My Song – Reaching for the reputational high notes?
One can only imagine the owner’s visceral shock of seeing the My Song wallowing in distress in the Atlantic after going overboard as deck cargo from the yacht-carrying cargo vessel. Yacht transportation allowing safe repositioning of vessels between seasons is big business. Losing such a high profile yacht is a crisis in any ones books and it is unsurprising that the CEO of Peters & May, the transportation company that was used by the owner, moved quickly to try and curb the reputational damage that he saw coming in waves as large as those buffeting his client’s yacht. It is the trite refrain of all crisis responding companies that you cannot insure your reputation. Indeed his reference to his company’s reputation as “being second to none” points towards this being a substantial reason for his early statement.
The key principle in any media crisis response is to appeal to the stakeholders that can do you the most damage and in the case of Peters & May that must be other yacht owners. It may also explain why they went further to suggest that the investigation is focusing on the yacht’s cradle which was warranted by the yacht’s crew.
Transportation companies like Peter & May contract directly with customers and are responsible for fixing the carrying vessel. There is a recognition in many contracts that yachts unlike other commercial cargoes are not “an ordinary commercial shipment made in the ordinary course of trade” and the terms and conditions often reflect that and bills of lading are often not issued. In any event, deck cargo is not usually subject to the standard Hague-Visby regimes. These often bespoke clauses put the risk of the integrity and suitability of the cradle used to support the yacht, onto the owners themselves and are backed by robust warranties and knock for knock provisions minimizing the transport company’s exposure to any loss.
Peters & May appear to trade on standard British International Freight Association Standard Trading Conditions which provide in part that “…any Transport Unit and/or equipment supplied by the Customer in relation to the performance of any requested service is fit for purpose…”. Much attention in the investigation phase will be on the cradle and fixing arrangements. It is not known if other additional clauses applied. Notwithstanding the liability regime under the contract, the yachts are insured under a typical marine cargo policy on “hook to hook” terms ie from the time the ship’s gear attaches to the straps or bridles until the ship’s gear is released at the final discharge port. This will cover General Average and Salvage charges. It may well exclude losses that arise from the unfitness of the carrying cradle but only where the circumstances of such unfitness are known to the yacht owner.
None of the contractual and insurance set up will be of any comfort to the owner. Like all companies faced with a disastrous and potential existential threat it will be judged as much on the response as the event itself. Communication with the key stakeholders will be key.