Risk and Loss Prevention within the Transport Chain

Transport and logistics operations are vulnerable to many types of risks due to an increasing dynamic and structural complexity of today's supply chain networks. Global distributed sourcing and production leads to more transported goods in general but also to more high value cargoes being shipped around the world. However, detailed information about the transport condition and integrity are not available in the end-to-end chain as e.g. a sealed container can be considered as "black box". In this paper we firstly analyze claims data from one of the largest transportation insurance providers in Europe. The sample consisted of 7,284 claims made in the recent four years (2005 – 2008) as a result of incidents in transportation. Through a variance analysis, we demonstrate differences among industries in terms of average losses, transportation mode and premium coverage. Secondly, based on these findings an active risk management framework will be developed using sensor-telematics and localization technologies to increase visibility and transparency in supply chain operations fitting industries' current needs. Findings from this paper provide facts on how prevention can be implemented in logistics. The results give practitioners in the supply chain management and marine cargo insurance industry a deeper understanding of current transportation risks and how to address them by creating innovative valueadded services to differentiate logistics and insurance solutions effectively from competitors.