Eikos to address cover deficiencies in strike-related risk

While proactive action saved many perishable shippers from significant losses during the 17-day Transnet strike, a number were left stranded as vessels failed to sail on schedule with disastrous results. This brought into sharp focus a major challenge for the industry – getting the carriers to accept more responsibility for their sub-contractors (Transnet) who are their partners in the cold chain, says Eikos Risk Applications director Bimesh Ugarchund. In addition, the Institute Strikes Clauses – which should afford cover for these risks – were found to be grossly inadequate for shippers of perishables. The Clause covers physical loss or damage caused by strikers or persons taking part in labour disturbances, riot and civil commotion. But it does not cover loss or damage (or temperature variation and delay) arising from the absence, shortage or withholding of equipment, power, fuel, refrigerant or labour of any description whatsoever resulting from any strike, Ugarchund explained. “This cover is almost worthless to the shipper – and combined with the unwillingness of carriers and their partners to accept responsibility for these risks – the poor shipper is left with little or no protection when Transnet employees down tools.” Ugarchund told FTW that Eikos would address this cover deficiency with its specialist insurers in an effort to reduce the shipper’s strike-related risk in the future. “But shippers need to be aware of this shortcoming and contract accordingly with their forwarding agents/service providers in the cold chain.” He suggests that as an interim measure a through bill of lading be issued. “This will hopefully ensure that the forwarder/ shipping line contract caters for such potential problems.”