Wood packaging material (WPM) such as pallets, crates and dunnage is a common part of cargo shipments and is subject to strict phytosanitary controls under International Standard for Phytosanitary Measures (ISPM) 15. For marine cargo insurers, non-compliance can have consequences beyond the packaging itself. Importing countries may detain, destroy or return non-compliant WPM regardless of whether the cargo it protects is damaged. The resulting exposure typically arises from operational and financial disruption, including detention, emergency fumigation or re-treatment, repacking, destruction of packaging, delays and potential contractual penalties.
Responsibility for compliant WPM rests primarily with the party packing and shipping the consignment. However, the treatment and marking chain often involves several independent suppliers, making responsibility more difficult to establish when problems arise.
A working group led by IUMI’s Loss Prevention Committee has published a new guidance paper which explains the regulatory background and highlights the loss prevention and claims implications of ISPM 15 non-compliance. It also provides practical measures that marine cargo insurers and their assureds can take to reduce the likelihood and severity of these incidents. They show that relatively simple preventive steps can help avoid costly disruption.
A short briefing paper as well as the full guidance document are available here
