News

Port risk in times of pandemic

The seaport is one of the main commercial doors of a country. It is estimated that more than 80% of all internationally traded goods are transported by sea.

It is undoubtedly an important part of the global economy. The fact is that in the 1970s, according to data released by international port authorities, the volume of transportation was approximately 2.6 billion tons. This number currently exceeds 12 trillion tons.

With the new Covid 19 outbreak, ports around the world in response to the pandemic have implemented measures since January of this year to prevent and reduce contamination as much as possible, protect their employees and keep operations running.

The good news in Brazil is that operations are running in compliance with all prevention measures. And the monthly movement has increased in important ports like the Ports of Paraná and Rio Grande do Sul. The largest monthly movement in the history of the Ports of Paraná was reached in May this year. The volume was 44% higher compared to the same month in 2019.

With the growth of the sector accompanied by the challenge of forecasting and reducing possible losses, it is natural to increase exposure to risk. It is a complex and significant operation. The companies’ risk committee has as one of its main responsibilities to satisfy all items related to possible catastrophic damages that can paralyze or even shut down the activities. In the current scenario, everything becomes more relevant. Risk management will have to be intensified, reviewed and adapted. Redesigning procedures, implementing new rules and streamlining processes are essential.

And even with the application of adequate standards, there are still major challenges to be overcome. The accumulation of goods in transit at a port or warehouse may exceed the limit of stored goods allowed by the insurance contract, while stocks are left idle awaiting their next destination. In addition to delays and / or possible suspension of port operations.  It is necessary to pay attention to the deadlines and limits of the insurance contracts. The moment requires understanding the proper exposures and how to manage them, so that, in a significant loss, any kind of impact is mitigated.

Simone Ramos is Superintendent of Ports and Logistics at THB Brazil

 

News

Related articles

The Brazilian insurance market: its modernization

In reality, there is still nothing new to announce. Perhaps, the exceptions are the provisional suspension of Resolution 382 and the simplification of mass-market insurance that is still under public consultation. Other points more under analysis, but these two are the ones that affect the most, in fact, insurance brokers in general.

See More