PROCEDURES still need to be settled before insurers will cover empty vessels picking up cargo from Ukrainian ports, say marine insurance market officials, Reuters reports.
Turkey and the United Nations have brokered a grain-and-fertiliser export cartel agreement between Russia and Ukraine last month.
‘The standard operating procedures for vessels still need to be worked out and there are issues about crewing that still need to be resolved,’ said Neil Roberts, head of marine and aviation with the Lloyd’s Market Association.
‘There is some way to go,’ said Mr Roberts, whose association represents the interests of all underwriting businesses in the Lloyd’s of London insurance market.
Shipping companies and insurers that cover vessels need to be assured that the journey is secure with no threat of mines or attacks to both the ships and their crews. These are typically covered in accepted maritime practices known as standard operating procedures.
The standard operating procedures will be finalised shortly and will then be made public, said UN spokesman Stephane Dujarric.
Turkish, Russian and Ukrainian military officials, working with a UN team, have set up a Joint Coordination Centre (JCC) in Istanbul to enable food and fertiliser to be transported by merchant ships from Odessa, Chornomorsk and Yuzhny – three key Black Sea Ukrainian ports.
Ships going in to collect a cargo will need to be inspected by the JCC at a Turkish port, unlike vessels already in Ukrainian ports that are waiting to leave.
‘The new ships present a different set of logistical challenges and this will take some days. This is something the JCC Istanbul is still wrestling with,’ Mr Roberts said.
The London insurance sector is preparing to cover Ukrainian grain and fertiliser shipments through a secure corridor, voyages that may need up to US$50 million of insurance cover per cargo, industry sources involved said.
London’s marine insurance market has placed the Black Sea region on its high-risk list and insurance costs have soared.
For each voyage, every ship will need separate layers of cover including for the cargo and for the ship itself, known as hull and machinery cover. An additional premium is also charged by underwriters for entering such areas.
