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.