By Richard Kamppari Baker, Claims Director, World Insurance
Panama Canal Drought—The Panama Canal Authority has been restricting traffic since this past summer, resulting in numerous stuck or delayed shipments. This includes a heavy backlog of goods that have been sent to meet increased demand in the upcoming Holiday season.
The delays have been caused by drought in the canals, made worse by ongoing restrictions. This will result in containers of perishables and Holiday-market products arriving after their ETA. This is likely to lead to a mass rejection from the consignee and increased abandonment when they do arrive.
From a Freight Forwarder’s perspective, delay is generally excluded, especially if it falls outside your control. Claims of such nature should be rejected. This might cause friction with customers, but to avoid expensive claims, it is imperative not to agree to specific times or dates of arrival.
Insurers, however, expect to receive many uncleared or abandoned containers that were intended for a particular market and no longer retain the same value. It is important for the Forwarder to carefully monitor all containers that might be traveling via the Panama Canal and notify their liability insurers immediately.
Also Read: What is a Freight Forwarder? Why Do You Need It?
If the goods are likely to be abandoned, it is important to notify early to avoid incurring unnecessary storage or demurrage costs.
The shipper or consignee must be made aware that they cannot simply abandon delayed cargo without settling all charges. Even if the cargo has little value, it will be less expensive for the shipper to accept delivery than to abandon shipments.
In conclusion, while the Panama Canal drought may cause delays, staying proactive can help you handle the situation smoothly. Keep yourself updated, adjust your logistics plans, and consider alternative shipping routes to minimize disruptions.
Maintaining your supply chain requires flexibility and quick decisions. If you need expert advice and risk management support, Azure Risk is here to help. Don’t hesitate to contact us.
