Supply Chain Risks Emerging Threats Michael Yarwood – 02/12/2015
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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
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