Supply Chain Risks - CIPS Speaker Prese… · Loss prevention opportunities established expertise 16 Prevention: − Need expert IT assistance − Educate staff – awareness of risks

Supply Chain Risks Emerging Threats

Michael Yarwood – 02/12/2015

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Contents

TT Club Introduction 03-04

TT Club Claims Experience 05-06

Cargo Theft 07-11

Emerging Risks 12-25

Conclusions 26

SOLAS Chapter VI amendment 27-28

2 established expertise

Contents

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Pull out statistics

established expertise 3

Pull out statistics

745 A- (Excellent) Members Strong capital position equivalent to A++, highest

rating on AM Best capital adequacy model.

96.3% 90% Combined Ratio Member retention

$182.3 $98.4 Gross Written Premium (m) Gross Paid Claims (m)

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Our Partners

established expertise 4

Our Partners

TT Club Claims Experience

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Top 5 claim cost issues 2010-2014

6 established expertise

Cargo Theft in the Supply Chain

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Theft issue insurance costs

established expertise 8

48%

23%

8%

6%

5%

2%4%

4%

Theft in transit - contractor

Theft from member's premises

Stocktaking loss

Theft in transit - member

False paperwork

Theft from contractor's premises

Containers non returned

Theft in transit - vessel pirates

Other or unknown

Seal intact

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Cargo theft - level of risk by country

established expertise 9

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Theft in transit

54% of theft costs occur in transit

Prevention:

Send trucks in convoy

Only stop at approved truck stops

Do not leave truck unattended

Alter routes on regular deliveries

Only use approved transport contractors

Use GPS tracking devices

Share bad experiences

Use available tracking and locking technologies

10 established expertise

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Overnight Parking

established expertise 11

Emerging Risks

Cybercrime

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Currently Trending

Web based theft & Cybercrime

Developments in IT capability

Growing reliance on IT systems

Online freight exchanges

Increased sophistication

Identifying the weakest link

14 established expertise

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Freight Exchange Platforms

Freight Exchange Platforms

Due Diligence

Know your subcontractor

Perform background checks

Approved supplier list

Validate information

15 established expertise

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Loss prevention opportunities

16 established expertise

Prevention:

− Need expert IT assistance

− Educate staff – awareness of risks and risk policies

− Adopt risk culture driven from management

− Humans are strongest and weakest link

− Recognize the value of your data

− Perform risk assessment

− Identify and fix deficiencies – procedures, hardware and software

− Need to recognize when systems compromised

− Continuously updated hacking and spyware detection software

− Ensure physical security of IT systems

− Ensure vigilance and due diligence in day to day operations

Mandate Fraud

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Mandate Fraud

18 established expertise

Mandate Fraud

Payment Diversion

Fraudulent email addresses.

Requests for alternative bank

accounts to be used.

Highest risk during very busy

periods.

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Mandate Fraud

Loss prevention strategies

Awareness

Education

Perform Due Diligence

Verify instructions by phone

19 established expertise

Smart Containers

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Smart Containers

Smart Containers

21 established expertise

UAV/ Drone Technology

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UAV/ Drone Technology

UAV/ Drone Technology

23 established expertise

3D Printing

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3D Printing

3D Printing

25 established expertise

Conclusions

SOLAS Chapter VI Part A Regulation 2

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Focus on ‘Shipper’

established expertise 28

The regulation requires…

Obtain VGM

Communicate VGM

‘Sufficiently in advance’

What needs to be considered…

Who is the ‘shipper’

How best to ‘obtain’ VGM

(a) Method 1

(b) Method 2

What is required for effective communication

(a) between consolidated/co-load partners

(b) shipper carrier terminal

What deadlines apply

Contractual provisions

Cargo types

Michael.yarwood@thomasmiller.com

Thank you Any questions?

www.ttclub.com