This Wednesday, September 21, the conference “Project cargo: new risks and challenges”, organized by Clyde&Co Abogados, was held at the Giner de los Ríos Foundation in Madrid. The conference analyzed the different commercial, political and natural risks that affect the project cargo sector in a post-Covid-19 world.
The day was organized in two round tables. The first addressed the issues from the point of view of project load planning and execution in the current context. The second round table focused on the insurance of these new risks (DSU in the current context of transport, strikes, replacement of goods and critical equipment, inflation and adjustments, etc.).
The highlight of the day could be summarized in that the sector has evolved in two years, as much as in two decades. The reasons are none other than the events we are facing: a pandemic, a war, inflation, logistics congestion and high energy costs.
The first of the round tables was moderated by Javier Hernández-Valenciano, from Clyde&Co, and included the participation of Igor MunizCEO of Erhardt Project Cargo & Logistics Middle East and CEO of APAC & MEATI; Luis González, Global Industrial Projects & Energy Solutions EPC & Infrastructure Expert, from Ceva Logistics, and Roberto Moriana, Compliance & Risk Iberia from DB Shencker.
Regarding the challenges facing the sector, the participants agreed that in this complex environment the “real” solutions are the “win-win” ones in which cooperation between customers and suppliers is the only way to balance risk and business. Thus, “the risks are so enormous that the price factor takes a backseat and you have to be very aware of what you sign, what you accept and what you risk,” they said.
“In this case, reliable partners with proven experience are essential. Not an easy task in a sector that constantly struggles to retain specialized and experienced talent”, which was another of the difficulties mentioned by the speakers.
On the other hand, the way of working has changed and foresight is now more necessary than ever. “Long-term planning has to be the norm, the market is saying goodbye to overnight trading,” the speakers recalled. “Identifying and understanding each and every potential risk on each and every link is the only way to operate today. In this sense, shippers are adapting and are already taking measures such as, for example, dividing shipments to diversify risk”, they indicated.
All the speakers agreed that another of the great challenges of the sector is digitization, “key for planning, transparency of operations and prevention of the risks that any freight transport project entails”.
“A sector that moves such high-value merchandise cannot continue working with email chains in which it is difficult to follow the sequence and know who is who in each link of the supply chain”, they pointed out during the presentation. In this sense, Igor Muñiz claimed “the need for everyone to work in harmony with the same tool, with the same documentation and information for everyone”. “The digital supply chain provides visibility into operations; it is about working with the same information so that all actors have the best possible visibility at all times », he pointed out.
The second of the scheduled roundtables at the conference dealt with project cargo security. This panel was moderated by Enrique Navarro, from Clyde&Co, and Fernando Sáez, from Willis, and Gonzalo Palomero, from Liberty, participated.
In the presentation, it was agreed that the underwriting of the risk of project cargo operations has undergone a great change, and where before the insurers and reinsurers discussed this type of contract, now they are more strict, they do not accept any operation and require comprehensive information.
The round table concluded that, also in the insurance sector, the times of price fixing are over. “Where before there were several parties interested in listing, now there are none. The risks are so enormous and the reinsurers so protective that brokers find themselves without the tools to find offers that cover the risks in question,” they concluded.