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Over Dimensional Cargo in Marine Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 12/04/2024
  • 2 min read

The universal fact is- that not all cargo will fit neatly into standard containers. Some shipments are so large or bulky that they require special handling and transportation arrangements. This is what we refer to as "over-dimensional cargo" in marine insurance.

Understanding the nuances of handling such cargo is crucial for ensuring its safe transit across the seas. Insuring oversized cargo introduces a layer of complexity beyond standard shipments due to its distinct characteristics. This insurance type addresses the various risks inherent in transporting goods across seas, encompassing potential damage, loss, or theft.

Read this blog till the end to find out more about over-dimensional cargo meaning, its types and marine insurance policy that deal with over-dimensional cargo.

Understanding Over-Dimensional Cargo: What is Over-Dimensional Cargo

Imagine you are shipping something huge and bulky, like a massive piece of machinery or equipment, across the ocean. That is what over-dimensional cargo means in marine insurance. It is basically cargo that is way bigger or heavier than the standard stuff.

Now, when you are shipping regular-sized cargo, like boxes of clothes or electronics, the insurance covers any damage, loss, or theft that might happen during the journey. But with over-dimensional cargo, things get a bit trickier.

Over-dimensional cargo encompasses shipments that surpass the typical dimensions of standard shipping containers, exceeding in weight, width, length, or height. Hence, it needs special handling and transportation arrangements. It is different than just loading it onto a regular cargo ship and calling it a day. You might need special trucks, cranes, or even custom-built containers to move it safely.

This category encompasses diverse items, from machinery and vehicles to construction equipment and even entire structures. The size and weight of over-dimensional cargo vary significantly, with some items weighing several hundred tonnes and stretching over 100 metres in length.

And because it is such a big deal, ODC cargo meaning it is more complicated than ensuring regular stuff. There are extra risks involved because of the size, weight, and shape of the cargo. So, marine insurance for over-dimensional cargo has to take all these unique challenges into account.

Types of Over-Dimensional Cargo

Large Components and Structures

Massive structures and components, like prefabricated buildings, sections of bridges, and modules for industrial plants, constitute another segment of over-dimensional cargo. Given their size and weight, these structures typically necessitate transportation using specialised trailers or barges.

The management and coordination of such large structures entail meticulous planning, route evaluations, and collaboration with authorities to guarantee the cargo's safe and prompt transportation. Proficiency in securing and safeguarding these structures during transit is vital to avert damage and uphold their integrity upon reaching the destination.

Heavy Machinery and Equipment

Large-scale machinery and equipment are frequently categorised as over-dimensional cargo owing to their substantial size, weight, and non-standard dimensions. Examples encompass cranes, excavators, mining gear, and industrial transformers. Transporting these colossal equipment pieces typically mandates disassembly and the utilisation of specialised trailers.

The transportation of heavy machinery presents several hurdles, including acquiring permits and adhering to road and weight constraints. The logistical intricacies of dismantling, transporting, and reassembling such machinery necessitate expertise and specialised handling techniques.

Offshore and Energy Equipment

Equipment for offshore and energy ventures, encompassing wind turbines, components for oil rigs, and modules for power plants, often qualifies as over-dimensional cargo. These items are distinguished by their sizable dimensions, substantial weight, and specialised needs for safe transit.

The transportation of offshore and energy equipment entails intricate logistics, given the engagement of various transportation modes, including land, sea, and occasionally air. Guaranteeing adequate packaging, securing the cargo throughout transit, and adhering to safety regulations are imperative for the transportation of such equipment.

Challenges and Risks

Transporting over-dimensional cargo presents numerous complexities and challenges, with risks encompassing potential damage during loading, unloading, and transit. Furthermore, such cargo can disrupt traffic flow and pose logistical hurdles.

Another significant risk involves accidents, given the cumbersome nature of these items and the need for specialised equipment and skilled operators. Accidents involving over-dimensional cargo can result in extensive property damage, along with injuries or fatalities.

To mitigate these risks, investing in a reliable marine insurance policy is advised. Marine insurance offers protection against liability claims, which includes scenarios such as cargo damage, personal injury, and natural calamities.

Specifics of OCG in Marine Insurance Policy

Premium Calculation: The premium calculation for over-dimensional cargo insurance involves assessing cargo value, transportation method, route, and risk level. Factors such as packaging quality and security measures impact premium, along with the insured's chosen deductible amount.

