The management of a logistics chain encompasses not only transportation activities, but also the management of risks of the main suppliers of production processes – the suppliers of suppliers, their internal processes, insurance policy, etc., albeit by force of contracts and procedures.
Therefore, Cargo insurance is essential to support the continuity of the logistics activity.
It protects the cargo owner’s property; whilst another type of cargo insurance provides cover for liability of third parties involved in the transportation of various cargoes, on various routes – modes de transportation, regions, etc.
Risks are always present during the whole logistics process, with greater or smaller intensity and predictability. At this point, insurance provides support to company activities, it indemnifies the most varied damages and losses, incident and recurring, as far as cargo logistics and transportation are concerned, both at the domestic and international level.
The objective of logistics professionals is to deliver products with speed and quality, and to surmount the challenges posed by transportation, warehousing and reduced costs. Moreover, these professionals must consider insurance costs and the placement of a policy that is adequate for their activity.
The placement of adequate insurance for logistics and warehousing activities is of utmost importance, as in the unfortunate occurrence of a loss, property belonging to the company and third parties will be at risk – and the placement of an inadequate insurance policy or the lack of insurance can generate catastrophic damages, which exceed financial losses, such as difficulty in ensuring continuity of the company, and loss of market.
In addition to the placement of insurance policies tailored to the characteristics of the segment, it is also necessary to understand and put in place a Risk Management framework, including loss prevention programs, and a contingency and crisis management plan.
Nowadays, the placement of insurance for the logistics segment is critical, for two reasons:
- Legal obligation, with heavy fines for non-compliance;
- Cargo robbery rates have already soared to alarming levels. In Brazil, more than 52 cargoes are robbed every day.
It is precisely the “cargo robbery” factor that determines one of the trends of the insurance segment. Due to the volume of cargo robberies in Brazil, insurers are increasingly proposing tighter Risk Management rules. Therefore, an investment commensurate with the scale of risk - which depends on the type of product transported, value of shipment, transit region, times of day etc. – is a marked trend in this sector.
CredRisk Marine is specialized in Risk Management Consulting services, and can help you and your company to take appropriate measures in various situations, such as, for instance:
Supply chain improvement projects
Risk identification
Revision of all policies
Loss adjustment
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