TT Talk - Review of top 10 risks for container terminals
TT Club continually seeks to understand the risks faced in the transport and logistics industry, providing relevant and targeted loss prevention advice to operators as appropriate. This article focuses on the findings of recent analysis into the risks faced by container terminals.
TT Club provides insurance to port authorities, terminals and stevedores in almost half of the world’s top 100 ports globally. As a result, it is well placed to analyse incident data, providing commentary and advice on trends and loss prevention actions.
This particular analysis focuses on the top 10 risks in container terminals, based on experience over the period 2014 to 2018. The analysis of these top 10 risks account for 78% of the cost of container terminal insurance claims, covering both assets and liabilities. It is sobering that many incidents are preventable with better training, systems and procedures and/or technologies.
This article looks at each risk in descending value order.
Top 10 Risks Categories by Insurance Claim Cost for Container Terminal Operators
# 1 risk - incidents related to quay cranes
Inevitably, in container operations, the crane that is usually positioned near the edge of the quay is both a key asset and hugely vulnerable. It has remained for a number of years the single most costly insurance claim, with all-too-frequent incidents involving boom collisions, gantry collisions or stack collisions. Due to their importance it may be surprising that currently economically viable technologies are not more widely adopted. Such incident experience has educated TT Club’s joint initiative with ICHCA and PEMA to develop the Recommended Minimum Safety Specifications for Quay Container Cranes.
# 2 risk - rain & flood damage
It may be difficult to avoid the path of a storm, but much can be done to mitigate the potential and resultant damage. While it is critical to secure and tie assets, such as cranes, or revise container stacks in the yard, a key risk remains storm surge and floods in general. Marine terminals are necessarily low-lying, so positioning more valuable equipment or goods to higher ground mitigates the risks. Further guidance in relation to storm risks can be found in TT Club’s handbook, produced with ICHCA, Windstorm II: Practical risk management guidance for marine & inland terminals .
# 3 risk - straddle carriers
Manual straddle collisions and overturns, besides causing damage, usually result in serious bodily injuries. Like most incidents, these are commonly due to human error. While these are top-heavy items, with inevitable blind-spots, there are monitoring technologies available to ensure mechanical performance and also support user behaviour and training.
# 4 risk - lift trucks
This classification includes fork lifts, empty handlers, top picks, side picks, reach stackers etc. While risks are various, one that stands out is injuries to pedestrians. Keeping people away from machines is a simple mantra; where unavoidable procedures and technologies need to protect those at risk.
# 5 risk - truck and vehicles
Other smaller vehicles, including internal transfer vehicles, third party trucks and all other vehicle on the terminal require good traffic management procedures and enforcement. Collisions and overturns remain all too common.
# 6 risk - ship in port
While a most welcome visitor to a port, ships are sadly prone to collide with the berth and on many occasions the crane as well. This has happened at least twice in the last month! The terminal may have little control, although clear procedures and communications between all stakeholders (ship, port, terminal, pilot, tug etc) may reduce the likelihood of such incidents.
# 7 risk - yard crane
The main risk with yard cranes is stack collisions – the spreader or a container under the spreader colliding with another container in the stack. This can result in stack collapses causing crane, container and cargo damage. However, the greatest concern is the injuries often resulting when a container falls on a waiting truck. The analysis indicates that the introduction of technologies associated with automated stacking cranes may prevent such incidents; the same technology can also be installed on manual yard cranes.
# 8 risk – fire
Fires can be devastating and have various causes. Notably, some 44% of the fire cost in container terminals arises amongst lift trucks; these need detection and suppression systems in the engine compartments, as well as assiduous attention to proper maintenance (see TT Club’s The Importance of Maintenance - a handbook for non-engineers). Cargo related fires may be difficult to prevent on the limited information commonly available, but careful fire-fighting is critical in minimising the potential damage.
# 9 risk – theft
TT Club and BSI recently published their annual theft report; while generic, this highlighted the ‘insider’ risk, which is particularly prevalent in the terminal environment. Furthermore, the Club has previously highlighted the increasing use of cybercrime to aid physical theft. Physical and system security is clearly paramount, alongside continuing awareness training and thorough checks for those allowed on site.
# 10 risk - bad handling
Cargo in the custody of the terminal may become damaged – such as an overturn where out of gauge cargo is moved without use of the requisite low loader. However, terminals also need to maintain robust records in order to defend claims that may be asserted erroneously for which evidence of condition at entry and exit is required.
Inevitably there are occasions where incidents are fortuitous and unavoidable – and that is the key reason for buying insurance. However, TT Club continues to focus its attention with individual facilities and across the membership on ways to improve safety and strengthen risk management practices. It saves lives and improves operational profitability.
We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.
We look forward to hearing from you.
Risk Management Director, TT Club