Human cargo

Human cargo? The phrase itself is wrong isn’t it?

A human being moving from one place to another by any means of conveyance will be called a passenger. Well, a passenger is one, (other than the driver and crew in a public transport)  who moves in a conveyance meant for carrying passengers.

Look at this news item from 2019:

39 people were found dead inside a refrigerated container truck in an industrial park in England. They were Chinese nationals and it is believed they were victims of smuggling gangs specializing in cheap human labor to Western Europe & the US of A in shipping containers by sea and thence by trucks all across Europe or North America. Another possibility was that these were desperate illegal migrants trying to get into western countries and who had paid for their illegal passage to their arrangers.

March 2020:

64 illegal migrants from Ethiopia were found dead due to asphyxiation in a cargo container in Mozambique.

Illegal migrants/refugees trying to get in to western European or Scandinavian nations, US of A and South Africa has been happening over the years and as early as in 2015, it was estimated that unauthorized immigrants in European countries exceeded one million in number. This number has only been rising given the wars, political discrimination, poverty and disease in their own countries. While refugees flee from a country in large numbers for mere survival, some of the illegal immigrants look upon these western nations to improve their  quality of life. Within India too, because of the lock-down, attendant loss in livelihood and in a bid to be among their own people, has led to migration in large numbers from megalopolises and large cities to their native villages cutting across different states, different terrain and over thousands of kilometers.  The biggest challenge they face in this endeavour is transportation. All public transport has been stopped, except for a few special trains run for the benefit of these migrants. So what do they do? They walk, hitch short rides in any available transport or pay exorbitant sums of money to dubious operators who promise them a safe journey but do not deliver always.

Well, the problem of illegal migrants or refugees is a political or economic issue, or a humanitarian crisis, where is the connection with marine cargo insurance, you may wonder. Since transportation is the key for these migrants/refugees, a marine cargo insurer has to understand the ramifications involved. The ‘human cargo’ may well be on a truck/trailer carrying insured cargo, albeit without the knowledge of the assured. A single migrant rarely gets into a cargo-laden truck. Studies in Europe showed that a single intruder is found in only 17% cases. The typical number of unauthorised migrants  in/on  a truck ranged from 2 to 5 and this happened in 42% of the cases. In 22% cases, there were 6 to 10 migrants.

Another analysis made was about the manner in which these migrants get into the trucks carrying cargo. In 72% cases, it was observed that they had got into the truck/trailer without anybody’s knowledge — a break-in. In 11% cases, they had agreed to compensate the driver/crew for illegal transportation ( this percentage could be much higher in India at this point in time) and in 6% cases, as a group they had threatened the driver/crew and obtained entry.

The possibilities of  cargo getting lost/damaged go up manifold with the presence of unauthorized occupants in its midst in the truck/trailer.

1. Occupants trying to create space for themselves, stretching out, etc. may lead to shifting of cargo inside the truck, damaging it.
2. Damage to the outer packing while moving/shifting/adjusting rendering the contents not saleable.
3. People climbing on top of cardboard cartons crushing them and the cargo in the lower portions of the stacks.
4. Removal of dunnage could cause damages to the cargo.
5. Small theft of cargo, especially if it is easily encashable, cannot be ruled out.
6. At the time of entry itself, to create more space, some of the cargo could well be thrown out/off-loaded.
7. The truck with the illegal migrants could be seized by the law enforcing agencies and detention, delays could aggravate losses or lead to new losses.
8. Especially in case of edible items. pharmaceuticals,etc. the discovery of unauthorised persons along with the cargo in transit could lead to a rejection of the entire cargo on grounds of contamination & human safety.

If the insurance policy is issued on an ‘All-Risks’ basis, can any of the above claims be rejected? No, except in case of (8) where one may argue that contamination is to be proved or the policy should carry a Fear of Loss clause. In case of (7) too, as always, the claim would get into a wrangle. Of course, there could be a quick and substantial recovery from the road carrier for negligence or connivance of his staff. This may not hold true in India.Instances of this nature do not fall under any of the named exclusions. Insurers in Europe and the US of A have paid large amounts as claims especially in case of (8) for Constructive Total loss. As losses arising to insured cargo due to human cargo being carried along with it has been common in certain parts of the world for cargo insurers to put in manuscript exclusion for such losses.

In order to avoid any ambiguity or disputes in the event of a claim, markets also provide Unauthorized persons extension under which for any cargo, if the assured feels is unusable because of the presence of unauthorized person(s) along with it, constructive Total loss claim will be payable. Typically this extension is given for cargo of Food & Drinks and the wordings vary ranging from absolute discretion to the assured for rejecting the cargo or showing reasonable evidence as to why the cargo should not be used. Of course, the extension comes at a price.

As of today in India, the migrants issue could well be an issue for marine cargo insurers too.