TT Club: Port Terminals the Weak Link in Global Supply Chains

Image Courtesy: TT Club

As pivotal hubs within global trade, container ports and terminals face risks that have potentially serious consequences for international supply chains, according to TT Club, insurance provider to the ports, terminal, transport and logistics sector.

“Port terminals are often seen as the weak link in global supply chains. Clearly as cargo shifts from one mode to another and is stored for a period of time, operationally it becomes more susceptible to risk. Greater preventative measures must therefore be employed here.

“This is particularly true in the Middle East region where rapid trade growth and aggressive port expansion continue at rates higher than in other parts of the world,” said TT Club’s Julien Horn, at a recent speech to the TOC Middle East Conference in Dubai.

He highlighted the lessons to be learned from recent incidents such as the explosion at Tianjin and the increasing occurrence of cyber crime at port facilities.

Fire and theft consistently lead the list of causes in TT Club’s on-going analysis of claims it receives, which is used as a focus for loss prevention in relation to the damaging consequences to life, property, supply chain stability and business reputation, being a primary role of the insurance provider.

Recent IMO statistics point to some 15% of dangerous goods shipments being in some way deficient in safety measures and the declaration, packing and handling of such cargoes must be of primary concern to terminal operators.

Horn cited a number of problems in need of attention, including poor practices for cargo segregation, lack of adequate storage facilities for dangerous goods, inadequate training in sound practice and lack of coordination with fire and rescue services.

With regard to the escalating incidence of cyber crime, Horn said that a “PwC report in 2013 revealed that 11% of companies worldwide lost over US$50,000 as a result of cyber crime and there is evidence that the peril has become much worse over the last two years.” 

Reliance on IT systems for data storage and communication will not diminish and the supply chain by its very nature is more exposed than other areas of commerce to such risk.

“In common with prevention of all operational risk, our advice to combat such threats…includes a constant awareness of the dangers of infiltration into IT systems, vigilant data protection, careful staff background checks and training, planning for the consequences of a compromised system and immediate reaction to such an event,” Horn said.

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