The sea or ocean connects a ship to every continent of the world. It offers several opportunities for business entities to conduct business activities. At the same time, there are several risks associated with this business. The ocean offers to transport goods from one nation to another. However, the risk of transporting goods via water alarms several issues.
Emerging risks in transporting goods via water or sea is a significant issue for shippers and various business entities. However, such issues can be evaded by taking appropriate measures.
Let us discuss the risk in transporting goods via water and its measures.
Weather hazard is the most prevalent risk associated with ships while transporting goods via water. Some common risks associated with the weather are cyclones, floods, hurricanes, typhoons, etc. The cargo vessel may altogether sink the vessels. Moreover, the winds of hurricanes may approach with a speed of 160 miles per hour. It may cause severe damage to the cargo. The business may incur a heavy loss.
A ‘Tall Ship Bounty’, while transiting via hurricane, sank off. In this incident, 16 people were seriously injured. At the same time, one crewmember lost his life. Additionally, no one could ever find the captain of the ship. The ship was designed at a value of $ 4 million. The owner of the ship incurred a heavy loss due to the sinking of ‘Tall Ship Bounty’. The incident took place on 29 October 2012 in North Carolina.
The geographic hazards are the risk associated with the water. Such hazards are known as icebergs, reefs, sandbars, etc. It makes the ship risky to navigate. There have been several incidents that occurred in the past. For example, the famous Titanic case compromised the life of several passengers. The ship sank after striking a big iceberg. The incident took place in 1912. Since then, several advancements have been made in order to avoid such incidents. Nevertheless, geographic hazard is still a prominent risk for the ships.
The technological hazards refer to the technical problems with the ship. For example, the machinery or equipment installed on the ship may not work properly. It may have a navigational issue which may take the ship to an unwanted route. As a result, it may cause severe loss to the owner of the ship. The World Shipping Council (WSC) has estimated a loss of 675 containers every year in the sea due to mechanical issues.
The ship owner must avoid such issues by conducting the proper inspections of the ship at regular intervals. The equipment must be up to date before sailing in the ocean.
A business may avoid the aforementioned problems by subscribing to marine hull insurance. The shipper may take several precautions. Still, the risk is pervasive. The incident may take place at any moment in the sea. Therefore, it is important to subscribe to marine hull insurance, which offers appropriate compensation for the damage or loss caused to the body of the ship. Further, the loss or damages caused to the goods shall also be covered under such insurance.
Conclusion
The owner of the ship must subscribe to the marine insurance policy in order to avoid risk in transporting goods via water. The marine policy offers appropriate coverage for the damage or loss caused to the ship and its owner.
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