Making good on goods in transit

Road transport is the fastest, most flexible, economical and efficient means of transportation in South Africa. However, with the benefits come risks. Diederick Esterhuizen, Goods in Transit Executive at Heavy Commercial Vehicle Underwriting Managers (Pty

Vehicle
The type of vehicle used will determine the nature of the cargo or load that can be carried. Conversely, the cargo will enforce the way it should be carried, just by its physical attributes, such as is the case with liquids, glassware, fruit and vegetables and iron ore. From an insurer’s point of view, when dealing with a claim, one of the key considerations is whether the vehicle’s design and capacity is suitable to carry the load. Therefore, it is important to choose a vehicle appropriate for the load.

Cargo
There are a range of risks intrinsic to the nature of the commodity being transported. Coal is known to spontaneously combust in holds without adequate ventilation, and timber can become stained by a smidgen of moisture. Special consideration should be given to transporting hazardous goods, high-risk commodities such as alcohol, cellular phones, or copper, or anything that needs to be temperature controlled. Also, one should ensure that the load is valued correctly, as average will be applied to the detriment of the client should it be found that the load is under-insured.

Packing and loading
Insurance policies require goods to be adequately packed and secured for the journey. Packing, strapping, tarpaulins and ropes need to be in good working order, and the cargo must be adequately packaged and prepared for the rigors of the voyage.

Transporters should also take great care in overseeing the loading of the truck, as a number of asset policies consider transportation to begin as soon as the goods are first moved for loading. Transporters should be aware that they are liable up until the point that the goods have been off-loaded and delivered at the final destination.

Journey
The area where commodities are being transported also affects risk. Ensure that the insurance policy covers the repatriation or repair of goods and vehicles in all territories of operation.

The lengths of the journeys also need to be considered. The time in transit influences factors such as whether to temperature-control the cargo and the effect of road conditions on cargo, such as when glass is being transported for an extended period of time. Drive time per driver, night time driving and where the truck is stopped during the night are also underwriting factors that require consideration and may further be assessed at the time of a claim.

Additional considerations
Transporters picking containers up from ports and delivering them to clients inland must confirm with their clients the extent of their liability and where possible should align such exposure to the cover provided by the insurance contract. This may seem obvious until the claim occurs. Truck operators should not be held responsible for losses from indeterminable causes and certainly not in instances where the container picked up and delivered has the seals intact.

The conditions of the different policies of insurance, namely the truck and the cargo, should be studied by the owner and details of exceptions noted. Critical to the management of the risk is educating drivers of the relevant provisions of the policy, specifically regarding the conditions that are to be met on the occurrence of a claim, as they are the people that are first on the scene of the accident and, most likely, the persons alerting the authorities.