Target’s Insurers Sue Maersk for $5.8 Million for Containers Lost Overboard
Giant retailer Target Corporation’s insurer has filed suit against Maersk for compensation for containers lost overboard in a 2021 incident. Starr Indemnity & Liability Company acting as the subrogee of Target filed suit in the Southern District of New York on October 19 seeking more than $5.8 million.
The suit stems from an incident aboard the Maersk Eidenoven containership (13,100 TEU) which happened on February 17, 2021, while the vessel was sailing approximately 45 nautical miles off the coast of Northern Japan. Maersk reported at the time that the vessel experienced an engine stop in heavy seas causing the ship to be unable to maneuver and experience a severe roll. They later determined that the engines on the 11-year-old ship shut down when an indicator recorded low engine oil pressure triggering a safety feature.
Propulsion power was quickly restored on the vessel, but it returned to Japan. While in Yokohama, they discharged 65 damaged containers and inspected the bays. The survey showed that the vessel had lost 260 containers in the ocean east of Japan. Maersk said however that there was only minor damage to the vessel and all the required welding and repairs could be completed in Yokohama. The vessel resumed its voyage to Los Angeles at the beginning of March.
The lawsuit states that between January 12 and February 4, cargo was delivered to the ports of Phnom Penh, Cambodia and Yaintan, Chia for transport aboard the Maersk Eidenhoven to California. They believe that a total of approximately 57 containers were delivered to Maersk containing various consumer goods.
When the Maersk Eidenhoven reached its port of discharge, the suit says Maersk failed to discharge the containers and deliver the cargo in good order. They believe the entire cargo was lost overboard with the suit alleging negligence or breach of duty by the defendants, Maersk and the Maersk Eidenhoven.
The suit values the cargo at just over $5.8 million, but reports they have not been paid for the cargo. The insurer reserves the right to increase the value of loss while also seeking a judgment against Maersk and the vessel. Further, they are asking the court to arrest the vessel and order it to be sold to satisfy the judgment.
While the case will likely be resolved by Maersk and its insurers, it highlights the continued challenges for the industry over the loss of containers. The years 2020 and 2021 were especially bad for the industry with large casualties mostly related to weather. Nearly 4,000 boxes went overboard in 2020 and a further 2,000 in 2021, according to data from the World Shipping Council. The industry has focused on how large vessels handle in bad seas as one step toward reducing container losses. Multiple companies are also working on devices or systems to better secure containers while they are in the racks and reduce movement in bad weather conditions.
The World Shipping Council reported losses had been dramatically reduced to just over 660 boxes in 2022. There are however efforts underway at the IMO to increase the monitoring and reporting of container losses.
Top photo by Alf van Beem of Maersk Eindhoven in 2017 (public domain)