TT Club urges perishable transporters to reduce losses
The Through Transport Club, through a consultant, David Heather, retained by the club, has warned companies transporting perishables to adopt more disciplined strategies to prevent cargo losses.
“If claims and losses are not kept under control, the high cost of insurance combined with secondary, uninsured costs will have a direct influence on the profits of the operating company,” Heather said at the Intermodal Transport & Logistics Conference in Rotterdam.
Heather cited the case of a U.K. milk and dairy produce distribution company that suffered costs of insured and uninsured losses equal to 1.8 percent of its operating costs in one year. Because of low margins, those losses equated to 37 percent of the company’s profits.
The trend to overvalue refrigerated containers for insurance purposes by operators needs to be rethought, Heather said.
In what the TT Club calls the 'cold chain,' a supply chain for perishable goods, the value of equipment is a critical factor in setting premiums.
“A 40-foot reefer container may appears on claims as having an original new value in excess of $28,000,” Heather said. “That is the value on which premiums are assessed. However, for the last four or five years, the new-built cost for a 40-foot reefer has been in the range of $18,000 to $20,000. If the high value is used, that’s a 30 percent to 35 percent increase in value as compared to the original purchase value of the reefer unit.”
The U.K.-based TT Club provides insurance and related risk management services for transport and logistics companies. +