Strike teaches perishable industry valuable lessons

An increased awareness of
the need for adequate risk
insurance was one of the
positive outcomes of the
17-day Transnet strike which
brought shipping operations at
all SA ports to a standstill in
April this year.
And while Bob Child
of Aon admits to precious
little knowledge of
strike mechanisms, he
was encouraged by the
resilience of South African
fruit exporters during the
shutdown.
The recently retired Aon
South Africa director, who
is back in the saddle as a
consultant with one of the
world’s premier risk insurance
groups, lauds the manner in
which the fruit industry rose
to the occasion in the face of
adversity during the debacle.
A sentiment wholly
endorsed by Drew Moll,
Aon’s marine manager in
Cape Town.
“A lot of exporters have,
as a result, come to realise
where their cover was, or was
not, and that they may not be
adequately protected.”
If not handled with the
utmost care for the duration of
the logistics chain, from the
time of harvest to the sparkle
on a New York or London
supermarket shelf, it could go
horribly wrong for grower and
exporter.
Which is why fruit risk
insurance cover is probably
amongst the most expensive
to be had, says Child.
That said, FTW wanted to
know from Child and Moll
why a financially sound fruit
exporter would need to seek
out-of-house cover?
“At the end of the day,
there’s a real financial risk
which the exporter could
incur even without physical
loss or damage to the fruit
– and therefore the risk to
profits,” said Child.
As Moll further explained,
a crucial aspect for fruit
exports is to meet the clock
as there are strict time limits
in the infrastructural chain,
which if not met can cause a
loss of profit.
In addition, a late arrival
for reasons beyond the control
of the grower/exporter,
such as a lengthy berthing
delay or on-board cooling
misadventure, may well
result in an advantage for a
competitor country – all the
more reason for adequate
insurance.
As brokers, Aon places
risk coverage with reputable
companies according to the
insured’s needs, ranging from
fruit to the fishing and ship
repair sectors.
The Aon Cape Town branch
insures some of the leading
fruit exporters in the country
with multi-billion turnovers
at stake.
The lion’s share of exports,
possibly 40%, is shipped to
the US, with the Far East also
an important market although
Africa remains a minor player
with no more than 10% of the
cake.
Says Child: “We have
over the years developed a
cover-related product which
goes beyond whatever else is
available in the risk insurance
business.
“The ‘R’ word (rejection
by overseas markets) is
a major concern for fruit
growers and exporters as it
is very difficult for them to
manage a situation thousands
of kilometres away. That is
where we come in.”