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Cargo delay caused by Egypt turmoil

Earlier this year, a number of anti-government protests erupted in many of the middle and eastern parts of North African countries, including Egypt where the Suez Canal is located. The Suez Canal is a hub for worldwide cargo transport despite being the world’s biggest non-gated canal. If cargo vessels sailing between Europe and Asia do not use the Suez Canal, they will have to spend more time going round the Cape of Good Hope in South Africa. During the anti-government protest in Egypt, the world’s largest marine transport container group closed quite a few facilities within the Suez Canal, including a container terminal. As a result, cargo vessels which had planned to unload in the Suez Canal would now have to resort to alternative measures.

In order to fulfill their contracts and have cargoes sent to their destinations, shipping companies and/or cargo owners may choose to re-route and transport the goods to ports nearby. This may cause transport delays which could result in owners suffering losses. So, will transport delays caused by re-routing due to emergencies be covered by cargo insurance?

According to the Institute Cargo Clauses, any direct or indirect losses caused by cargo delay is considered as an exclusion in cargo insurance. Hence, when cargo owners consider re-routing and unloading cargo in nearby consignee ports due to any emergencies, they must provide a written notice to their insurance company to obtain the company’s consent before such re-routing takes place, or they may discuss extending the coverage of original policy with the insurance company. Under any other circumstances, if the voyage deviates from its original planned route, cargo owners may lose relative cover of the cargo insurance.

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