The International Union of Marine Insurance (IUMI) has published new guidance highlighting an often-overlooked risk for marine cargo insurers - non-compliant wood packaging material, the pallets, crates and dunnage used to ship goods internationally, and the disruption that follows when regulators intervene.
The guidance paper examined the insurance implications of non-compliance with International Standard for Phytosanitary Measures No. 15 (ISPM 15), the international rule set by the International Plant Protection Convention governing how wood packaging must be treated and marked to prevent the spread of pests and plant disease across borders.
Lars Lange, IUMI's secretary general, said that while ISPM 15 is primarily a plant-health measure, its enforcement can create significant operational and financial consequences for the marine cargo sector. When non-compliant wood packaging is identified, authorities can detain a shipment, require emergency treatment or fumigation, order repacking or destruction of the packaging, or send the entire consignment back to its country of origin.
Lange said the key message for marine insurers is that in the great majority of cases, the cargo itself is undamaged. ISPM 15 non-compliance is usually not about physical damage to the goods being shipped, but about the disruption and costs that follow once a regulatory authority steps in. Lange has previously flagged similar trade-related pressure points to Insurance Business, warning that protectionist trade measures can constrain global cargo flows and elevate risk accumulations at ports, part of a wider set of frictions facing cargo insurers this year.
ISPM 15 has been in place for more than 20 years, yet a sizeable share of cargoes are still shipped using wood packaging that is either unmarked or incorrectly marked, rather than genuinely failing the underlying treatment requirements. While the US accounts for the majority of notifications globally, ISPM 15 has been adopted by all the world's major trading economies, and rejections occur in many countries. IUMI's guidance argued the standard should be applied equally across all jurisdictions rather than only in regions where enforcement is perceived to be strongest.
That warning is particularly timely given recent US enforcement changes. US Customs and Border Protection resumed full enforcement of a specific marking detail, the hyphen separating the country code and treatment facility code within the compliance stamp, from January 1, 2026, ending a temporary suspension that had run through most of 2025. APHIS has confirmed there is no grace period for the change, meaning a mark reading "US123" rather than "US-123" is now treated the same as any other non-compliant packaging, triggering an Emergency Action Notification and potential detention, re-export or destruction requirements.
Lange also flagged a fraud risk specific to this class.
"WPM marking is not difficult to forge, and where authorities find a marked WPM to be infested, many will treat the marking itself as fraudulent rather than simply non-compliant," he said. "In some jurisdictions, notably the USA, cases have resulted in large civil penalties and even felony convictions."
The guidance sets out a series of straightforward preventive measures: sourcing wood packaging from appropriately registered treatment providers, carrying out visual checks before loading, verifying that International Plant Protection Convention marks are present and legible, and retaining treatment certificates, batch records and supplier registration evidence. IUMI recommended applying the same checks regardless of a shipment's destination, rather than only where enforcement is expected to be strictest.
The paper also highlights a particular exposure in groupage and consolidated shipments, where a single shipper's non-compliant dunnage or packaging can trigger regulatory action affecting multiple, entirely unrelated cargo interests sharing the same container.
For insurers, IUMI recommended treating wood packaging sourcing and documentation practices as part of understanding the underlying cargo risk, while recognising that documentation alone cannot substitute for effective operational controls on the ground.
Pascal Dubois, chair of IUMI's Loss Prevention Committee, summarised the key messages: "In most cases ISPM 15 non-compliance is not about physical damage to insured cargo, it is about operational disruption such as detention, fumigation, repacking and delay cost.
Although responsibility for compliant WPM typically rests with the shipper or packer, insurers should be aware that the supply chain behind a single pallet is often longer than it appears, which may complicate attribution and recovery. Lastly, simple, low-cost preventive measures such as the use of registered treatment providers and verifying IPPC marks and the package condition before loading can meaningfully reduce the likelihood of a rejection."
Dubois has previously stressed to Insurance Business that loss prevention only works as a genuinely joint effort between assureds, brokers, underwriters and regulators, a principle that applies directly here given how many parties in a supply chain can be affected by a single non-compliant pallet.
This guidance lands at a moment when the cargo insurance class is otherwise performing well on paper. IUMI's own 2025 Stats Report found global cargo premiums rose 1.6% to US$22.64 billion in 2024, with loss ratios improving for a sixth consecutive year.
But IUMI's cargo committee chair has separately flagged cargo accumulations and mis-declared goods as persistent challenges facing the class even amid that stability, underlining why a seemingly administrative issue like packaging compliance still warrants dedicated guidance: strong headline figures can mask specific, recurring friction points that don't show up as catastrophic losses but still generate real disruption and cost.
What makes this guidance land at a genuinely useful moment is the timing of US enforcement tightening: a technical marking detail as small as a missing hyphen is now sufficient grounds for a full compliance action at US ports, with zero grace period.
For marine cargo insurers and brokers, that turns a seemingly administrative packaging detail into a live, quantifiable source of delay-related claims and disputes over attribution, particularly in consolidated shipments where the party responsible for a single non-compliant pallet may be far removed from the cargo interests actually affected by the resulting detention.
