Page 32 - Logistics News - Issue 02 - 2024

R I SK M A NA G E ME N T

Safeguarding cargo transport

amidst rising risks

By Natalie Cooper, Senior Marine and Aviation Broker at Aon South Africa

Businesses entrusted with the task of cargo transport must fortify their defences
against uncertainty and volatility through a blend of risk engineering, insurance and
business continuity planning, and this is more important than ever in an industry
sector that underpins trade and world economies.

ivil unrest, riots and crime are persistent threats From the threat of vehicular damage and cargo pilferage, theft
businesses across South Africa pay extra attention to in and hijackings and safety of employees and drivers to disruption
C the run-up to and after the national elections. These risks of transportation schedules, toll costs, carbon taxes, fuel and
hold significant implications for transport operators, notably maintenance costs, increased private security and monitoring
those in cargo/freight transport and logistics by road, with costs – especially for high-risk cargo – as well as collapsing road
hard lessons learnt from the riots of July 2021 that saw over infrastructure and delays at ports and harbours, the challenges are
R50-billion in resulting damage and 340 lives lost. Key lessons manifold.
learned from the July riots as well as the COVID-19 experience
are the massive interdependence of the supply chain and that Given the tough operating environment and a hardening
disruptions are becoming more severe and occurring with insurance market, the insurability of commercial fleets and
greater frequency. cargo is no longer a simple ‘given’ as underwriters have
become increasingly risk-selective and expect clients to have a
The explosive growth of online shopping and e-commerce comprehensive plan in place to minimise and mitigate risks.
in South Africa also attracts heightened risk in an industry that
saw e-commerce through domestic retailers reach $3.5-billion A proactive approach to risk management and mitigation that
in 2021 and which is expected to generate revenue of $6-billion embraces risk engineering guidelines is crucial and encompasses
by 2025. The vast majority of these products and services reach the following measures:
their consumers via road transport and they’re increasingly in • Undertaking comprehensive risk assessments can aid businesses
the sights of sophisticated crime syndicates that target anything in pinpointing potential hotspots and high-risk areas, informing
from electronics and cell phones, consumables and food and strategic decisions regarding route planning and contingency
designer gear to cigarettes and liquor. measures.
• Equipping vehicles with tracking and real-time monitoring
This heightened risk landscape poses a formidable threat systems can fortify them against external threats, further
to transport operators’ employees, operations, cargo and bolstering resilience in the face of adversity.
assets. However, with solid risk management and engineering • Exploring means of armouring vehicles carrying high-value
strategies, backed by marine insurance, the best-prepared or sensitive cargo is also an option to explore in safeguarding
businesses can manage and mitigate potential losses as far as employees and load.
possible. • Training of drivers is crucial in equipping them with the knowledge
and insight to handle emergency procedures and protocols during
Understanding the many complexities and interlinked adverse events such as riots and strikes, natural disasters or
nature of risks in the cargo transport sector is paramount as hijacking, with an emphasis on safeguarding their own lives.
they underscore the delicate balance of processes in delivering • Keeping communication channels open between drivers,
goods and services to millions of people and businesses customers and stakeholders is key to situational awareness.
across the country. The critical importance of our freight/cargo • Fostering collaborative partnerships with security services and
transport industry to our economy and livelihoods, and its local authorities can also enhance situational awareness and
safeguarding, cannot be emphasised enough. facilitate timely interventions when crises emerge.

30 NO V E MB E R/D E C E MB E R 2024 www .l o g ist i csn e w s .c o .z a