By implementing active risk and loss management programmes to mitigate often unpredictable risks to the cold supply chain – including delays and temperature deviations – shippers can ensure that their cost of risk is minimised and their marine insurance costs remain economical over the long term, according to Bimesh Ugarchund operations manager of specialist insurance company JLT Marine.
He told FTW that deviations or breaks in the cold chain compromised the quality of perishable goods to varying degrees.
“The results are loss of market and price, rejection of consignments, and in a worst case scenario a total loss of goods,” said Ugarchund, adding that the drought had also had a major impact on production quality and volume which had ultimately impacted all the service providers in the cold chain. He said these risks were best insured by specialist brokers who catered individually to the shipper, their risk profile and requirements.
“Specialist brokers like JLT Marine would place the risk with specialist underwriters, who are very familiar with such risks and the related industry,” said Ugarchund. Where cover was restricted due to the high costs of insurance and risk mitigation, he said that JLT had assisted numerous shippers in the perishables industry to manage their risk and insurance costs and still remain economically viable Ugarchund pointed out that for an insurance solution to remain sustainable there had to be “concerted and ongoing” efforts to manage risks and implement loss control measures throughout the cold chain.
Some of these measures include placing independent temperature recorders in the container in optimal positions to record the delivery air temperature (DAT) and return air temperatures (RAT) which would highlight the cause of a temperature variation.
Ugarchund also suggested that shippers could invest in technology solutions that allowed full transparency during the movement of goods, where there was real-time monitoring of movements and temperatures, prompting immediate corrective measures when there were unexpected deviations.
“Furthermore, while the Perishable Products Export Control Board (PPECB) inspections and protocols are robust minimum requirements, perishable producers should also consider implementing independent rigorous quality testing of goods from the tree through the packing line, cold storage and packing of containers.”
He said this would ensure that the goods shipped would endure the perils of the subsequent export/ import process – such as refrigerated multimodal transport, cold storage, sorting/ packaging – where temperatures and timing were key factors.
“Where possible, shippers should enter into service level agreements (SLAs) and actively monitor service deliverables with logistics service providers,” Ugarchund said.
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Perishable producers should consider implementing independent rigorous quality testing. – Bimesh Ugarchund
