OCEAN CARGO Presented by: Maryann Sokolowski February 25, 2009 What is Ocean Cargo? • Simply put – Covers goods being shipped, while in transit overseas and domestically. • LIMITS: – Any One Vessel – Any One Vessel On Deck (Subject to an on-deck BOL) – Any One Aircraft – Any One Domestic Transit – Any One Barge – By Parcel Post Ocean Cargo: The Parties SHIPPER CONSIGNEE • Party who ships the • Party who receives or goods • Control over packing & purchases the goods arranging goods for • Limited control over shipment packing • Usually the product seller • May need documents to or manufacturer release cargo at delivery Common Terms of Sale • Ocean Cargo uses Agreed Value – ACV seldom used because most cargo is brand new, ACV doesn’t reflect costs to destination, and value is always higher at destination • FOB: Free on Board – Title changes when cargo passes over ship’s rail • FAS: Free Along Side – Title changes when ship receives cargo Buyer assumes the interest and risk of loss at the FOB or FAS point. Common Terms of Sale, cont. C&F - Cost & Freight CIF - Cost, Insurance & – Seller arranges for the Freight freight cost, but does – Seller arranges for not provide insurance freight and purchases on Buyer’s behalf. insurance for both the Seller and Buyer. Standard Valuation Formula – Certificate/Special Policy of Insurance [Invoice value] + [pre-paid freight] issued and endorsed + an “advance” over to the Buyer. Total – Certificate allows Buyer to present a • Used in CIF Terms of Sale • Advance ranges from 0% - 25% claim at destination. Commodities & Packing • What is being shipped? • Description of Packing (i.e. cardboard boxes, shrink-wrapped and palletized). • Are the goods containerized? Door-to- door containers? Sealed containers? Imports/Exports Policy covers both Imports and Exports – Need to know annual values shipped – % Import or Export – Countries the goods are shipped to/from – Type of shipment (vessel, air, barge, etc.) – Maximum/average value of shipment – Shipping terms • Warehouse to warehouse • Warehouse to port • Port to warehouse Warehouse to Warehouse Coverage continues in the ordinary course of transit until: 1) Cargo is delivered at the final What is “Ordinary Course of warehouse/destination Transit?” OR 2)15 days after completion of • Transit with all of the usual unloading of the overseas minor delays vessel if the final destination is • Covers incidental warehouse in the port city storage during normal transit situations Provisions exist for extension of coverage due to delays beyond • DOES NOT refer to the insured’s control circumstances where the insured • Notification & payment of intentionally halts the shipment additional premium are for their convenience required Coverage Endorsement Options •Domestic Transportation Coverage •Warehouse Coverage •Exhibition & Processing •Sales Representative Samples •Strikes, Riots, & Civil Commotions •War Risk •Flexible Pricing •Flexible Reporting More Information Potential Customers Key Questions to Ask – Wholesalers – Do you import or – Retailers export any goods or – Manufacturers raw materials? If so, who is responsible for – Contractors goods in transit? – Are any of your products manufactured overseas? If so, who is responsible for goods in transit? – Do you sell any of your product overseas? Final Thoughts • Ocean Cargo coverage can round out accounts for your customer. • Offering this coverage makes you more valuable to the customer by meeting all of their needs. • Keeps other agents out of the picture who are not familiar with the coverage and when it is necessary. QUESTIONS?
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