Transporters of perishables should look further at loss prevention, says expert

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TORONTO, Ont. — Operators dealing with the transport of perishables should adopt more disciplined loss prevention strategies, says David Heather, a perishable trade expert.

Heather, a consultant to the TT Club, a specialist liability insurer for the international transport and logistics industry, says low profit margins in the “cold chain” (the supply chain for perishable goods) mean that the value of transport equipment is a particularly critical factor.

“If claims and losses are not kept under control the high cost of insurance combined with secondary, uninsured costs will have a directinfluence on the profits of the operating company,” says Heather.

Heather puts forward a seven-point strategy of disciplines and actions, which he says companies should use to help mitigate loss and as proof to insurance companies that they are a good risk. Significant points in Heather’s plan are: recognition of high-risk operational areas and contingency plans to cover these, acceptance of a level of self-insurance through deductibles and a correct assessment of equipment values.

Heather says that the trend to over-value refrigerated containers for insurance purposes by operators needs to be reviewed.

“A good example is a 40 ft reefer container, which appears on claims as having an original new value in excess of USD28,000. This is the value on which premiums are assessed. However, for the last four to five years the new built cost for a 40ft reefer has been in the range of USD18,000 to USD20,000. If the high value is used, it is a de-facto 30 to 35% increase in value as compared to original purchase value,” he says.

Heather also emphasises the importance of team efforts in mitigating the losses and claims arising.

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