hen it comes to project cargo, owners and freight operators are best advised to be aware of the full spectrum of risk they are taking on. This is according to Susan Duvenage, divisional director marine, Prestmarine, a division of Prestgroup, who says it is essential to make sure whom one is dealing with – whether it’s a buyer, seller or service provider.“Project cargo, by its very nature, carries a lot of risks, but cargo owners and operators must understand the full spectrum of that risk as it can have severe consequences. One of the biggest challenges we are experiencing is an increase in contractual risk being placed on freight operators. Often our clients, who represent a huge part of the freight forwarding industry, find themselves in a position where their standard trading conditions are rejected and the risk of loss and damages is transferred to them regardless of negligence or fault.”Whilst the freight operator may insure the cargo against physical loss and damage under a marine or goods in transit policy, margins are tight, leaving very little room for the additional expense of insurance premiums. In addition, says Duvenage, they are exposed to consequential losses and find it difficult to obtain legal liability insurance where the contractual exposure is not negligence-based and no cap placed on potential liability amounts.“Another challenge is cargo movements to and from countries that prohibit insurance being arranged through an insurer not authorised to operate in that country. Often cargo owners are unaware of the legislation and find themselves in a position where cargo is already packed and ready to be exported, but insurance cannot be obtained through a local insurer of their choice due to the insurance legislation applicable to the destination country.”The opportunities for project cargo remain high in South Africa thanks to the mining sector, says Duvenage.“The wide spectrum of equipment and consumables that are sourced locally and moved to sites, as well as the mined products moved southbound for exports through South African ports, offer great opportunities for project cargo. We have, however, not seen a significant increase in volumes over the past 18 months and attribute this to the effect of Covid-19 as well as slow economic growth in Africa.”Prestmarine, which has just celebrated its 35th anniversary, has expanded its products over the years to offer cover against the different risks associated with project cargo. Depending on the nature of the project, the parties involved could be affected by physical loss or damage to the cargo whilst in transit to the project site, as well as consequential expenses such as fines, penalties and delay in start-up.“Under the Prestgroup umbrella we offer insurance against loss or damage to property as well as a third party, and legal liabilities, bonds and guarantees as well as insurance,” says Duvenage.One of the biggest challenges we are experiencing is an increase in contractual risk being placed on freight operators.– Susan Duvenage
