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Blame history for those transport risk problems - Freight & Trading Weekly - 25 February 2000 edition -
- Freight & Trading Weekly
25 February 2000 edition
Blame history for those transport risk problems
MANY OF the problems involving the cost of risk to cargo owners dates back three hundred years and more. In today's highly commercialised world, this has to be overcome with a one-stop funding of risk throughout the transport chain, say risk management and finance consultants Eikos.It is through the introduction of the concept of limited liability in the marine industry by the innkeepers and carriers all those years ago, that a chain of duplication and inefficiency was started which, in many instances, is still in place today.
"The Eikos team is developing policies and instruments that will finally remove the liability overlap," says director Hugh Reimers. The aim is a single risk, single premium.
The company focuses on the operational and business risk exposure that comes with the physical transfer of goods in transportation.
What Reimers emphasises is that it is essential to integrate some core functions like risk finance, foreign exchange risk and trade finance into a single trade solution.
A specialised Universal Trade Applications (UTA) team has been established to design risk solutions in these categories, involving risk identification and profiling, with marine insurance, claims management, policy design and administration coupled with logistics in cost of risk analysis.
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