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The RMS Titanic went down in icy waters more than a century ago, but the historic event reminds today’s shippers that low risk does not mean no risk.
Catastrophe can strike even the most modern vessels. Adequate insurance is the best way to prepare for unexpected losses.
Just before midnight on April 14, 1912, the Titanic struck an iceberg and sank to the bottom of the Atlantic, taking the lives of nearly 70 percent of the passengers and crew on board. What you may not know is the ship also took with it millions of dollars in mail, packages and cargo, valued at approximately $9.5 million today.
“Catastrophe can strike even the most modern vessels. Adequate insurance is the best way to prepare for unexpected losses.”
Destinations for the goods included high-end stores such as B. Altman & Co., Tiffany & Co. and sporting and leather goods retailer, A.G Spalding & Bro. Built by the White Star Line, the Titanic represented state-of-the-art shipbuilding for the era, so it’s no surprise that faith in her seaworthiness was so absolute. In fact, a White Star Line employee famously proclaimed, “God himself could not sink this ship.”
How many companies today feel confident their cargo and supplies will arrive as planned without incident? How many are prepared in the event of disaster? The story of the Titanic is a fascinating tale of great expectations and risk — a tale of sorrowful lessons learned.
RMS Titanic is short for “Royal Mail Ship Titanic.” This queen of the sea was not just a luxury cruise ship. The ship also carried mail. Among the cargo were 3,500 bags of mail and 750 packages bound for the United States.
Also headed to America was a vast array of goods, including five grand pianos, 1,500 bottles of wine, 800 cigars and 50 cases of toothpaste. From diamond necklaces to marmalade machines and party dresses, every item had value to shippers and recipients.
“The story of the Titanic is a fascinating tale of great expectations and risk — a tale of sorrowful lessons learned.”
The White Star Line insured the Titanic for the equivalent of $133 million in today’s currency. After the accident, cargo insurance policies covered almost all of the property claims totaling $9.42 million. Much like today, insurance companies were able to step in and absorb the losses.
Before there was auto insurance, there was cargo insurance. First class passenger William Carter and his family survived the Titanic disaster, but his automobile, a Renault Type CB Coupe de Ville, went down with the ship.
Today, car owners are required to carry automobile insurance to cover loss and damage, but no such product existed in 1912. Carter filed what was probably the first ever automobile claim for $5,000 against the White Star Line. A reproduction of the vehicle sold at auction in 2003 for $269,500.
Survivors filed insurance claims on everything from the most expensive cargo to everyday belongings. Some of the most famous objects lost at sea included a hand-bound book of poetry inlaid with 1,500 precious gemstones, which took two years to make. Shipped by Sotheby’s auction house to an American buyer, the owners of the masterpiece — by the artist Blondel — filed a claim against the White Star Line for $100,000.
Insurance claims weren’t limited to big ticket items owned by the rich and famous. Other passengers made claims for the loss of clothing, luggage and valuable documents they needed to conduct business or start a new life in America.
Filing claims after the disaster was an emotional but relatively streamlined process. Only two weeks after the incident, insurance had covered almost all claims.
“Bad things can happen to good ships and good cargo. Don’t let bad things happen to you. Take steps to mitigate your risk.”
Compare this with the Costa Concordia disaster nearly 100 years later in 2012 when a cruise ship struck an underwater rock and capsized off the coast of Italy. Although most of the Concordia passengers survived, insurance professionals took much longer to complete estimates.
The Titanic disaster was a perfect storm of unfortunate circumstances that culminated in tragedy — one that leaves us fascinated even now.
Despite many people who thought the ship was infallible, the disaster illustrates that even an “unsinkable” ship can meet catastrophe. Fortunately as a result of the incident, maritime regulations and shipbuilding practices improved.
Ultimately, 24-7 wireless operations became the standard on all ships, and GPS and tracking systems dramatically modernized. However, the legendary Titanic reminds us all that bad things can happen to good ships and good cargo.
Don’t let bad things happen to you. Take steps to mitigate your risk.
This article first appeared on UPS Capital’s blog, The Bottom Line.
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