Shipments to Afghanistan

A stray loss can often make your book of business adverse! It is useful to know the challenges to marine underwriters when dealing with shipments to some difficult terrain.

Afghanistan is a land locked country. The key point is the route- the leg from the Irano-Afghan border to Kabul. In 2005, I had gathered some information on this leg  of transit  but reliable info on whether the situation has improved is hard to come by.

1.Road conditions from Bandar Abbas to the border crossing (Iran station: Dogharun / Afghan Sation: Eslam Qal’eh) are good . In Afghanistan the conditions are quite the opposite. They are reported to be very poor indeed. No wonder decades of civil strife means  potholes or unsafe side-embankments are not the priority areas for improvement! Moreover, the Iranian vehicles generally are in a reasonably well maintained condition, whereas the Afghan trucks, which take over at the border, seem to be “ancient” Russian models.

2. Even though the goods may be in containers, it is a must that manufacturer-packed items (well wrapped in Styropor or kraft-paper as may be suitable and then in cardboard boxes) are being well crated/boxed by wooden enclosures (preferably plywood and somewhat more rigid than a tea-chest). This is very important! Any savings on the mode of packing will definitely result in some sort of disaster!

3.In addition the type of goods concerned here must be shipped in well repaired “ONE WAY” container(s) to make sure the goods themselves are not being handled at any stage in transit.

3. a) Containersed goods may well be destuffed at the border, because the container-lessor (ocean carrier) wants to see his container again and will not allow a lease upto Kabul. Therefore a one-way  “one-way” containers should be used (but well repaired) and forwarders ought to bear in mind not to ship the goods in 40’ units!

3b) After the goods clear the Customs' area in Bandar Abbas port and crosses haulage the border, there is a  “free for all” environment. In this connection also bear in mind that you will have no one in Afghanistan  to look after your interest in case if a loss event.

I wonder how would courts view evidence coming out of today’s Afghanistan.

Do write to me if you have experience in shipments to Afghanistan. Are there any good survey agents in Kabul? If Surveyors have to be sent from a neighbouring country, the cost of claim would substantially go up. The insurer would then like to waive surveys for "smaller" claims which sometimes could be counter-productive!

Charges and Expenses (Extra Charges) in Marine Cargo Insurance

The Institute Cargo Clauses provides as under:

This insurance covers all risks of loss of or damage to the subject-matter insured except as provided in Clauses 4, 5, 6 and 7 below.

You will note that there is no mention of expenses or charges-ICC only refers to loss or damage.  Thus, barring certain expenses in the nature of General Average, sue & labour and Forwarding Charges, Institute Clauses do not necessarily provide for a reimbursement of expense/charges.   Therefore considerable care needs to be taken when presented with a claim towards certain charges or expenses incurred.

What then is the practice in marine insurance in respect of expenses/charges?

As far as marine insurance is concerned, cost of proving a claim is admissible if the claim itself is found to be admissible.  These are typically survey fee and sale charges which are added to the claim amount.  These are called Extra Charges.

Extracts from Rules of Practice of the Association of Average Adjusters (UK) 1997 [Amended 2008]

[1] provides as under:

A9: Franchise Charges

The expense of protest, survey, and other proofs of loss, including the commission or other expenses of a sale by auction, are not admitted to make up the percentage of a claim; and are only paid by the underwriters in case the loss amounts to a claim without them.