Risk management should inform port decisions

As southern African ports up their game in order to challenge Durban’s dominance as the gateway into the region, cargo risk management is one of the key considerations when weighing up the options. While premiums don’t differ from port to port, the infrastructure and service often determine the degree of risk to which shippers are exposed. The big issues in any port are varied, says strategic account manager at cargo risk specialist Aon, Shivien Pillay. “These range from mishandling of containers in the port to potential strikes and delays caused by congestion,” says Pillay. “Since a port is run by a state-owned entity, recovery prospects against these entities are slim,” he added. Customs inspections also increase the risk of theft or damage to goods being inspected with potential delays as a result. Shippers are therefore well advised to insure against unforeseen and accidental loss or damage to cargo caused during normal port handling or as a result of strikes. “As with all marine insurance, prevention should be the first consideration,” says Pillay. “It involves adequate packing and protection of cargo so that it can withstand the normal rigours of container handling.” Shippers also need to think beyond the cargo. “They should determine whether they are liable for loss or damage caused to containers in which their goods are shipped,” says Pillay. “In terms of the bills of lading conditions, the shipping line could hold the shipper liable for the container that has been provided.” While it’s simply common sense to ensure that all the relevant shipping documents are correct to avoid unnecessary delays, Pillay advises that where special loading and handling procedures are involved, an independent marine surveyor should be employed to monitor the shipment. INSERT & CAPTION Since a port is run by a state-owned entity, recovery prospects against these entities are slim. – Shivien Pillay