The ship is about 400 meters in length, roughly equal to the height of the Empire State Building, and she is capable of carrying about 20,000 TEU. Ever Given is owned by Shoei Kisen Kaisha (a subsidiary of Imabari Shipbuilding) and time chartered and operated by Taiwanese container line Evergreen Marine. Ever Given is registered in Panama and technically managed by the German ship management company Bernhard Schulte Shipmanagement.
The ship’s large size covered the entire width of the canal, holding up vessel traffic for days. This has caused knock-on effects on the movement of cargoes globally, as 12 percent of global trade is carried on board ships using the canal. The blockage forced vessels to back up in the Mediterranean to the north and the Red Sea to the south. It is estimated that the costs to global trade was about $400 million per hour, based on the approximate value of goods that move through every day, according to Lloyd’s List.
The effect on the global supply chain due to the incident will also result in insurance claims. The claims will not come only from cargo on board the Ever Given, but from cargoes on ships delayed due to inability to transit the canal. Many of these ships faced a difficult decision over whether to wait or to divert around the Cape of Good Hope, which is a longer and costlier voyage.
Cargo insurance
The availability of recourse against marine cargo insurance policies is not a given as most marine cargo insurance does not cover losses due to delays. Delay will have arises for vessels already near the entrances to the canal where the ships decided to wait for the blockage to clear. Vessels that decided to divert from their planned voyage to take the longer route through the Cape of Good Hope will have arrived later than their planned schedules.
Most cargo insurance policies adopt the Institute Cargo Clauses issued by the Institute of London Underwriters Wordings. These wordings adopt the choice of English law and practice. This means that the terms of the UK Marine Insurance Act 1906 apply. Most of these policies are of the all risks type, and delay is excluded, per Cls 4.5:
4.5: loss damage or expense caused by delay, even though the delay be caused by a risk insured against
This would apply unless the policy is amended by endorsement to remove this exclusion, which would be the reasonable and prudent action for the assureds to take.
Salvage and General Average
The Ever Given can carry up to 20,000 TEU of cargo on board. At the time of writing it is unclear still if the ship can be freed so that the container cargoes can safely proceed to its final port in Rotterdam. The efforts to refloat the ship and to undertake any repairs form part of general average.
General average is part of the law of the sea founded on equity. It formed part of the Rhodian law, was based in earlier custom and existed many centuries before the existence of marine insurance. Rhodian law provided that, when cargo was thrown overboard to lighten a vessel, that which had been given for all had to be replaced by the contribution of all.
The most often cited legal definition of “general average” is “all loss which arises in consequence of extraordinary sacrifices made or expenses incurred for the preservation of the ship and cargo losses within general average, and must be borne proportionately by all who are interested.”
The cargo insurance of these container cargoes on board is covered by the marine insurance cover using the English Forms, as above. See Clause:
Photo Attribution: Robert Schwemmer for NOAA's National Ocean Service, CC BY-SA 2.0, via Wikimedia Commons File source:
https://bit.ly/2QF8G2S
96 | The Report • June 2021 • Issue 96
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136
