Little growth yet – but hopes of year-end uptick

The logistics industry is no different from other businesses in its need for insurance, the “invisible necessity” that offers security for shipments from the mundane to the risky. Like all links in the supply chain servicing logistics firms, insurance underwriters have taken their lumps during this past year’s shipping slowdown. “Our business is import/export insurance, covering all the logistics involved in all legs in the transport of cargo, including warehousing. Our customers have been battling in terms of volumes. In our industry if there is a slow economic climate where clients aren’t sending cargo there’s nothing for us to insure,” said Mike Brews, COO of Associated Marine in Johannesburg. “Volumes are down and our industry has definitely felt it. I see the tide slowly turning. We are back up to last year’s levels, but definitely there’s been little or no growth on last year so far. Hopefully by year’s end we will see a pick-up,” said Brews, who reported that unlike the logistics firms with whom he deals who have laid off workers his firm has avoided retrenchments and is looking ahead. “We’ve rebranded and refocused our energies on our services. Maritime insurance has been around since the 12th century, so it is very difficult to make improvements on the product itself. We will differentiate ourselves with quality customer service, reducing claims turnaround times (from initiation of a claim to payment) and further staff training,” Brews said. “Maritime insurance is all about experience, rather than just looking into a rate guide or rate book. By sea there is a higher risk because of the longer voyages while other risks face road and rail voyages. We analyse each shipment on its own merits. Containerised cargo, breakbulk, groupage, there are so many variations. The method of conveyance – road, rail, sea, air, even pipes – determines rates, as does the previous history of a client and what risk controls they put into place to reduce losses, such as security at warehousing, armed escorts for valuable shipments that are not necessary for iron ore but needed for an expensive commodity like cell phones. Is the shipment going to a first world or third world country – the US or Nigeria?” Brews said of the varied considerations affecting his customers’ costs.