Cargo theft and security issues during transport on land remain a serious issue and point of attention. In that respect, the TAPA EMEA conference on 7 and 8 June in Amsterdam focussed on risk prevention, security and resilience in supply and logistics under the heading of “Resilience@risk”. IUMI was invited to speak at the insurance panel discussion on day 2, emphasising the need for collaboration in risk prevention by all stakeholders and to clarify some transport insurance baselines. The panel discussion titled ‘Don’t worry, we have insurance for lost items’ was led by Björn Hartong of Zurich and joined by Michael Yarwood of TT Club, Thomas Ziehn of Köln Assekuranz, Ben Suurd of Reckitt Benckiser and Eric De Smet of Baloise on behalf of IUMI.
A first point of attention was the hidden cost of theft and consequential disruption of the supply chain. Although difficult to quantify in general terms, but based on real life examples, it was held that the actual economical costs of theft during road transport is a multitude of the value of stolen goods. Other hidden aspects are reputational risks and lack of transparency in the logistical chain.
This statement offered a good opening to clarify some unknown elements of (transport) insurance. The consequential losses are not compensated in a cargo theft insurance. Also the fact that road carriers can be held liable for damages and losses (including, depending on the circumstances, for theft) is not sufficient to rely thereon and not take out proper cargo insurance. Indeed, the road carrier and/or freight forwarder can be exempted from liability according to CMR, haulage or forwarders’ general conditions. And even in case of liability the amount can be limited as per CMR or other limitations. Therefore, also the cooperation within companies between risk prevention, insurance and procurement should be in focus: decisions on with whom to transport or store goods should not be a cost-only decision.
In the short-term surveyors, investigators, insurers can deal with claims but the long-term view is equally important: raising awareness, working on prevention and building long-term partnerships with reliable contractual partners for transport, storage, distribution.
A second theme of the discussion was the importance of risk prevention and security. Here of course insurers and stakeholders associations such as TAPA have common ground. Initiatives of cooperation on security, information sharing (e.g. TAPA EMEA Intelligence System (TIS)), Facility Security Requirements (FSR) and safe parking as coordinated by TAPA are good examples of best practices and tools. They are at least as important as legislation and funding by public funds. So self-organisation and joining forces are key.
Where legislators could come in is regulation regarding freight platforms. The managers of these panels should be held accountable for properly checking the persons or companies joining it to offer their services. This is crucial to prevent the fraud which is being done by unreliable transporters or criminal organisation making misuse of the platform and its innocent users.
Investing in risk prevention could be a winner for all: the company from a risk and loss mitigation point of view (certainly for losses not covered by insurance) and insurers to take that into account in pricing and long-term relationships. Working together and knowing the risk but also the insurance policy terms is important.
A last remark concerns the fact that cargo is much more at risk for theft when it is not moving. The secure parking initiative is important but also the changes in the ‘just in time’ concept is an element to be taken into account. The COVID-19 aftermath and disruptions in the logistical chain will see a shift to more storage as stock and distribution will be moved (again) closer to production and consumer centres. Therefore, one can fear that more cargo which is not ‘moving’ will be vulnerable. It is an increasing risk and warning for all, a real wake up call.
The panel discussion can be viewed in this YouTube video.