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Marine Insurance
Friday, February 5, 2016 - 03:16
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The marine cargo industry in Africa is set to enter a boom period over the next few decades.  South Africa’s ports showed steady growth of marine cargo over the past year. The marine cargo industry therefore offers great opportunities to countries and importing and exporting companies, but the risks must be understood and planned for in advance with proper marine insurance.

This is according to Karen Miller, Executive for Corporate & Niche at Mutual & Federal, who says: “Statistics from the Transnet National Ports Authority in South Africa show that over 19 million tonnes of cargo was handled in South Africa’s eight commercial ports during August last year. This figure is just over 2 million tonnes more than for the same month in the previous year.

“In addition to this, the International Transport Forum (ITF) Transport Outlook estimated that intra-African trade would grow by 715% over the next 35 years to 2050. The ITF also expects international freight transport volumes to grow by 200% over the same period. The importance of insuring this sector is therefore indisputable.”

Miller adds that, according to the International Chamber of Shipping, the international shipping industry already carries over 90% of world trade. “With South African importers and exporters handling millions of tonnes of cargo via sea every month, amounting to a value of billions of rands, it is crucial that these businesses fully understand the major risk factors involved in the transport of marine cargo to ensure they are adequately covered in the event of theft, loss or damage to cargo.”

Miller says marine insurance is a highly specialised area requiring a high level of skill and competence, with challenges such as poor weather, changes in climatic conditions, poor infrastructure, delays at border posts, legislation that differs from one country to another, crime, corruption, and incidents at sea including machinery breakdown, collision, sinking and piracy.

“It is therefore important for those in the import/export industry to have sound insurance cover in place, due to the many risks of transporting goods overseas. Companies also need to be fully aware of all the clauses in their insurance policies, and should take all feasible precautions to protect their goods. They should for example exercise proper control during the packing of cargo; making sure there is adequate supervision during the loading, storage and unloading phases; and plan the route of the voyage with the services of a reputable carrier who understands the requirements and protocols of international trade.”

Miller says that Mutual & Federal provides peace of mind to importers and exporters, with far-reaching implications. “Cargo ships are obviously very vulnerable to severe weather, with regards to physical damage caused by storms and damage because of delays even when the ship safely navigates bad weather. Using the services of a specialist marine insurer is therefore the best way to mitigate the chances of any financial, reputational or legal consequences with the transporting of marine cargo. By enabling global trade to grow unhindered, proper marine cargo insurance helps to bring prosperity and economic activities to all corners of the globe.”
 

Copyright © Insurance Times and Investments® Vol:29.2 1st February, 2016
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