News & Insights

Addressing freight and logistics pain points – what you can do

Published 23 November 2021


Delays and slow-downs in shipping deliveries are putting transport and logistics operators under pressure in getting their goods to customers and raising new risks to be managed. It’s a case of rolling with the punches by responding to these pain points with appropriate strategies for risk management.

The difficulties for Australian businesses are mainly due to the ongoing effects of the COVID-19 pandemic  
•    increased consumer demand 
•    the availability of containers
•    limited shipping space 
•    increased costs as a result of demand
•    unreliable shipping information.

These difficulties have multiple roll-on effects on transporters’ risk exposures.

The increase in demand can lead to errors in deliveries or mistakes that cause damage to goods. This can have an effect on your goods in transit insurance. Having to store more of your customers’ goods for longer may also have an effect on your property policy. 
 

 

The effects of logistical issues on shipping outcomes

With the Northern Hemisphere maintaining a monopoly over the supply of empty shipping containers Australian transport and logistics operators are finding their choices limited to return containers and are also having to use their own properties to store containers that would normally go straight to the customer or the ship.  

It’s important to check any contracts with your customers and to clarify who is responsible for demurrage if containers are held up or multiple arrive on the one ship without additional free storage days from the shipping companies. 

Limited shipping space onboard vessels and delays and hold-ups also mean that loaded containers may not ship in the intended consignment, and this has insurance implications if consignment cover applies to multiple containers instead of a single one. 

Early communication with customers ensures they know the possible costs for these delays and can decide how to handle their deliveries. Just assuming they will pay the demurrage is not a good strategy. 
 

Spread your risks to reduce potential impacts

A strategy of spreading your risks is always the best option. Where possible, spread your customer base not only by revenue, but also by industry type. There are certain industries experiencing great change in the current environment and some may not survive. 

Importantly, document everything. Keep detailed records of the arrangements you have made for every consignment, in case you have to make an insurance claim. 

At the same time transport and logistics operators should review their insurance policies to ensure sure they’re appropriate for new exposures. Working with your broker can help determine what cover is needed and whether your terms are adequate for the current risks.

To find out more about what our transport industry broking specialists can do to enable your business to keep moving in the right direction get in touch with us.
 

Originally published by Australasian Transport News/Future Trucking 

Further reading

check

Transport and logistics insurance

Find out more chevron-right
check

Be ready to take advantage of transport logistics opportunities

Find out more chevron-right
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.
Be ready to take advantage of transport logistics opportunities
Transport | Article

Be ready to take advantage of transport logistics opportunities

02 September 2021
Transport drivers’ health targeted for workplace risk action
Transport | Article

Transport drivers’ health targeted for workplace risk action

27 April 2021
5 key ways for transport businesses to get the most out of your insurance broker
Transport | Article

5 key ways for transport businesses to get the most out of your insurance broker

25 February 2021