60% 2022 85% Percent The year of


Between February and May 2022, the price paid for the transport of dry bulk goods, such as grains, increased by nearly 60 percent.


Grain prices and shipping costs have been on the rise since 2020 but the war in Ukraine has exacerbated this trend


4 BIGGEST MYTHS IN BULK CARGO CLAIMS


Costly Realities for Grain Commodity Traders


For grain traders, the volatile landscape of bulk trading has long been their daily battlefield where they grapple with the intricacies of political shifts, economic fluctuations, ever-changing harvest yields, and relentless pricing dynamics. The war in Ukraine is one of several major issues currently affecting the grain trading environment compounding other challenges such as new variants of COVID-19, port congestion and the need to switch to low-carbon fuels, to name but a few. UNCTAD, the United Nations Conference on Trade and Development, concluded that grain prices and shipping costs have been on the rise since 2020 but the war in Ukraine has exacerbated this trend1


. Between February


and May 2022, the price paid for the transport of dry bulk goods, such as grains, increased by nearly 60 percent. This trend remained similar throughout 2023. However, amidst the significant challenges for grain traded in bulk, the proper management of cargo claims for charterers and traders becomes paramount. This article highlights the compelling importance of addressing cargo claims’ recoveries appropriately and demystifies the main cargo claim-related myths which cost thousands for grain traders around the globe.


1. Maritime Trade Disputed: The war in Ukraine and its effects on maritime trade logistics – 28 June 2022.


MYTH #1 - THE FALSE SECURITY OF MARINE


INSURANCE… Grain traders commonly fall into the trap of relying solely on marine insurance to recover transit losses. However, this exclusive dependence on insurance leads to unexpected and costly pitfalls. First, marine insurance companies tend to raise premiums due to bad loss records. Additionally, they often apply deductibles, meaning traders have to cover a portion of the loss before insurance coverage kicks in. Most notably, insurance providers actively seek ways to exclude coverage or reduce claim payouts, scrutinising policies to identify clauses that justify denying or reducing a claim’s value. This process can result in frustrating negotiations and delays in receiving compensation. While marine insurance is essential, it should not be the sole defense for grain traders. Traders should be more active in loss prevention and loss mitigation actions.


Percent


Recoupex in handling bulk cargo claim recoveries, shows that a stag- gering 85% of traders tend to neglect the recovery process


4 | ADMISI - The Ghost In The Machine | Q4 Edition 2023


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