- Marine Protect
Cargo liability and extreme weather: What you need to know
With Australia facing a La Nina weather event, the likelihood of extreme summer weather events, from flooding to cyclones, is high. La Nina brings wind and rain, and thanks to climate change its effects are expected to reach further south than ever.
As a result, your cargoes may be at risk (as well as your fleet, premises and plant). As a transport and logistics operator it’s vital to be aware of all your risks and to take action to mitigate them. The key to risk management is preparing your business before incidents occur.
What, then, can you do to protect the cargoes you’ve been entrusted with by your clients?
Protecting cargo on the move
There are different incidents and preparations to keep in mind. “First there are the little things”, says Mike Sullivan, NTI’s National Manager, Marine Claims Relationship and Technical, “like tarping loads on the back of a semi-trailer or an open top container”.
“Torrential rain over extended periods is going to find holes. Tarps are weatherproof, not waterproof. So, check your tarps and make sure there’s no holes. Or double-tarp everything.
Wooden pallets can also cause problems, says Mike. “If they get saturated then they’re going to take their water with them, and they then become a source of moisture in the cargo. So when you get to the other end for delivery, it’s a little bit damp, a little bit moist and it’s rusted or it’s soft. It’s damaged.”
But the major preparation you can take to protect cargoes in transit is route planning.
“If forecasts indicate you’re going to have flooding you’d better start thinking about changing your route”, Mike says. “We had a report of someone who had to divert around a flooded area and it became a 900-kilometre detour. It cost about $8000.”
“So, if the forecast says there could be an issue, look for another route because if you go halfway then have to double back and go another way, it’s going to cost you a lot of money.”
Drivers should also be prepared; if there’s a foreseeable risk that a run might be delayed, then they should have some basics with them. Beyond toiletries they include changes of clothers, phone chargers, a book or two and at least a day’s food.
Most importantly of all, if the rains do come down drivers should feel confident in making a decision to stop, divert or delay their trip; it’s better to be stranded in a town or truck stop than being isolated (and at risk) on the side of the road or in a remote rest bay.
Protecting stationary cargo
Weather events are a significant risk to facilities and any cargoes they’re holding. If your depot is in a flood’s way, you can’t move it somewhere else. The challenge is that, “in the event of a worst-case scenario – and weather events tend to cause worst-case scenarios – they don’t cause small bits and pieces of damage,” says NTI’s Daniel Morrison, NTI’s National Cargo Product Manager.
“You have to monitor and manage your infrastructure exposures, and make sure you’re adequately protected.”
You might not be able to re-locate your depot or build a new one in a safer spot. But you can minimise risks by, for example, moving cargoes, plant and equipment that might be damaged out of the way ahead of the weather.
You might also need to move your fleet and any trailers, including their cargoes. As with drivers on the road, it’s best to make the decision early. That will help you avoid risks around sites already being occupied. Or roads being so congested or weather affected that you can’t get to the safe space you had planned.
Managing cargo liability
We always urge cargo owners to insure their loads for damage to cargoes, as transport operators carefully manage their liability for damage that they may cause.
“In Australia, logistics companies typically give you a consignment note that says ‘we’re not liable for anything that happens’, but things are changing”, Daniel says. “Because how can you not be liable for goods in your care?”
On the transport operator side, it’s wise to look at your cover. Speak to your broker, but in addition to a fleet policy, you should consider a carrier cargo policy of your own. Carrier policies cover costs such as clean-up after a spill or incident, in addition to damage to cargoes where the transport operator may be liable.
That’s why NTI urges transport operators to understand their liabilities and manage their exposures.
“It’s about supporting your customer as much as you can,” he says. “We offer risk policies for operators that want to offer extra assurance.”
Get your plans in order
When it comes to protecting your cargoes (and your business), planning and communication are the keys. “It’s all about having the right mindset around risk and risk management. And it’s one thing to have a plan, but it’s wasted if your staff don’t know what to do”, says NTI’s Kurt Herron, Logistics Risk Engineer – Marine.
“You’ve got to understand your business and look at your operations internally. That means making sure your business continuity plans and emergency response plans are up-to-date.
“If you’re looking at a weather event in the face and you’re just deciding what to do, it’s too late.”
In addition to having procedures in place to protect cargoes from extreme weather, Kurt’s chief advice is to keep a close eye on the forecast. Bookmark the Bureau of Meteorology website and check it at least every morning. Also, look up your state and local government websites to stay on top of any warnings or advisories they’re issuing.
We all know you can’t control the weather – but with foresight, planning and preparation, you can certainly manage it, and keep your precious cargoes safe.