Cargo at risk amid ongoing coronavirus lockdowns + loss prevention methods

Owners and handlers of high-value, perishable and temperature-sensitive goods are paying the price as goods perish or are damaged or stolen amid coronavirus-related disruption.

Analysis of marine insurance industry losses carried out by Allianz Global Corporate & Specialty shows that damaged goods, including containers, was already one of the most frequent cause of losses, accounting for more than one in five claims (22%), based on more than 230,000 claims over the last five years.

“The current pandemic situation has impacted the global supply chain in an unprecedented manner and risks to cargo in storage and transit, especially to high-value and temperature- sensitive goods have significantly increased,” says Captain Rahul Khanna, global head of marine risk consulting at AGCS. “Locked down and unmanned facilities means not only an increased risk of theft and fire to the cargo but also risk of damage to goods due to extended storage periods. Transit disruptions to cargo due to closed borders, delayed customs clearances or simply due to lack of personnel can mean long delays to delivery times or even cargo being abandoned. Companies should do all that they possibly can to implement robust planning of cargo shipments and ensure they have back-up plans in place because of the last minute shutdowns we are seeing around the world.”



Cargo contingencies (Source: Coronavirus: Loss Prevention Measures For Cargo Storage And Transportation, AGCS)

In a new report, AGCS' experts highlight a number of policies and practices cargo owners may consider when developing contingency plans.

Cargo storage risks
The accumulation of unattended cargo in warehouses increases the threat of theft and organised crime. Where possible companies should consider to strengthen warehouse security and check alarm functionality. Companies should also consider checking whether prolonged staging of loaded trailers outside of warehouse locations can be avoided, as this increases the risk of cargo theft and damage. With the coronavirus outbreak having the potential to cause prolonged disruption to supply chains inventory turn times will increase and capacity in warehousing spaces will be limited, therefore companies should also consider identifying alternative warehouse capacity in the event occupied spaces can no longer safely receive cargo.

Cargo transit risks
Companies should endeavour to obtain confirmation that the final destination is still able to receive cargo prior to beginning the shipment and make preparations for its possible non-receipt, as an increasing number of organisations are ceasing operations at short notice.

Using trailers that have integrated GPS technology whenever possible and also integrating Internet of Things monitoring devices into cargo packaging can enhance shipment visibility. These devices can provide real-time location information in the event of shipment deviation or delay.

Where possible companies should also consider reviewing requirements for perishable cargoes. Food and pharmaceutical products associated with the response to the coronavirus outbreak have been given priority for temperature-controlled capacity. Therefore, non-critical perishables will be subject to increased transit time as temperature-controlled capacity is stretched. Consider to review packaging design to ensure applied schemes are able to maintain required product temperature for an extended period of time. Additional packaging or storage configurations should be considered for just in time perishable products not deemed critical under the latest guidance.

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