OCEAN CARGO

Presented by:

Maryann Sokolowski

February 25, 2009

What is Ocean Cargo?What is Ocean Cargo?

• Simply put – Covers goods being shipped, while in transit overseas and domestically.

• LIMITS:– Any One Vessel– Any One Vessel On Deck

(Subject to an on-deck BOL)– Any One Aircraft– Any One Domestic Transit– Any One Barge– By Parcel Post

Ocean Cargo: The PartiesOcean Cargo: The Parties

SHIPPER • Party who ships the

goods• Control over packing &

arranging goods for shipment

• Usually the product seller or manufacturer

CONSIGNEE• Party who receives or

purchases the goods• Limited control over

packing• May need documents to

release cargo at delivery

Common Terms of SaleCommon Terms of Sale

• Ocean Cargo uses Agreed Value– ACV seldom used because

most cargo is brand new, ACV doesn’t reflect costs to destination, and value is always higher at destination

• FOB: Free on Board– Title changes when cargo

passes over ship’s rail

• FAS: Free Along Side– Title changes when ship

receives cargo

Buyer assumes the interest and risk of loss at the FOB or FAS point.

Common Terms of Sale, cont.Common Terms of Sale, cont.

C&F - Cost & Freight– Seller arranges for the

freight cost, but does not provide insurance on Buyer’s behalf.

CIF - Cost, Insurance & Freight– Seller arranges for

freight and purchases insurance for both the Seller and Buyer.

– Certificate/Special Policy of Insurance issued and endorsed over to the Buyer.

– Certificate allows Buyer to present a claim at destination.

Standard Valuation Formula

[Invoice value] + [pre-paid freight]

+ an “advance” Total

• Used in CIF Terms of Sale• Advance ranges from 0% - 25%

Commodities & PackingCommodities & Packing

• What is being shipped?

• Description of Packing (i.e. cardboard boxes, shrink-wrapped and palletized).

• Are the goods containerized? Door-to-door containers? Sealed containers?

Imports/ExportsImports/Exports

Policy covers both Imports and Exports– Need to know annual values shipped– % Import or Export– Countries the goods are shipped to/from– Type of shipment (vessel, air, barge, etc.)– Maximum/average value of shipment– Shipping terms

• Warehouse to warehouse• Warehouse to port• Port to warehouse

Warehouse to WarehouseWarehouse to Warehouse

Coverage continues in the ordinary course of transit until: 1) Cargo is delivered at the final warehouse/destination

OR 2)15 days after completion of unloading of the overseas vessel if the final destination is in the port city

Provisions exist for extension of coverage due to delays beyond the insured’s control

• Notification & payment of additional premium are required

What is “Ordinary Course of Transit?”

• Transit with all of the usual minor delays• Covers incidental warehouse storage during normal transit situations• DOES NOT refer to circumstances where the insured intentionally halts the shipment for their convenience

Coverage Endorsement OptionsCoverage Endorsement Options

•Domestic Transportation Coverage

•Warehouse Coverage•Exhibition & Processing•Sales Representative

Samples•Strikes, Riots, & Civil

Commotions•War Risk•Flexible Pricing•Flexible Reporting

More InformationMore Information

Potential Customers– Wholesalers– Retailers– Manufacturers– Contractors

Key Questions to Ask– Do you import or

export any goods or raw materials? If so, who is responsible for goods in transit?

– Are any of your products manufactured overseas? If so, who is responsible for goods in transit?

– Do you sell any of your product overseas?

Final ThoughtsFinal Thoughts

• Ocean Cargo coverage can round out accounts for your customer.

• Offering this coverage makes you more valuable to the customer by meeting all of their needs.

• Keeps other agents out of the picture who are not familiar with the coverage and when it is necessary.

QUESTIONS?