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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 goods traded internationally 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 transported volume 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 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 the operations are in operation, meeting all preventive measures. And the monthly movement increased in important ports like the Ports of Paraná and Rio Grande do Sul. The biggest monthly movement in the history of the Ports of Paraná was achieved 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. One of the main responsibilities of the companies’ risk committee is to satisfy all items related to possible catastrophic damage that can paralyze or even end 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 appropriate 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 stationary waiting for their next destination. In addition to delays and / or possible suspension of port operations.  It is necessary to pay attention to the terms and limits of insurance contracts. The moment requires understanding the appropriate exposures and how to manage them, so that, in a significant loss, any type of impact is mitigated.

Simone Ramos is Superintendent of Ports and Logistics at THB Brazil

 

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