TT Club Guides Maritime & Logistics Industry on Risk Aversion


  • Date: 14/07/2014

Leading freight transport mutual insurer, TT Club holds a risk management seminar for transport executives and insurance brokers.  Detailed research of claims trends reveals key supply chain links at risk. 

TT Club numbers many ports, terminals, cargo handling facilities, transport and logistics operators among those companies that it insures.  As such TT occupies a prime position from which to identify the primary causes of risk and to advise on how such causes can be minimised.  An extensive analysis of the Club’s historic claims data has been carried out.  This covers nearly 7,000 claims of US$10,000 or more made over a five-year period (2009-2013) and involves losses occasioned in relation to general transport liabilities, property damage or loss and bodily injury claims.


These are some of the results presented at the recent Hamburg seminar. The percentages are representative of the total cost of claims in each operational business category.


• Transport & logistics (T&L) operators - 97% result from operational or maintenance issues
• Ports & terminals (P&T) – just 12% weather or other natural cause related.  88%  are operational or maintenance issues
• Therefore human error has some role in vast majority of incidents in both categories
• T&L – 53% of operational incidents result from poor systems or processes.  Of these 56% involve bad cargo handling or care & 37% incorrect documentation
• Lack of proper cargo securing causes 62% of T&L bad packing incidents
• P&T – 65% of operational incidents involved cranes & lifting equipment.  Virtually all were collisions with ships, container stacks or other equipment
• P&T – 14% of quay crane issues arise in discharge operations, often caused by eccentrically loaded containers
• T&L – 53% of theft occurs in transit while under control of a sub-contractor
• P&T – 57% of theft from premises
• T&L – 24% of claims are fire. Of these 82% are warehouse fires, reflecting the aggregation risk together with onerous logistics contract terms
• T&L – 10% of fires involve packed cargo; vast majority due to misdeclaration of dangerous goods
• Damage or loss of temperature controlled cargo represent 16% of P&T’s systems and process  errors and 17% of T&L claims arising from this same cause type

The comprehensive nature of the analysis is considerable and as such identifiable improvements to the operations of transport and cargo handling organisations are many and varied.  These were outlined in detail in the presentation given by TT Club’s Risk Assessment Director, Laurence Jones to the Hamburg audience*

TT Club strongly urges the use of industry best practice when it comes to safety and security procedures in general, together with regular training regimes for management and employees.  More specific initiatives may include the implementation of technology, such as anti-collision devices on cranes and lifting equipment. Equally, greater attention to procedures, for example stringent checks on the security policies of sub-contracted hauliers or careful monitoring for accuracy of documentation, including hazardous and weight declarations and employment of best practices in handling and packing of cargoes, including vigilance in the care of perishables have been shown to reduce claims. Furthermore, sound maintenance strategies for warehouse premises and vehicles, implemented rigorously deliver cost-effective asset management.

The list of loss prevention initiatives is lengthy but as Jones concluded, “Prevention through careful risk management is by far the best cure for costly incidents.  A combination of safe and physically secure facilities and equipment, rigorous checks and double-checks on safety procedures and well-trained, well-motivated personnel will go a long way to improve operational performance across the spectrum of freight transport.”

*Available on request

ENDS
Notes to editors:
TT Club is the international transport and logistics industry's leading provider of insurance and related risk management services.  As a mutual insurer, the TT Club exists to provide its policyholders with benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.

Customers include some of the world’s largest shipping lines, busiest ports, biggest freight forwarders and cargo handling terminals, to companies operating on a smaller scale but whose operations face similar risks. TT Club specialises in the insurance of Intermodal Operators, NVOCs, Freight Forwarders, Logistics Operators, Marine Terminals, Stevedores, Port Authorities and Ship Operators.

www.ttclub.comMedia:
Peter Owen
ISIS Communications
Tel: +44 (0)1737 248300
E-mail: info@isiscomms.com 

 

Contacts

TT Club:
Tally Judge
Tel: +44 (0)20 7204 2632
E-mail: tally.judge@thomasmiller.com
www.ttclub.com

An archive of all TT Club news release and photographs are available from the ISIS Communications Press Room at: www.isiscomms.com

 

 

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.