established expertise

FIATA ABLM

10th October 2012

Overview of Loss Prevention Issues 2012

Helen Arabanos

TT Club

established expertise

Reducing accidents and

insurance claims in the

supply chain

established expertise

Operational Error

(US$76m)

63%

Poor Maintenance

(US$40m)

33%

Other (US$5m)

4%

Operational error accounts for 63% of the cost of claims in the supply chain

(includes theft)

Total Claims

established expertise

Systems & Processes

(US$33.4m)

45%

Theft (US$20.8m)

28%

The greatest cause of claims comes from poor systems and processes

Operational Errors

established expertise

Top 4 most frequent causes of systems and processes going wrong are:

Bad Stowage & Handling

35% of claims

Customs

17% of claims

Clerical Errors

14% of claims

Contractual Issues

13% of claims

Systems and Processes

established expertise

Systems & Processes

(US$33.4m)

45%

Theft (US$20.8m)

28%

The second highest cause of claims within operational error is theft

Operational Errors

established expertise

62% of all theft claims are

a result of theft in transit

87% of these are claims are where a

Member has used a Contractor

Only 13% of claims for theft in transit

occur where the vehicle is operated by

the Member

Theft

established expertise

Theft

established expertise

Contractual procedures

• Have a robust approved subcontractor selection policy

• When requesting insurance documents always ensure the original certificates are posted to you and always verify the legitimacy of the policy with the insurer.

• If using internet clearing sites always follow the website’s recommendations for safe usage and loss prevention

• Take extra care should the previous contact at your established subcontractor suddenly change

Physical procedures

• Send trucks in convoy

• Only stop at approved truck stops

• Do not leave trucks unattended

• Check locks and seals

• Alter routes for regular deliveries

• Tracking devices

• Share bad experiences

Minimising transit thefts

established expertise

Know your shipper/co-loader

• Hanjin Pennsylvania - 2002

Chinese shipper declared fireworks

as childrens’ toys.

• Dangerous goods mis-declared – eg. 2 incidents in 2012 of airfreighted cargo

declared as “mould” and “metal iron” were in fact liquid mercury, poorly packed in

inadequate cylinders, which leaked all over the airplane. 2 airplanes out of action.

Chinese shipper. Freight Forwarder left “holding the baby”. Multi-million USD claims.

• MSC Flaminia – 2012 - cause still under investigation, but currently thought to be

cargo related

established expertise

What we tell our Members and brokers…

Know your contractor • What’s the contractor’s company registration

number?

• How many years have they been established?

• Where are they registered?

• Are they affiliated to an Industry Trade Body?

• What are their Standard Terms & Conditions?

Road haulage - Theft

established expertise

• Is it worth the cost and time to do things safely and correctly?

Definitely YES

• The results are: • Injury reductions

• Cost savings

• Increase in efficiency

• Productivity increase

• More efficient deployment of employees

• Improved customer relations

• Reduced insurance claims and premiums

All of which can be achieved through………

Summary

established expertise

Training: • Continuous safety awareness

• Container stuffing and securing

• Mandatory dangerous goods training for all shore side staff

Procedures: • Systems & processes procedures

• Cargo stowage and handling

• Clerical Error

• Customs

• Contractual issues

• Theft prevention • Contractor management

• Security in transit

Loss Prevention Focus

established expertise

Specialist insurance products and services packaged for the

international transport and logistics industry