Drama or day-to-day

Time pressures, poor maintenance, human error – these are the factors that are often most likely to stack up to accidents, insurance claims and higher premiums for ports and terminals, and they are the factors that underwriters are watching.

It’s not a case of one big claim and the port faces huge increases in their premium, says Rob Cook, transport and regional marine manager at RSA. “Depending upon the circumstances of the loss, a large claim need not have a substantial impact on the insured’s premium” he says. “The activities undertaken, type of cargo handled, location, approach to risk management and loss frequency and type are equally, if not more, influential than a single large loss. The best way to keep the price of cover down is for the insured to invest in and exhibit excellent risk management practice.”

Mr Cook says that although the level of automation is continuously increasing in the port industry, human error is and will remain an important cause of accidents. “Recent fatal accidents in several European ports are a sad proof of this,” he says.

RSA recently produced a report entitled ‘Pressure to perform: work pressures leading to dangerous driving’ – and the conclusions in this report can easily be translated into the ports sector.

“High time-dependent workload combined with an inadequate adherence to regulatory requirements can create an environment where claims are more likely to occur, especially if one takes into account the dangers brought about by the interaction between humans and heavy machinery,” says Mr Cook.

Also, time pressure can be an important contributory factor to accidents, he says: “It is therefore vital for each port operation to strike an acceptable balance between efficiency and safety whereby safety issues are never compromised by the need for increased efficiency.”

Having said that, there is no doubt, he says, that the increased awareness of and attention given to health and safety issues have led to an overall improvement in terms of bodily injury claims in many ports.

David Lumby, the TT Club’s deputy director of underwriting, says: “You do sometimes get a single big incident and there is not always a way to stop things happening. But if that is the only claim, we would not necessarily take it as representative of what we have next year, especially if it’s a natural catastrophe type event. Look at the Workington floods – it wasn’t their fault, they couldn’t have done anything about it other than build the port in a different place.”

What TT Club generally looks for is an underlying pattern or something indicative of a particular practice, and that would impact on the premium, says Mr Lumby.

A specific area of concern is in straddle carrier operations, according to the TT Club. “These are quite high-value devices – perhaps $1m – and if they roll over because of a collision with another device or piece of equipment in the port, they are usually a write-off – and the driver is typically quite seriously injured or killed.”

Certainly training – and regular training – is important, says Peregrine Storrs-Fox, risk management director at the TT Club. “Also, in terms of the equipment, we would certainly be recommending that they have monitoring systems checking vibration, speed, etc., so that they are right on top of particular drivers who might be doing things that are unsafe.

“It may be business, it may be momentary lack of awareness of concentration, and it can purely be because of the nature of the equipment – because there are blind spots in straddle carrier operations which can make it impossible until too late to see that surveyor in the container yard. Having a person or added risk in the container yard should be alerted to the straddle carrier drivers anyway. These are large, unwieldy pieces of equipment.”

The TT Club is also concerned about the increasing sophistication – and, therefore, cost – of ship-to-shore gantry cranes. It encourages ports to install electronic sensor systems to prevent such cranes from colliding with each other or with a ship’s superstructure. “These systems are growing in popularity and we do what we can to support that by giving preferential terms to ports which actually put in such systems in the manufacturer’s recommended fashion,” says Mr Storrs-Fox.

Overall, ports’ property and equipment value continues to increase and, as he points out, some large ports now have a very high number of these expensive gantry cranes.

“The price per gantry crane is going up as they become bigger and more sophisticated – it won’t be long before they are coming in at $10m each. So at a terminal with 30 cranes or more – for example, some of the Chinese ports – the number of cranes in one location is absolutely phenomenal and a natural catastrophe event would have very serious consequences.”

Meanwhile, good old-fashioned virtues like looking after your kit remain important. The TT Club says a key reason for recently publishing a new maintenance handbook for non-engineers was the “identification of maintenance issues as a recurrent contributor to costly insurance claims both for catastrophic as well as attritional claims”.

Its own analysis shows that, in the port and terminal industry, attritional claims resulting from inadequate or incorrect maintenance procedures cause about 25% of the cost of equipment damage. Also, about half of quay crane claims from catastrophic weather issues, where cranes are blown along their rails, are exacerbated by poor maintenance of gantry motors or brakes. “Poor maintenance should clearly be a prime concern to those aiming for the optimum performance of their assets,” said the Club.

The TT Club continues to emphasise the best tie-down procedures for cranes when a storm is approaching, the need to make sure everyone is aware of the procedures, and the importance of ‘good housekeeping’ to ensure the port can get up and running again once the storm has passed by.

Traffic management is another issue of great interest to underwriters – TT Club urges that a port should avoid bidirectional traffic where possible, as such systems have dramatically reduced the risk of incidents.

“Obviously maintaining a good separation of humans and machines in the port area is another fairly basic thing we can advise on,” says Mr Storrs-Fox.