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FIATA 8th October 2012
Overview of Loss Prevention Issues 2012
Helen ArabanosTT Club
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Reducing accidents and insurance claims in the supply chain
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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
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Systems & Processes (US$33.4m)
45%
Theft (US$20.8m)28%
The greatest cause of claims comes from poor systems and processes
Operational Errors
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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
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Systems & Processes (US$33.4m)
45%
Theft (US$20.8m)28%
The second highest cause of claims within operational error is theft
Operational Errors
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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
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Theft
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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
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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
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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
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• 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
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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
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Specialist insurance products and services packaged for the international transport and logistics industry