The pandemic has brought about sudden changes for cargo transportation, impacting shippers and transport companies around the world and increasing the risk, particularly, for high-value and temperature-sensitive goods. There are seven steps for cargo owners to consider when developing contingency plans. Lee Kok Leong, executive editor, Maritime Fairtrade, reports
While in most cases, government directives have established cargo transportation as an essential activity, permitted during any quarantine period, a large number of companies are shutting down operations and are currently unable to handle cargo. Locked down and unmanned facilities means an increased risk of theft and fire to the cargo and 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.
Analysis of marine insurance industry losses by Allianz Global Corporate & Specialty (AGCS) over a five-year period shows that damaged goods, including containers, is the most frequent generator in the shipping industry accounting for more than one in five claims, based on more than 230,000 claims. The following are AGCS’s recommendation to mitigate the risks during storage and transit.
Mitigating risks in cargo storage areas
- The accumulation of unattended cargo in warehouses brings the added threat of theft and organized crime. Where possible, strengthen warehouse security and check alarm functionality.
- 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, consider identifying alternative warehouse capacity in the event occupied spaces can no longer safely receive cargo.
Mitigating risks for cargo in transit
- Obtain confirmation that the final destination is able to receive cargo prior to beginning the shipment. If necessary, prepare for the possible non-receipt of cargo at the final destination, as an increasing number of organizations are ceasing operations at short notice as a preventative measure.
- Identify the amount of cargo in transit and obtain status updates from carriers. If the intended destination is unable to receive a shipment, check whether it is possible to seek alternative destinations.
- Utilizing trailers that have integrated GPS technology and also integrating Internet of Things monitoring devices into cargo packaging to enhance shipment visibility.
- Reviewing requirements for perishable cargoes, e.g. review packaging design to maintain required product temperature for an extended period of time.