Analysis from the London-based TT Club, which provides insurance and risk management services for transport and logistics companies, said its latest research has found that human error is the key cause of supply chain claims.
TT Club said it researched claims totaling more than $120 million during the past six years and found that almost 80 percent of the incidents resulting in claim were “avoidable.”
“The vast majority involved some form of human error,” Laurence Jones, TT Club’s director of global risk assessment, said at the TOC Container Supply Chain Asia forum in Hong Kong. “Relatively small investments in training and maintenance could bring significant commercial benefits through less disruption to operations, lower insurance premiums, and more satisfied customers.”
Jones said the company found that the overall claims breakdown, in terms of cost, was 63 percent from operational causes, 33 percent from maintenance (or lack thereof), and that 4 percent were weather-related.
Supply chain-based claims are expected to continue to rise, he added, because as systems become more complex there is more room for human error.
The TT Club also will detail these concerns when it releases its annual results on April 16, including a more in-depth look at related problems such as theft and operational missteps.
The Club has four underwriting centers in London, New Jersey, Hong Kong and Sydney, plus a network of claims offices in sixteen countries.
Jones’ presentation will be made available on the TT Club