The escalating voracity of freight looting – the theft of goods off the back of fleet vehicles, sometimes while moving – was highlighted in a recent Carte Blanche insert. This criminal act has massive financial repercussions for the fleet and insurance industries, and ultimately the consumer, and is expected to intensify in the run-up to the festive season.
According to Noah Appalsamy of insurance brokers and risk advisors, Aon South Africa, the number of reported incidents is expected to increase in the build up to the festive season when more vehicles, with high-value freight will be on the roads. ‘Typically items such as small appliances, liquor, tobacco and electronics were targeted however recent developments show that anything from fresh vegetables to petrol to entire lounge suites are easy pickings – even from a moving vehicle. It’s a very worrying trend when you consider that an average load could be worth R350k and more,’ says Appalsamy.
‘The losses incurred from looting directly affect the bottom-line of the entire retail industry, and ultimately will impact on the consumer. Transport operators are investing heavily into additional security measures to get goods from A to B, including armed escorts, which is pushing up transportation costs,’ says Appalsamy.
The modus operandi of these attacks varies between well-organised hits carried out by armed gangs, to opportunist attacks where vehicles that have broken down or are stationary are mobbed by a crowd, and stripped of contents in a matter of minutes, leaving drivers at huge risk of attack and law enforcement officials completely outnumbered.
‘Consequential losses and trade disruptions as a result of such incidents are a huge risk factor. Salvage operations, if at all possible, take time, which leaves businesses exposed to hefty profit losses if their cargo and fleet vehicles are not properly insured. There are also considerable liability exposures for freight operators who take responsibility for such cargos, as well as the safety of drivers,’ says Appalsamy.
‘Given the quantum of risks that can befall valuable cargo while in transit, it is essential for fleet operators and cargo owners to get specialist risk advice on how to manage the risks, and the implications these have for business interruption and the cost of insurance. A comprehensive risk assessment will aid in identifying methods to reduce the exposure to such risks, as well as the best-suited insurance cover for the business to protect against potential losses, consequential business interruption and ultimately, reputation,’ he adds.
Aon offers the following risk management tips for fleet owners in the run-up to the Festive Season:
- Identify and avoid travelling through high risk areas by using alternative routes where possible. Speak to your insurance broker or insurer as they will have claims data to identify problematic hotspots.
- Keep information about the type of goods being transported on a ‘need to know’ basis as far as possible.
- Use unbranded distribution vehicles, as branded fleet vehicles often give an indication of the type of load that’s being hauled.
- Equip your drivers with knowledge and training of how to respond if caught up in a looting situation – ensure they are in constant contact and monitored for swift response to an emergency situation.
- Use closed containers or install diamond wire mesh on tarpaulins to prevent easy slashing – Looters can typically only cut a certain amount before the knife gets stuck which makes it more difficult, buying the driver some precious time.
- Make sure that each load is correctly insured and that all parties involved are clear on where the liability lies as far as cargo is concerned, whether it be the supplier, haulier or the owner.
- Use armed guards / security to accompany high-value cargo in a convoy.
- In some instances of looting, actual fleet vehicles are also damaged due to slashed tyres, broken containers or even accidents that may occur during an in-transit looting incident. Make sure that your commercial vehicle cover is up to scratch and consider business interruption insurance to ensure that your business can survive a worst case scenario.
- Speak to your broker or insurer to confirm whether there are any restrictions on your policy or exclusions on specific routes that are being utilised.
- Confirm how your policy will respond in a cross-border incident.