Freight News, Logistics

Cargo claims: When will they ever learn?

[ February 26, 2015   //   ]

There is a depressingly familiar theme to the list of top five reasons for claims in multimodal transport, says the TT Club. The international transport, freight and logistics insurance provider found that 66% of its claims by number and 62% by value over five years can be categorised into just five causes – traffic accidents US$68 million (16.1%); handling equipment collisions $57 million (13.5%); theft $54 million (12.7%); fire $44 million (10.5%); and cargo packing $41 million (9.8%).

The analysis of 7,000 insurance claims totalling $425m between 2010 and 2014 showed the same five causes as in its previous five year analysis.

The Club’s risk management director, Peregrine Storrs-Fox,said: “Risk management and loss prevention initiatives really can be effective in reducing not only losses, but also the largely hidden costs of disruption that ensues. There are many prevention strategies and actions that can be put in place to reduce costs and occurrence of claims, and these should be of paramount importance for the transport industry”.

He expanded: “Many traffic incidents and collisions are due to inappropriate speed, but detailed case review frequently demonstrates the impact that effective management culture can have on preventing losses. For example, technology solutions, such as the use of GPS tracking or anti-collision sensors, can only be effective when regularly enforced and integrated into staff management.”

With fire the fourth most costly area, cargo mis-declaration “is a real and continuing concern, although a significant number of fires can be traced to design or maintenance issues,” he added.

The TT Club also asserts that 65% of cargo damage incidents can be attributed in part to poor or incorrect packing, hence the importance of good practice guidance, such as the CTU Code.