{"id":4621,"date":"2026-05-17T19:58:20","date_gmt":"2026-05-17T19:58:20","guid":{"rendered":"https:\/\/www.insuracarelife.com\/blog\/logistics-bite-size-insights-may-2026-kennedys\/"},"modified":"2026-05-17T19:58:20","modified_gmt":"2026-05-17T19:58:20","slug":"logistics-bite-size-insights-may-2026-kennedys","status":"publish","type":"post","link":"https:\/\/www.insuracarelife.com\/blog\/logistics-bite-size-insights-may-2026-kennedys\/","title":{"rendered":"Logistics: Bite-Size Insights – May 2026 | Kennedys"},"content":{"rendered":"
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In this edition of Logistics: Bite-Size Insights, we consider the data behind the latest global supply chain disruption trends, explore the changing face of theft of goods in transit, and discuss the importance of affirmation in insurance contracts.<\/strong><\/p>\n

Global supply chain disruption: the data behind the trends<\/h2>\n

Emerging data points to a structural, rather than temporary, disruption for businesses. While official statistics confirm the scale through declining trade flows, rising costs and increased business concern, real time market indicators suggest the operational impact is already more acute – manifesting in extended transit times, higher insurance costs and growing claims exposure.<\/p>\n

For insurers and insureds alike, the key risk is not any single point failure, but the cumulative effect of delay, rerouting and cost inflation across the supply chain. In that context, coverage responses, contractual protections and risk allocation mechanisms will come under increasing scrutiny as losses begin to crystallise.<\/p>\n

The disruption caused by the conflict in the Middle East is increasingly reflected in both market data and official economic indicators. We recently reported on the disruption to the supply chain which can be read here. We consider, below, the data behind the issues raised in that article.<\/p>\n

Ports and routing<\/h3>\n

Strategic chokepoints have been materially affected. Commercial traffic through the Strait of Hormuz has reduced sharply, and wider Red Sea disruption continues to reshape global routes. UN data shows that transits through the Suez and Panama canals have fallen by over 40%, with large-scale rerouting around Africa . At the operational level, congestion has intensified at alternative hubs, with waiting times at ports such as Jeddah rising to around 36 hours.<\/p>\n

Costs<\/h3>\n

Freight and energy costs have risen sharply. Oil price movements of approximately 8 to 10% have fed directly into logistics costs, \u00a0alongside emergency surcharges of US$2,000 to US$4,000 per container. \u00a0More broadly, supply chain disruption events can increase \u201ccost to serve\u201d by around 40%. Insurance premiums have also escalated significantly, in some cases increasing multiple fold.<\/p>\n

Delays<\/h3>\n

Transit times between Asia and Europe have lengthened materially. Diversions around the Cape of Good Hope are adding approximately 10 to 14 days, equating to around a 30% increase in voyage duration.<\/p>\n

Insurance claims<\/h3>\n

While granular global loss data remains limited, early indicators show a rise in marine claims frequency and complexity, including cargo damage, deviation costs and delay related losses. Data published on 7 May notes that in late April 2026, 38% of businesses with 10 or more employees reported that they were concerned about international conflict impacting supply chains over the next year.<\/p>\n

Cargo losses<\/h3>\n

Direct cargo losses have been reported following vessel strikes and explosions, although the wider impact remains indirect – manifesting in spoilage risk, mis-delivery and delay driven deterioration rather than large scale aggregate loss figures.<\/p>\n

Key statistics (at a glance)<\/h3>\n
    \n
  • 36 hours:<\/strong> Port waiting times at rerouting hubs (e.g. Jeddah) have increased to around 36 hours..<\/li>\n
  • US$2,000 \u2013 US$4,000:<\/strong> Emergency conflict surcharges per container, with freight indices having more than doubled in parallel.\u00a0<\/li>\n
  • +10\u201314 days:\u00a0<\/strong>Additional transit time on diverted routes, with UK data indicating delays of several weeks in practice.\u00a0<\/li>\n
  • 44% \/ 39%:<\/strong> According to the ONS, UK importers and exporters reporting increased trading costs.<\/li>\n
  • 9% \/ 46%: <\/strong>According to the ONS, UK businesses experiencing supply chain disruption, with nearly half attributing it to Middle East conflict.<\/li>\n<\/ul>\n

    Author: <\/strong>Shaan Burton<\/p>\n

    Related item:<\/strong> Middle East crisis: impacts on the supply chain<\/span><\/p>\n

    The changing face of theft of goods in transit<\/span><\/h2>\n

    Goods have always been vulnerable to theft whilst in the supply chain. Theft by deception has been a common problem with ports, forwarders and warehouses persuaded to hand over goods by the production of fake paperwork and drivers in unmarked tractor units approaching security cameras with a baseball cap tipped to cover the face. The London Shuffle (diverting drivers using little more than a fluorescent jacket and a clip board) gave rise to a great many losses. Identifying where the information leaked to the criminals is difficult but there is often some element of human error perhaps in checking papers) which can be established.<\/span><\/p>\n

