Packaging short cuts raise premiums

ALAN PEAT LOOSE CONTROLS of co-loaded containers are still causing a number of problems for marine insurers, a year after Dave Keeling, partner in Underwriting Management Services and vice-chairman of the Association of Marine Underwriters of SA (Amusa), first told FTW about the issue. The problem is at this end of the supply chain where large numbers of less-than container load (LCL) containers are being cleared and destuffed in Durban – mainly to avoid the high return costs of containers in Gauteng being charged by the shipping lines. “But a lot of the packaging is for containerised cargo,” Keeling told FTW, “and it doesn’t offer enough protection on the breakbulk last leg of the delivery chain to the destination.” The cost for the insurers is relatively low – but there have been claims in recent times running into hundreds of thousands, and it’s these which escalate the problem to significant proportions. “It’s not a problem that is going to destroy the market,” Keeling said, “but it’s a niggly irritation which just shouldn’t be there.” And it’s one that impacts most significantly on the smaller importer – because they are the ones who usually can’t fill a full container load (FCL), and therefore have to use the LCL option, which often leads to the co load problem. “It’s usually only at the end of the financial year that this is noticed,” said Keeling, “because it’s then that the insurer notes that the claims for the year may have exceeded the premium. To page 8 From page 1 “This means that the importer then has his policy cancelled, or has to face a much increased premium.” A lack of adequate documentation – those “loose controls” mentioned earlier - makes it very difficult to track-and-trace the movement of co-loaded cargo, according to consultant Graham Pile. “So it’s also very difficult to sort out claims,” he said, “and for insurers to work out where responsibility lies. “The main problem where two or more forwarders share a box, is that there normally isn’t a principal co-loader named. “And there should be,” said Pile, “otherwise there’s no check on the completed container load, and no liable party. “They need to work out a contract of carriage. An agreement in terms of which there’s a principal co-loader, who will carry the can if anything goes wrong.”