Clive Emdon The message from the MSC Napoli disaster came through loud and clear. There are some risks in transportation that may be inevitable and get out of control and should be transferred to the insurance market or alternative risk carriers, says Belinda Steedman of Alexander Forbes. “There has to be greater co-operation between the cargo owner, logistics providers and the insurance industry to achieve more effective risk management controls,” she told FTW. “The MSC Napoli has made us aware of this yet again, as many cargo owners have been left high and dry following this incident. Frequently cargo owners leave to chance the safe arrival of their cargo.” Cargo Risk Management (CRM) is a dynamic process that evolves with changing trends and needs to pay particular attention to a client’s unique risk profile, says Steedman. “Cargo owners need to manage loss to their market and sales, the risk to their reputations, as well as the potential increases in insurance and administrative costs if they are to be competitive in a global market.” The biggest losses to date as a result of the Napoli incident are what she terms ‘supply chain interruption’ where cargo remains intact but may take as long as five months to return to its owners. “It’s critical for cargo owners with the assistance of their forwarders and insurance brokers to formulate and adopt formal CRM programmes. “They need to identify, analyse and control risk in the transportation or cargo.” Traditionally the biggest challenges facing cargo owners and logistics providers are increased incidents of theft, insufficient packing, poor handling, inadequate stowage and heavy weather. Steedman says the setting up of formal CRM programmes should involve an in-depth analysis of seven key areas: • The contractual relationship between the buyer and seller; • The sensitivity and/or desirability of the commodities moved; • The socio-political climates at the place of origin and at the destination; • Supplier packing standards and the condition of containers used in a consolidation process; • Inland transport arrangements and the transporters used; •The port and storage facilities; • Security procedures throughout the transit.
