TRANSPORT facilities providers ought to weigh not only the direct costs of insurable mishaps, but also lasting "reputational costs" that take longer to go way, said an expert from marine insurer TT Club.
Crime using the Internet is an emerging risk with hackers accessing cargo release codes, changing delivery locations and altering inventory stock levels remotely, he warned.
Speaking during Baltic Transport Week in Gdansk this week, development director at freight transport insurance specialist TT Club, Andrew Huxley, told his audience to do what can be done to avoid avoidable risks.
Theft from an operator's premises stood at 55 per cent of all theft claims and from sub-contractors while in transit at 30 per cent. These were two main areas of concern, he said.
"Physical security measures such as fencing, guards, alarms and CCTV are the most obvious preventions," said Mr Huxley.
Mr Huxley focussed on the analysis of theft, cargo contamination and bodily injury. These claims are high on the list of the most damaging, not just in terms of financial loss, but also if they become repetitive, to the reputation of an operator.
Consequent loss of custom and revenue can be ultimately more critical to a cargo handling business than the loss caused by the initial incident, he said.
For every unit cost incurred in insurance claims it can cost between eight and 36 times that amount in direct and indirect uninsured losses for the business involved, he said, citing data from the UK Health & Safety Executive.
Such expenses may accrue from the emergency supplies required to normalise the situation, operational delays, increased maintenance and training requirements after the event but particularly reputational and commercial damage that can affect business for some time.
For the port and terminal sector, Mr Huxley said TT Club's own claims analysis concludes that 88 per cent of the cost of insured claims result from operational inadequacies or poor maintenance - the vast majority of such shortcomings being avoidable.
"Our research, covering over 7,000 claims of a value in excess of US$10,000 made over the last five years, has sought to be precise in identifying the root cause of claims," he said.
"The overwhelming conclusion is that much can be done to reduce future claims, improve safety and security in Baltic ports and prevent erosion to the profitability of terminal operators in the region," Mr Huxley said.
Nearly 80 per cent of bodily injury claim costs involve mobile terminal equipment and vehicles in ports. The circumstances causing danger are often obvious to those that work in the environment and as such prevention should be higher on operators' priority lists.
"Employment of traffic management systems, anti-collision devices and good, regular driver training are not initiatives that require massive investment and state-of-the art technology, rather just sensible and practical operational management," he said.
PORTS
07 April 2015 - 21:13
TT Club warns ports to protect themselves against reputational damage
TRANSPORT facilities providers ought to weigh not only the direct costs of insurable mishaps, but also lasting "reputational costs" that take longer to go way, said an expert from marine insurer TT Club.
PORTS
07 April 2015 - 21:13
TT Club warns ports to protect themselves against reputational damage
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