Thursday - 17 April 2014

Shipping and Insurance

When it comes to transporting fine art and antiques, there are plenty of shipping companies who offer services specially tailored for the industry. Most offer full packing, storage and international shipping services, while many have now gone a step further and offer bonded warehouse facilities, free from duty and VAT.

From both a dealer's and collector's point of view, this can be a secure and cost-effective way of storing items over a period of time while consolidating a larger consignment for shipping.

However, if you talk to dealers, competitive pricing - provided the service is reliable - still comes top of the list. With margins to consider, that's hardly surprising, but shippers' clients also need to be aware that cutting corners to get a cheap deal may eventually come at a far greater cost.

Mark Dodgson, Secretary General of the British Antique Dealers' Association (BADA), argues that a reliable insurance policy, whether organised directly or through your shipper, needs to be copperbottomed.

It's a concern that his members have raised on more than one occasion, and it's a view echoed by LAPADA, who note that some shippers now allow clients to organise their own insurance. If you do, though, it's essential that your policy meets the shipper's terms and conditions… and vice versa.

A list of shippers can be found on this website (click here), but both associations also publish lists of recommended shippers on their websites, www.lapada.org and www.bada.org.

What makes a Good Shipper?

Technological Advancements

The Export Expert

US Regulations for Sea Freight

Checklist for Transit - the Insurer's View

 

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The photographs used here were provided by Alban Shipping (www.albanshipping.co.uk)

 

What makes a Good Shipper?

"Members find that service levels can vary considerably between shippers and carriers," says Mr Dodgson.

"What may seem like a similar company, with a similar quote, may often provide a very different level of service, usually dependent on the quality of management, and not just on the staff doing the manual labour.

"Shippers with their own offices in popular overseas destinations (such as New York) seem to provide a better service than those shipping to those destinations. This is because there is a named individual with whom the customer can liaise directly when problems arise."

Mr Dodgson and his members also believe that the personality and 'can do' attitude of the staff makes a large difference also in the interface between dealer and shipper.

"Even issues such as how a wrapping service at fairs is operated can be crucial. Some carriers/shippers insist on charging cash to wrap goods at fairs, rather than putting it on account. When a dealer is at a fair it can be very inconvenient to start rummaging around for payment.

"Other shippers with a presence at fairs have been known not to wrap items for dealers, leaving the dealer on their hands and knees with bubblewrap in front of a valued customer."

 

 

Technological Advancements

When it comes to packing and shipping, technology and service has moved on at such a pace over the past few years that it seems our possessions travel more comfortably and securely than we do.

For instance, acid-free tissue, moulded foam and double boxing are just three methods of packing that ensure art and antiques remain damage-free throughout transit.

So what sort of service can one expect these days, whether as a dealer or collector?

Things have moved on quite a bit from the brown paper, string and sealing wax days of hope-for-the-best. And with what many shippers see as a shrinking marketplace, they have had to diversify, developing new services such as high security, climate-controlled, long-term storage.

Some even offer this with 24- hour access for clients who get their own key. Such facilities open up all sorts of opportunities to dealers who trade in several countries and do not want the expense of setting up a gallery in each, but who also do not want to be forever filling out customs paperwork and paying for their stock to be transported from one port to another.

 

 

The Export Expert

Ron Tabor, managing director of Art- Plus shippers (www.art-plus.co.uk) of Palmers Green, London, used to be the manager of the Export Licensing Branch. He believes that one of the biggest stumbling blocks for those considering shipping is incorrect paperwork.

He advises clients to employ a competent professional to complete the paperwork for them, and to ensure that they have checked the following:

■ Current exchange rates and values of items.

■ Regulations for the re-export of items being imported.

■ That there is clear evidence of items being exported, otherwise HMRC may tax them anyway.

■ That your chosen courier company is covered for moving art and antiques. Some of the leading firms are not. Dealer associations BADA and LAPADA offer detailed advice on export terms and conditions via their websites.

In brief, key facts to include the following:

■ There are two values above which a licence is required: that set by the UK and that set by the EU. The UK value applies to exports to another EU state. The lower of either the UK or EU value applies to exports to a state outside the EU.

■ For the most part, objects over 50 years old, valued at £65,000 or more, need an export licence.

■ Certain objects require a licence at lower thresholds. These include, but are not restricted to, photographs and arms and armour.

■ The threshold for paintings in oil or tempera is £180,000.

■ Firearms need additional permissions.

 

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US Regulations for Sea Freight

Richard Edwards of Anglo Pacific International's Fine Art Division (www.anglopacific.co.uk) says that one of the most far-reaching changes recently has been the introduction by the US Government of further security restrictions on sea freight shipments, in the form of US Importer Security Filing 10+2.

"Although this was introduced in January 2009, it was not enforced until 2010, when greater scrutiny was applied and severe penalties imposed for failure to comply," he told ATG.

The minimum fine for breaching regulations is $5000, which is charged to the US import agent. The problem is that the new restrictions add substantially to the burden of paperwork.

