Reinsurance News

COVID-19 heightens risk for cargo shippers, transportation firms: Allianz

23rd April 2020 - Author: Charlie Wood

A report by global insurer Allianz has underlined the impact coronavirus-related lockdown measures could have on cargo shippers and transportation companies, as supply chains continue to face prolonged disruption.

ship cargoAllianz notes how the growing number of locked down and unmanned facilities means not only a greater risk of theft and fire to cargo, but also potential damages due to extended storage periods, long delays or even abandonment of cargo.

Damaged goods already account for more than one in five marine insurance industry claims.

Allianz believes loss prevention measures to consider include contingency plans to counter last-minute shutdowns; utilizing IOT technology to obtain real-time location information in case of delay or deviation; and reviewing requirements for perishable cargos.

“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.”

Allianz’ report suggests that 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.

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