The top risks facing marine risk managers

THOUGHT LEADERSHIP

Container ships have revolutionised business and made the world seem like a much smaller place. However, there is that the dangers of open water could be forgotten in the rush for growth.

It seems so easy to transport items thousands of kilometres across the sea. However, the sea is just as dangerous as it always has been. In fact, climate change means that even more extreme weather risks are emerging.

Risk managers need to acknowledge this fact. For instance, internet footage of container ships ploughing across the North Atlantic in winter are good reminders of how fragile marine transport can be. Sinking, stranding, rough weather or general average could have disastrous consequences to a just-in-time supply chain.

In addition, manufacturers are building bigger ships that can aggregate enormous amounts of goods on a single vessel as well as in ports.

In order to mitigate the risks related to marine transportation, risk managers need to look at their coverage, ensuring they have proper covers in place and the claims experts on side who can help them if the worst happens.

In this environment, excellence in risk management is vital and partnering with an insurer able to offer good advice is essential, especially when expanding overseas.

For example, many companies have recently increased the scale of their operations in Latin America, where the risks of violent theft and other cargo losses has also increased.

However, ACE’s strong presence across the region providing risk management and loss prevention advice represents formidable added value to help our clients.

Furthermore, having good insurer support can make all the difference in negotiating tortuous ‘general average’ claims; when the captain has to sacrifice some of the containers on board to save the ship, then that loss is shared by all those with goods on board.

In these circumstances, working out who pays what is complex and time consuming; and with larger and larger ships, these claims will become even more complex in future.

Nowadays, risk managers need to know their risks. They need to ensure they have the right solutions and claims handlers who really know this business and are properly equipped to engage on their behalf.

Only then is it really safe to set sail.

By Benoît Chasseguet, marine manager, Continental Europe & CEE, ACE Group