TT Club’s Phillip Emmanuel has put into perspective some of the sensationalism surrounding the recent growth trend in container ships.  Speaking during a plenary session of the TOC Asia Conference in Singapore on Tuesday, he advised ports and terminals to take a measured approach to the risk management of their operations, looking carefully at the ramifications to their own facilities of potential larger ship calls.

Singapore, 23 April, 2015

TT Club is well-positioned as a leading insurer of risks for container lines and cargo handling facilities to advise on the type and extent of exposure.  Outlining the Club’s position, Emmanuel explained that the potential for damaging incidents to occur is generally more a factor of an individual operation’s adoption of best-practice, sound maintenance and the application of efficient safety measures than size of ships or volumes of cargo.

In addition, it is clear that the largest of the container ship newbuilds, now capable of carrying nearly 20,000TEUs, can’t and won’t call at the majority of the world’s terminals.  Their introduction onto the Asia-Europe trade will, however, displace smaller units, which in turn will be utilised on trades, and call at ports, where previously they have not been seen.

“As such,” commented Emmanuel, “Terminal operators should take precautions that are relevant to the specifics of their own operation.  Bigger ships and greater container volumes will only augment the exposures that are already inherent in their current operations.” As examples, Emmanuel highlighted the requirement in any location for upgraded – and expensive – technology represented by new cranes and more yard equipment that might be necessary to handle larger ships.

The type of risk and the more common causes of insurance claims, however, remain the same.  Emmanuel used his conference presentation to articulate some of these gleaned from extensive TT Club analysis of its own claims records, stating, “The direct interaction at the berth between ship and terminal facility accounts for 31% of the total cost of claims for ports and terminals over the last five years. Indeed, the most valuable asset of any terminal, the quay crane, unsurprisingly represents the biggest single element (some 25%)”.

These statistics serve as a reminder to ports and terminals to consider, not only berth length and depth, but also issues such as berthing and the capability of tugs, mooring lines and bollards. The analysis for ports and terminals highlights the impact and regularity of ship collisions with the crane booms, crane brake or structural failure, and hoist and spreader malfunctions, in addition to crane collapse due to windstorms. “These risks can all be minimised by efficient maintenance programmes, proper use of safety technology and adequate windstorm protection whatever the size of ship being worked,” concluded Emmanuel.

ENDS

Notes to editors:

TT Club

TT Club is the international transport and logistics industry’s leading provider of insurance and related risk management services.  As a mutual insurer, TT Club exists to provide its policyholders with benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.

Customers include some of the world’s largest shipping lines, busiest ports, biggest freight forwarders and cargo handling terminals, to companies operating on a smaller scale but whose operations face similar risks. TT Club specialises in the insurance of Intermodal Operators, NVOCs, Freight Forwarders, Logistics Operators, Marine Terminals, Stevedores, Port Authorities and Ship Operators.
www.ttclub.com

About Thomas Miller

Thomas Miller is an independent and international provider of insurance, professional and investment services.

Founded in 1885, Thomas Miller’s origins are in the provision of management services to mutual organisations, particularly in the international transport and professional indemnity sectors; where today they manage a large percentage of the foremost insurance mutuals. Thomas Miller also manages insurance facilities for all the self-employed barristers in England & Wales, as well as trustees of pension schemes, patent agents and housing associations.

Principal activities include:

• Management services for transport and professional indemnity insurance mutuals
• Investment management for institutions and private clients
• Professional services
• Building defects insurance

www.thomasmiller.com

Speaking during Baltic Transport Week in Gdansk this week Andrew Huxley, Development Director at freight transport insurance specialist TT Club, warned port and terminal operators to be aware of the reputational damage that can be a serious consequence of uninsured incidents resulting from avoidable risks

Gdansk, 19 March, 2015

It is estimated that for every unit cost incurred in insurance claims it can cost between eight and thirty-six times that amount in direct and indirect uninsured losses for the business involved*. Such expenses may accrue from the emergency supplies required to normalise the situation, operational delays, increased maintenance and training requirements after the event but particularly reputational and commercial damage that can affect business for some time. For the port and terminal sector, Huxley highlighted that TT Club’s own claims analysis concludes that 88% of the cost of insured claims result from operational inadequacies or poor maintenance; the vast majority of such shortcomings being avoidable.

“Our research, covering over 7,000 claims of a value in excess of US$10,000 made over the last five years, has sought to be precise in identifying the root cause of claims, which gives us a significant advantage in advising on preventative measures. The overwhelming conclusion is that much can be done to reduce future claims, improve safety and security in Baltic ports and prevent erosion to the profitability of terminal operators in the region,” commented Huxley.

Though wide-ranging in its scope, Huxley chose to concentrate on the analysis’ findings regarding theft, cargo contamination and bodily injury. These types of claims are high on the list of the most damaging, not just in terms of financial loss but particularly, if they become repetitive, to the reputation of an operator. Consequent loss of custom and revenue can be ultimately more critical to a cargo handling business than the loss caused by the initial incident.

Theft from an operator’s premises (at 55% of all theft claims) and from sub-contractors while in transit (at 30%) are the two main areas of concern. “Physical security measures such as fencing, guards, alarms and CCTV are the most obvious preventions”, highlighted Huxley in his presentation, “But crime using the internet is an emerging risk with hackers accessing cargo release codes, changing delivery locations and altering inventory stock levels remotely”, he warned.

Perhaps not surprisingly nearly 80% of bodily injury claim costs involve mobile terminal equipment and vehicles in ports. The circumstances causing danger are often obvious to those that work in the environment and as such prevention should be higher on operators’ priority lists. “Employment of traffic management systems, anti-collision devices and good, regular driver training are not initiatives that require massive investment and state-of-the art technology, rather just sensible and practical operational management”, emphasised Huxley. Indeed, a key message from the TT Club is that training and review of systems often will not involve significant capital expenditure but can have a major impact on reducing incidents and improving productivity.
*UK Health & Safety Executive

ENDS

Notes to editors:
TT Club
TT Club is the international transport and logistics industry’s leading provider of insurance and related risk management services. As a mutual insurer, TT Club exists to provide its policyholders with benefits, which include specialist underwriting expertise, a world-wide office network providing claims management services, and first class risk management and loss prevention advice.

Customers include some of the world’s largest shipping lines, busiest ports, biggest freight forwarders and cargo handling terminals, to companies operating on a smaller scale but whose operations face similar risks. TT Club specialises in the insurance of Intermodal Operators, NVOCs, Freight Forwarders, Logistics Operators, Marine Terminals, Stevedores, Port Authorities and Ship Operators.

www.ttclub.com

About Thomas Miller
Thomas Miller is an independent and international provider of insurance, professional and investment services.
Founded in 1885, Thomas Miller’s origins are in the provision of management services to mutual organisations, particularly in the international transport and professional indemnity sectors; where today they manage a large percentage of the foremost insurance mutuals. Thomas Miller also manages insurance facilities for all the self-employed barristers in England & Wales, as well as trustees of pension schemes, patent agents and housing associations.
Principal activities include:

- Management services for transport and professional indemnity insurance mutuals
- Investment management for institutions and private clients
- Professional services
- Building defects insurance

www.thomasmiller.com