Beirut's Explosion


The latest in the world of insurance



   Posted 2020-08-20

With at least 150 dead and over 4,000i injured this was a major incident by any standards and leaves a huge scar on the city of Beirut.   Whilst details are still emerging but we know the explosion occurred within the port area and caused significant damage within a 10km radius. The explosion could be heard from Cyprus.

The cause of the explosion is believed to have originated from a fire which spread to a storage facility which contained ammonium nitrate. Apparently 2,750 tonnes of this highly explosive material was seized from a ship in 2014 and stored in a warehouse without any protective measures. 

The majority of the port has now been destroyed, including all offices of major shipping lines, and of course cargo within this vicinity would either be destroyed or unretrievable for the foreseeable future.

So what is this going to mean for Forwarders?

There will be multiple issues but due to the port of Beirut being out of operation, the immediate problem is that carriers will terminate the voyage at one of the neighbouring ports. 

Can Carriers legally do this?

They can and they are allowed this do this without any extra cost or risk to themselves.  Most carriers express this within their terms and conditions under a termination of voyage clause on their bill of lading.

Can the Merchant demand his freight returned because the voyage was not fulfilled?

No, all freight is earned as soon as it sails the freight is earned. Freight must be paid or collected.

Client has cargo insurance and would they cover these extra shipping charges?
Check with your insurance provider but some cargo policies include a Forwarding Expense Clause which could cover these charges.

Client is insisting the forwarder covers these charges 

This will clearly have a negative impact on client relations but the forwarder should be able to rely on the same defenses as the master carrier. Check your terms and conditions.  Any claim for additional costs should be referred to your liability insurers immediately so they can defend you

As the matter develops, we will keep you posted from updates by local representatives in the area.

If you have any cargo within the port or rerouted, you must notify your cargo and/or liability insurers immediately.