased cost of operations we all face during this time of spiking inflation, maritime cargo insurance underwriters are additionally faced with overall higher risk factors than normal. Unstable and changing shipping routes and negative economic pressures invariably increase losses in the transportation market. Please note, even though the market is ripe for an increase, I have not been notified of any official rate increases as of this time.
If you have any questions regarding this blog post or its content, please don’t hesitate to contact me at tom@tjocompany.com. In the event there is more information regarding your cargo risk and cargo coverage, I will again notify you via our blog post. Thank you for your continued support.