Thursday 20 November 08 - 08:29
 

Insight & Opinion

Dealing with a severe case of the bends

A particularly tricky operation at a port - we had better withhold its identity - was beginning to get a reputation as akin to a ride on the wall of death. Drivers of straddle carriers were required to negotiate a ramp and manoeuvre into a 90 degree turn. They tended to take it at such speed as to flip over the carrier, often damaging the vehicle and putting their own lives in danger.

Port officials sought to reduce the danger by painting a white line as a reminder of the hair-raising bend, all to no avail. Eventually, the drivers' careless practice was brought to a sharp halt by a simple means: a camera was installed to identify any offending driver.

Training and safety has leapt to the top of the agenda for insurers, as claims values rocket in line with today's costly cargoes and equipment. An even greater worry, in financial terms, is the rise in the cost of bodily injury claims, especially in the US.

Underwriters are looking beyond the obvious need to enhance the education of executives and front-line workers, to port systems themselves. Risk management is being applied on a macro, as well as a micro scale. Ports in North America and elsewhere tend to farm out as many operations as they can to sub-contractors, making it difficult to maintain control of the detail. It will depend on the nature of the relationship as to which side of the bargain is liable for claims in a series of areas.
Ports and terminals that fail to manage their procedures well will not only find themselves facing claims - a growing burden in these days of rising deductibles - but are likely to find it harder to resist demands for dearer premiums at renewal, albeit currently rating is generally on a downward drift.
Weaknesses in port working arrangements have shown up in many countries, and problems have been prolific surprisingly in what ought to be the most efficient of countries, the US, Belgium and Spain.
Trouble is seen as stemming from the pool labour system, under which workers can be assigned to a particular terminal for, say, three days a week, and then switched to another. This makes it difficult for the individual to keep up with new rules, or the training needed for new pieces of equipment, opening the potential for accidents. The leading insurer, TT Club, recently ascribed 72% of quayside claims to human error.
In the US, this is quite a political issue, for although many agree that the labour system is due for reform, it means bargaining with the unions who seek to cling to their hard-won longshore benefits.  Insurers report that there are more accidents in heavily unionised workplaces.
The straddle carrier story shows that it is quite simple to eradicate losses, but the cost of decasualisation can in the first instance be financially costly and disruptive, as was the case in the UK more than 30 years ago. Now British ports are considered a model of labour relations, and relatively loss-free.

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