Risk Assessment: Insuring over-dimensional cargo requires a detailed risk assessment by the insurer, considering factors like cargo nature, transportation mode, route, and distance. The evaluation also includes cargo value, packaging, and security measures.

Coverage Exclusions and Limitations: Coverage for over-dimensional cargo may have limitations and exclusions, such as restricted coverage for certain cargo types or excluded risks like war or terrorism damages. Additional coverage or security measures may be necessary to address gaps in coverage, necessitating close collaboration with the insurer for comprehensive risk management.

Process to Claim Over-Dimensional Cargo in Marine Insurance

If over-dimensional cargo incurs damage or loss, the insured entity is required to submit a claim to its marine insurance provider. Below are detailed steps for the same:

Step 01: Collect details about the damaged or lost cargo, including type, value, cause of damage, and relevant documentation.

Step 02: File the claim with the marine insurance provider as soon as possible to avoid delays.

Step 03: Be ready to supply any extra information or documents requested by the insurer promptly.

Step 04: The insurer will investigate the claim to determine the cause and extent of damage or loss.

Step 05: Based on the investigation, the insurer will decide the compensation amount covering repair or replacement costs and related expenses.

Step 06: Ensure timely and fair compensation for losses and seek legal advice or mediation if disputes arise.

Risk Management and Safety Protocols

Implementing effective loss prevention strategies and implementing safety protocols is crucial in mitigating risks associated with over-dimensional cargo in marine insurance.

Loss Prevention and Risks Management

Packaging: Over-dimensional cargo requires sturdy packaging to endure the transportation process. Packaging should be resilient enough to shield the cargo from damage caused by vibration, impact, and other hazards.

Cargo Stowage: Ensuring proper stowage and securing of cargo is vital to prevent shifting or falling during transit. Utilising suitable lashings, dunnage, and securing devices is essential for cargo stability.

Handling: Vigilant handling practices during loading and unloading are imperative to prevent damage. Employing appropriate lifting equipment, such as cranes and forklifts, helps minimise the risk of cargo damage.

Safety and Security Protocols

Qualified Personnel: Utilising qualified personnel, such as cargo surveyors and riggers, to oversee the loading and unloading process of over-dimensional cargo is crucial. Their expertise helps ensure safe and secure handling of the cargo.

Regulatory Compliance: Adhering to pertinent regulations and guidelines governing the transportation of over-dimensional cargo is essential. This encompasses obtaining requisite permits and approvals and adhering to weight and size restrictions.

Insurance Coverage: Obtaining adequate insurance coverage is imperative to safeguard against the risk of loss or damage to the cargo. This entails securing marine cargo insurance and liability insurance to cover potential damages or injuries during transit.

Conclusion

Effective risk management strategies are paramount in mitigating the risks associated with over-dimensional cargo in marine insurance. By implementing robust loss prevention measures and safety protocols, cargo owners and shippers can significantly reduce the likelihood of loss and ensure the secure transportation of their cargo.

Tata AIG’s global presence ensures localised expertise to address regulatory concerns effectively. From the Sales Turnover Policy to the Marine Open Policy, our solutions are tailored to meet the unique needs of every client.

To conclude, handling over-dimensional cargo India necessitates a comprehensive understanding of the challenges and risks involved. By acknowledging the various types of oversized shipments, addressing the intricacies of claims processing, and emphasising risk management and safety protocols, stakeholders can navigate the transportation of such cargo with enhanced confidence and efficiency.

FAQS

What is out-of-dimension cargo?

Out-of-dimension cargo refers to goods that exceed the standard dimensions allowed for transportation on roads or other modes of transport. These may include items that are unusually large, long, wide, or heavy, requiring special handling and transport arrangements due to their size or shape.

What is over-dimensional cargo in GST?

Over-dimensional cargo in GST refers to goods that surpass the standard dimensions specified for transportation. Under the Goods and Services Tax (GST) regime, over-dimensional cargo is subject to specific regulations and may incur additional taxes or charges due to its size or weight.

What is the ODC cargo limit?

ODC cargo limit refers to the maximum dimensions or weight allowed for transporting over-dimensional cargo. The Indian government has established specific criteria for determining the limits for Over-Dimensional Cargo (ODC). The criteria are outlined as follows:

Length: 20/40 feet or beyond the platform boundary

Width: Exceeding 8 feet

Height: Above 11 feet from the ground level

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Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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