    Whilst theft by deception remains firmly on the radar, the way in which such deception is commissioned has developed dramatically as technology provides the cargo owners, the forwarders and the thieves with increasing opportunities.<\/span><\/p>\n

    Insurance considerations in goods theft<\/span><\/h3>\n

    One of the big questions is whether such thefts are covered under insurance policies. <\/span><\/p>\n

    For example, where fraudulent suppliers or buyers steal the goods, the issue can be difficult from an insurance perspective. The goods are usually collected, carried and delivered to the intended destination without any apparent loss or damage. Has there been any loss during the insured carriage?<\/span><\/p>\n

    Whilst there has been a theft of goods, there is certainly a very credible argument that the appropriation required for the theft occurred during the course of the transit \u2013 the goods were appropriated either on handing over to the carrier or upon delivery.<\/span><\/p>\n

    Freight liability insurers also have difficult questions to address. The carrier will, of course, argue that it delivered the goods in accordance with the customer\u2019s instructions. The cargo owner will criticise the carrier for its failure to appreciate that it was not handing over the goods to the correct consignee.<\/span><\/p>\n

    Liability challenges<\/span><\/h3>\n

    Aside from insurance considerations, there is also the question as to whether the act of handing over the goods to fraudulent hauliers could, for example, be deemed to be wilful misconduct on the CMR. Hauliers may, in those circumstances, argue that they are an agent only and do not come within the CMR. However, as an agent a haulier still has the duty to exercise due skill and care in appointing the haulier.<\/span><\/p>\n

    The agent has a number of duties to protect the position of their principal if and when a loss occurs. For example, if the agent holds all the relevant information concerning the identity of a haulier, the agent may be obliged to send notices of loss and hold the relevant parties liable within the relevant time periods.<\/span><\/p>\n

    It must also be remembered that the forwarder\u2019s agency services will not be subject to the limits and terms imposed by the international conventions. Therefore, is arguing an agency role really the answer\u2026?<\/span><\/p>\n

    Authors:<\/strong> Shaan Burton and Chris Chatfield<\/span><\/p>\n

    Affirmation in insurance contracts<\/span><\/h2>\n

    First, what is affirmation and why does it matter? The concept of affirming a contract is not peculiar to insurance law. It applies generally in contract law. It is, however, extremely important in insurance law due to the right of insurers to treat a contract as avoided in the event of a material non-disclosure.<\/span><\/p>\n

    It is not uncommon for reservation of rights to be issued whilst insurers carry out investigations into a claim. This is particularly common for cargo claims where there has been a number of hauliers and logistics providers involved, as establishing which party may be responsible for which losses is often not obvious at the outset.<\/span><\/p>\n

    Insurers will often be advised \u201cdo not affirm the policy<\/em>\u201d and, quite rightly, the comment is often surrounded in confusion and mystery. In simple terms, if insurers affirm the insurance contract, they can lose their right to treat the contract as avoided.<\/span><\/p>\n

    This was a particular problem under the law preceding the Insurance Act 2015. The only remedy available to insurers for material non-disclosure under the Marine Insurance Act 1906 was avoidance. As such, insurers could, by affirming the contract, lose their only available remedy. The Insurance Act 2015 introduces several other remedies which may survive affirmation of the contract.<\/span><\/p>\n

    So what amounts to affirmation?<\/span><\/h3>\n

    Insurers are entitled to ask certain questions to investigate and clarify the position. They would be wise to reserve their position whilst carrying out such investigations. However, here is a word of caution. Reserving the position generally whilst investigations are carried out is sensible. Reserving the position under the policy, or reserving the right to rely on rights or defences under the policy may be an affirmation \u2013 how can an insurer rely on policy terms unless the contract is in force?<\/span><\/p>\n

    Insurers need to be careful that they do not affirm cover by their own acts. For example, acceptance of premium, taking steps to defend under the policy or exercising any rights under the policy.<\/span><\/p>\n

    A friendly reminder to word any reservation of rights carefully\u2026<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    In this edition of Logistics: Bite-Size Insights, we consider the data behind the latest global supply chain disruption trends, explore the changing face of theft of goods in transit, and discuss the importance of affirmation in insurance contracts. Global supply chain disruption: the data behind the trends Emerging data points to a structural, rather than […]<\/p>\n","protected":false},"author":1,"featured_media":4622,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3470,230,3471,3469],"class_list":["post-4621","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-bitesize","tag-insights","tag-kennedys","tag-logistics"],"_links":{"self":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/4621","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/comments?post=4621"}],"version-history":[{"count":0,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/posts\/4621\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media\/4622"}],"wp:attachment":[{"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/media?parent=4621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/categories?post=4621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insuracarelife.com\/blog\/wp-json\/wp\/v2\/tags?post=4621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}