The release of four ships that were trapped in Ukraine’s Black Sea ports looks like substantially easing war-related losses on the marine market.
The final claims bill on war risk underwriters under blocking and trapping clauses now looks set to fall well below half the initial $900m-plus valuation of ships trapped in Ukrainian ports at the outset of the conflict in February 2022.
The most recent releases happened along a safe corridor arranged by Ukraine, and involved two of the most valuable ships caught up in the war.
Although the insured values are undeclared, the 9,403-teu Joseph Schulte (built 2013) had a market value of $147m when the war broke out and it became trapped in the port of Odesa. The 177,000-dwt capesize Ocean Courtesy (built 2008) was valued at $22m.
Both ships were among those that have sailed free over the past few weeks.
Almost all the ships trapped in the ports of Chornomorsk, Yuzhny and Odesa have now escaped either through the now-defunct Black Sea Grain Initiative or in the latest series of releases.
Among those remaining is the 73,300-dwt Emmakris III (built 2000) at Chornomorsk. It is listed as controlled by Russian outfit Linter LLC and seems an unlikely candidate for release.
The 10,100-dwt Comet (built 1997) and 35,000-dwt Puma (built 2017) are still in Odesa.
Underwriters may have already paid out after a 12-month period for those ships that recently sailed free.
But most settlements involved only a partial payout for ships if there was a reasonable chance of making it out of the Ukraine in the future.
In these circumstances, the owner maintained control of the ship, rather than handing it over as a constructive total loss to underwriters.
Underwriters have also benefited from high insurance premiums for the duration of the period of entrapment, which would have helped compensate for the losses.
The main losses for mainstream commercial ships are around the port of Mykolaiv to the east, which, given the proximity to Russian-occupied territory, are unlikely to be able to sail free any time soon.
Safe corridor
Ukraine is proposing that ships may be able to use its safe maritime corridor to load grain for export in Odesa, and broker Marsh is trying to arrange insurance cover in the London market.
Insurance sources told TradeWinds that some shipowners have sounded out the market on war risk cover to pick up grain. However, owners and underwriters are wary of entering the trade if there is any danger to the ship or crew.
A key issue for underwriters will be whether they would be prepared to take on trapping and blocking clauses for ships entering the trade, given the high risk that they could again be unable to leave Ukrainian ports.
