Page 14 - Logistics News - March_April 2022

F R E I GHT

Freight and transport

in post-COVID recovery

Elesh Bisla, CEO of GENRIC Marine Underwriting Managers, offers advice to the transport and
freight industries on how to meet the challenges brought on by the pandemic.

conomic slowdown and slow recovery in the midst supply chain journey. The brokers, underwriters, adjusters,
of the pandemic are major challenges facing the surveyors and claims handlers play a crucial role in this supply
E transport and logistics industry, and this, coupled with chain, and their skills and experience are increasingly in
trade tensions and political upheaval, are exacerbating the demand,” explains Bisla.
supply chain risks in the transportation and logistics industry.
One of the key lessons learned from the COVID-19 experience Escalating overhead costs
is the massive interdependence of the supply chain, and that “Freight forwarding and cargo handling is a highly competitive
disruptions are becoming more severe and occurring with industry and price plays a big role. With escalating costs from
greater frequency. fuel to taxes, duties and security, there is always the temptation
to cut costs and corners, including on the insurance side – often
In such an environment, the freight forwarding sector is with disastrous consequences if and when things do go wrong.
under tremendous pressure in terms of costs and achieving We’re seeing an increasing trend of freight operators taking
operational efficiencies, while also having to balance the risks the bare minimum of cover, exposing themselves to massive
faced in safeguarding valuable and high-risk cargos through liabilities both in terms of their balance sheet and reputation.
marine insurance solutions. In some instances, freight forwarders are so eager to sign up
new business that they do not fully interrogate the real value,
Elesh Bisla says that while marine insurance products risks and liability associated with the cargo they are taking on,”
are conventional in nature, each policy must be customised says Bisla.
to meet the unique needs and risk exposures of every client,
every cargo and every operating environment – from simple Consider the implications of a logistics company that only
and straightforward, through to complex and high-value. has R500,000 damaged goods cover, but the cargo load being
Here, the roles of experienced marine insurance brokers and transported is worth R4 million. If that vehicle is involved in
underwriters are crucial. an accident and the load is an outright loss, the implications of
a R3.5 million shortfall in cover could put the forwarder out of
“In an increasingly litigious environment, as well as business permanently and they would be liable for the damages.
escalating crime and weather catastrophes, it is crucial that all
role players in the supply chain fully understand the nature Escalating crime
of freight being transported, its value including all duties and Escalating crime and syndicates pose another significant risk,
taxes, the transportation risks whether by sea, air, rail or road, with cargoes such as electronics, cell phones, sim cards, alcohol
who is liable and what exactly is covered at every point of the and cigarettes falling prey to hijackers and looters.
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