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The World Shipping Council (“WSC”) recently released its Containers Lost at Sea Report 2025 compiling global data on cargo lost at sea from the previous year and promoting loss prevention recommendations for the maritime industry and governing organizations. One particular highlight from the report is that despite a steady reduction in container losses at sea over the past decade, this past year’s data showed a spike in container losses increasing from 355 documented in the WSC’s 2024 report to 576 containers in this year’s report. This spike is part of a three-year trend where armed conflict in the Middle East resulted in missile attacks, drone strikes and armed groups boarding and capturing vessels sailing along major trade routes in the Red Sea. To avoid the risk of facing these catastrophes, vessels have been increasingly rerouting voyages and charting courses around the Cape of Good Hope, off the coast of South Africa, instead of the (normally) faster route through the Suez Canal. While vessels sailing around the Cape of Good Hope avoid the perils of warfare, they are subject to natural perils of the sea that accompany the collision of currents where oceans meet. While developments in shipping technology and safety procedures have reduced the risk to vessels sailing through this historically treacherous route, the unsteady seas around the Cape still pose significant risk of cargo loss. According to the WSC, Transit around the Cape of Good Hope increased 191% in 2024 alone. With this increase of marine traffic, the South African Maritime Safety Authority reported that around 200 containers, 35% of the container losses enumerated in the report, were lost in South African waters. As conflict in the Middle East persists and the Red Sea trade routes are disrupted, this trend of increasing container losses from cargo vessels rounding the Cape of Good Hope is likely to continue.
While the Carriage of Goods by Sea Act (“COGSA”), which governs the transport of cargo from foreign countries to US ports, provides vessel owners a defense for cargo loss caused by perils of the sea, shippers may succeed on their cargo claims when there is evidence of negligence on the part of the vessel, or when the vessel is in an unseaworthy condition. One of the purposes of this note is to highlight what information all involved parties should have to streamline the claims process and resolution of disputes.
WSC’s report notes that the 576 lost containers account for 0.0002% of the 250 million containers transported by sea this past year. While the percentage is miniscule in scale, the trend is set to increase, giving way to more cargo losses and more shippers facing the frustrations of handling, and potentially litigating, cargo claims. While the process is tedious and potentially costly, there are steps that all parties can take to efficiently process claims:
Documentation: To avoid back-and-forth arguing over a package quantum, shippers are urged to document how they have packed their cargo and stuffed their containers. Shippers should also document the condition of their containerized cargo before the container is sealed. If a lost container is salvaged and the shipper has the opportunity to conduct a survey, every effort should be made to complete this process to ensure documentation of possible damage. Conversely, carriers should also make any effort to document how the cargo is stored and packaged.
KYC – Know Your Customer: Recently, carriers’ bills of lading have included clauses that effectively stipulate a definition of “package” for COGSA claim purposes. This arguably allows carriers to limit liability according to their definition. Shippers should be aware of these provisions and incorporate them into their own packing procedures. Shippers are also advised that an NVOCC or freight forwarder may be able to bind the shipper to the terms of a carrier’s bill of lading. In these situations, shippers will have to recover damages from the NVOCC or freight forwarder that were not recovered from the carrier because of such a provision. Shippers should advise their NVOCCs and freight forwarders what constitutes an acceptable package definition when arranging carriage for their goods. Carriers should also be aware that shippers are likely taking these measures and apply that knowledge in their own practices to potentially mitigate losses arising from an incident impacting the cargo. For example, carriers could discuss these issues with their insurance carriers and/or brokers.
Communication: Swift and effective communication and provision of documents is key to processing claims and avoiding COGSA’s time bar to claims not filed within 12 months of the cargo’s expected delivery date. Shippers can also communicate with carriers to agree to extend the time in which the shipper may file a COGSA claim in cases where a large number of containers are lost and collection of documents requires extensive time and effort. Carriers are often agreeable to this course of action to avoid costly litigation. In subrogation cases, communication up the chain of shippers and cargo owners should occur early to ensure the prompt collection of relevant shipping documents like bills of lading, packing lists and commercial invoices, as well as documentation to support claims for actual damages, such as survey reports, emails, correspondence, receipts documenting sales price and sales contracts.
Record Keeping: Cargo owners and shippers alike should maintain robust record keeping practices in the event a container is lost and a claim is necessary. Having all of the relevant shipping documents, and additional supporting documents, will streamline the claims process and minimize the potential need for litigation. Similarly, carriers should ensure that all documents from loading to discharge, and any pre-loading or post-discharge surveys or inspections, are well documented.
For attorneys representing clients in the shipping industry, preemptive discussions with clients on the topics noted herein are important. A well-informed client with properly implemented business practices ensures legal counsel are better equipped to deal with issues faced during litigation, promoting a greater likelihood of client-friendly outcomes at a fraction of the cost. In-house counsel in the shipping industry, both carrier side and cargo side, should be apprised of their company’s practices and policies for shipping and continue emphasizing the importance of documenting and keeping records. They should also continue careful review of contracts and bills of lading for changes in terms, like package definitions, that may ultimately impact liability for cargo lost overboard.
As the data indicate a continuing trend of increased container loss as more vessels reroute through the Cape of Good Hope, taking these extra steps will help ensure all involved parties are better equipped to resolve cargo claims in a more efficient and less costly manner.
Shipping and international trade
United States