"They come in addition to all the usual shipping documents that have always been provided, such as the loading manifest, bill of lading, certificate of origin and so on. For shipments of personal effects, approval must be obtained from US Customs at Felixstowe before the shipment may be loaded."

To do this, clients have to supply the shipper with their passport number or EIN/SSN number and photo identification. Then the shipper also has to supply their own date of birth and nationality, as well as the name, address and telephone contact of the receiving party in the USA.

That's not all. ISF 10+2 also demands the following information for every consignment to the USA:

■ The name and address of the supplier or manufacturer.

■ The seller's name and address.

■ The buyer's name and address.

■ The name and address of the consignee.

■ The name and address of the container loading location.

■ The name and address of the party who loaded the container.

■ The IRS, EIN or SSN numbers for the party who will pay US import duties and taxes.

■ The IRS, EIN or SSN number for the person who will pay shipping charges.

■ The country of manufacture, growth or production of each physical item in the consignment.

■ The US Commodity number for the contents of the consignment.

 

"As you can imagine, this all takes time and adds a huge burden of cost to the administration of even the most straightforward shipment, something that our clients find difficult to understand," says Mr Edwards.

"Some clients are reluctant to provide all the information we have to supply; nevertheless we are obliged to provide this service."

 

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Checklist for Transit - the Insurer's View

The globalisation of the art market and the rise of the internet have made far-flung acquisitions possible. Demand for rapid transportation of objects from city to city, country to country and continent to continent place an emphasis on adequate packing methods and appropriate insurance cover, says Alexander Rich, a director of Richard Thompson Insurance Brokers Ltd (view website here).

Most insurance policies carry general transport conditions requiring objects to be adequately packed so as to "withstand normal handling during transit". Some policies go further, stipulating that "insured property is packed and unpacked for transit by competent packers".

This type of clause doesn't require every item to be packed to the highest professional standards (though insurers would like this), but it does mean insurers will review the method of transport used if a claim is submitted.

The physical protection of an object through adequate packing and sensible labelling is the most important thing that you can do to save time, money and aggravation. Good packing practices can establish your professional reputation. With some objects now being bought speculatively from small 'thumbnail' images, adequate packing not only avoids the huge disappointment of great acquisitions arriving in pieces, but also circumvents disappointed buyers voiding transactions by stating that purchases arrived damaged.

It is far more preferable for a work of art to arrive safely than to have to make a claim under an insurance policy which may have other monetary repercussions through increased premiums or excesses.

The following prudent guidelines should ensure that you meet conditions and avoid insurance claims:

Physically protect objects by adequate packing:

■ Bubble-wrap alone, lined with acid-free tissue, might be sufficient for a hand-carried journey across town, but would not be adequate for international postal dispatches.

■ Place small objects in much larger boxes than needed: there is less chance of a larger package getting lost in transit. Ideally, double-box items with a layer of foam chipping between.

■ Ensure that contents are not vulnerable to cutting when they are unwrapped. In particular, antiquarian books and canvas paintings should be sturdily wrapped to avoid their being slashed by box cutters during the opening process.

■ Always check for damage immediately upon arrival, ideally in front of the delivery service: if this is not possible, write "unchecked" beside the details. It is not good practice to unwrap objects later and notify those at fault weeks afterwards.

Labelling:

■ Make sure that packages are correctly labelled. Double-check addresses and post/zip codes and ensure that they are easy to read.

■ Do not write the value of the goods on a parcel. If it is necessary to state a value for export purposes, ensure that this information is discreetly placed in an envelope on the side of a package.

■ If packages need to be kept upright etc, then ensure that the correct axis is clearly marked.

■ If you are an antiques dealer or sending goods to an antiques shop or jeweller, avoid labels that could emphasise the goods inside.

■ Avoid the risk of 'signed for' packages being taken in by neighbours by stating that they are for named recipients only.

■ If using a courier or the post, use a monitored/tracked service.

Insurance:

■ Make sure you know who is responsible for insurance. If you are not confident about sending goods to a particular area, make sure that all costs go forward and that insurance is the responsibility of the addressee. You do not want damaged items returned if you did everything right.

■ If you are relying on a third party's cover or on the insurance of a shipper and packer, courier or postal service, make certain you have read the Terms & Conditions. They might not cover "unique" items (i.e.works of art), may only pay the cost of the loss or damage (with no "depreciation" cover), or only cover goods for a small amount of 'Standard Drawing Rights' [SDR's] per kilo.

■ If you are using your own policy, make sure that you have sufficient cover. If you are using a courier or postal service, check whether these are appropriate for valuable objects.

■ If you are undertaking a transit yourself, avoid leaving objects in an unattended vehicle. Make certain that you know what the implications are if you do have to do this: many policies have an "Unattended Vehicles Clause" excluding cover or stipulating a limit and requiring a vehicle to be locked and alarmed and items to be kept out of view.

■ If you are hand-carrying objects, make sure that you have arranged transport in advance and make certain that you are able to keep packages with you as hand luggage.