Corona Virus has had a dreadful effect on the way business is conducted. Here we present to you a list of disruptions caused by it and a few recommendations on how we can help combat those.

Corona virus effect

• Global shipping has been hit by the coronavirus. Giant shipping companies such as Maersk, MSC Mediterranean Shipping, Hapag-Lloyd and CMA-CGM have said that they have reduced the number of vessels on routes connecting China and Hong Kong with India, Canada, the United States and West Africa.
• Everything from cars and machinery to apparel and other consumer staples are shipped in containers, and disruption to the industry could reverberate far beyond China as the country seeks to contain the coronavirus outbreak by keeping factories shut and workers at home. The longer the health crisis lasts, the harder it will be to move goods around the world. The coronavirus outbreak has killed more than 560 people and infected at least 28,000 — mainly in China, where close to 60 million people are living in cities on lockdown.
• Already, carmaker Hyundai (HYMTF) has suspended production at its plants in South Korea because of a disruption to the supply of parts caused by the coronavirus outbreak in China, JAGUAR  , a TATA Motors company has reduced production of car due to same reason and may likely close soon. JUST IN TIME IMPACT
• The shutdowns mean that some ships can’t get into Chinese ports, as the loading and discharging of goods slows, said Guy Platten, secretary general of the International Chamber of Shipping, a trade body. Others are stuck in dock, waiting for workers to return to ports so that construction and repairs can be completed. Still more vessels are idling in “floating quarantined zones,” as countries such as Australia and Singapore refuse to allow ships that have called at Chinese ports to enter their own until the crew has been declared virus-free.
• It’s not just shipping that’s been affected. IAG Cargo, the air cargo arm of British Airways parent IAG (ICAGY), on Monday canceled all services to and from mainland China for at least the remainder of the month. German logistics group DHL has reported “severe disruptions to inbound and outbound air cargo shipments, trucking and rail cargo services.”

Issues

• Possible delay in discharge of cargo at the destination port due to disruption in port services
• Possible delay at the port of loading due to delay in arrival of vessel
• Export cargo turning to Shut-out cargo because of cancellation of export orders

Recommendations

• Duration clause under ICC defines the storage period. ICC provides 60 days storage cover at the final destination seaport and 30 days storage cover at the final destination airport. FOB clause provides two weeks storage cover at port of loading.
• Need to review cargo position and should seek necessary extension of duration clause
• Shut out cargo is held covered subject to prompt notice and on terms, conditions and rates to be agreed to by the Underwriters

Along with this we can cover contingent business interruptions caused by this risk and similar risks which are called non property damage loss of profit.

Our Contact Details:

Vaibhav Shah

Mobile – +91 6357097995

email id: Vaibhav.shah@beacon.co.in