As per The Review of Maritime Transport Report 2021, published by the United Nations Conference on Trade and Development (UNCTAD), marine shipping is the primary mode of transport for global trade. More than 80% of international trade is carried through the sea. For developing countries, the percentage is even higher. By 2050, the volumes are expected to triple due to the increase in demand for global freight.
Marine shipping helps transfer goods from one place to another by water. It is a type of contract wherein the owner of the ship agrees to carry the specified goods of the other entity to the said destination by way of water. This service is provided in return for the premium paid under the marine insurance policy.
Being one of the oldest modes of transportation, it’s also one of the most available modes as water occupies most of our planet. Even with alternative options, like air, rail and road transportation, marine shipping is still considered one of the most efficient modes.
For anyone involved in the shipping business internationally, it is well known that marine shipping is highly feasible from a price point of view. It has various advantages, but the most important is its low cost and flexibility.
The transportation of goods can be risky, especially if it is done by sea. This is because this mode of transportation is highly subject to man-made and natural situations. Marine insurance covers the damage to ships, and cargo, incurred during transportation.
A marine insurance policy can help cover the risks faced by various intermediaries in the shipping business like the ship owners, cargo owners or terminal handlers for efficient ocean shipping.
A cargo insurance policy can be broadly divided based on the types of coverage and structure of the plan. Out of the policies based on the plan's structure, the most common type is the Marine Open Policy. A marine open policy is also sometimes called a floating policy, and it provides coverage for multiple numbers of transit journeys during the policy term.
Final Words
Shipping is the life force of the global economy. Without marine shipping, international trade, transporting raw materials in bulk, and importing and exporting various goods would not have been possible. With the increase in maritime trade volumes, its efficiency is kept intact due to the advantages this mode offers and the level of safety and sustainable growth it provides to parties involved.
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