managing global shipping risks presented by greg j. kritz, cic vice president sctic may 27, 2008 ...
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Managing Global Shipping Risks
Presented by
Greg J. Kritz, CICVice President
SCTIC May 27, 2008 www.roanoketrade.com
USA England Ireland China Singapore UAE Germany
3. Control the Risk
*Avoid It *Prevent It *Reduce It
U.S. Cargo Losses Exceed $18 Billion Annual Impact on U.S Economy
4. Finance the Risk [how you’ll pay for bad stuff when it happens to you]
* Transfer the risk to an Insurance Company* Retain the risk [self-insure]
Examples of Today’s Shipping Risks
CyclonesDelayProduct Recall Non-paymentEarthquakesInclement WeatherTariff Retaliation
Currency ValuationCargo TheftRegulatory SeizureEnvironmental Hurricane/MonsoonPolitical (Nationalization)
Extremes in Temperature
Ocean Carrier/NVOCC
Subject to terms of Carriage Of Goods by Sea Act (COGSA)
$500 per Customary Shipping Unit as described on OBL
Unit can be the container, a pallet, a crate, carton
International Air & Indirect Air Carriers
Subject to terms of the “Warsaw Convention”
$9.07 pound/$20 Kilo or 17 SDR Kilo if Montreal Protocol ($25 kilo)
Distribution Centers & 3PL Facilities
• Warehouseman’s Terms & Conditions
Rule Unless Changed by Contract
• Liability Typically a multiple of base rate
• 3PL’s and Forwarding Operations Often Limit Liability on Warehouse Receipts
• Reasonable Care Standard Applies
LOSS of BUSINESS INCOME:
IMPORTERS NIGHTMARE
A Property Insurance Policy Doesn’t Cover Loss of Business Income for Cargo Claims
What if these wereYours’ at Peak Season? $30M
CARGO CRIME SOARING
Theft & Unexplained Shortages (shrinkage/Leakage)
4 Easy Ways to AccessAn Ocean ContainerWithout Leaving a Trace
273 Hurricanes Hit USA1851-2005
92 Were Major Category 3,4 & 5
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