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Risk in Context

Six steps to reduce cargo claims in the Monsoon

Posted by A. Rajan 05 September 2017

The period from June to September is the rainy season or monsoon in India. In the states of Tamil Nadu and Karnataka, the rains continue until November. Cargo plays a vital role in supply chain management. Any disturbances due to monsoon can lead to cargo claims and affect a business organizations supply chain.

Cargo claims in monsoon:

Every organization faces a steep rise in cargo claims during the monsoon. Wet damage, damage due to delays, inundation, and accidents are some of the key loss drivers. Among these, loss due to wet damage is highest, primarily due to poor vehicle selection, incorrect storage and handling methods, and non-preparedness of monsoon packaging.

Typically pharmaceuticals, fast moving consumer goods, and food products, are the most vulnerable to wet damage. They are destroyed or become unusable, when they come into contact with water. Other products, such as iron, steel, and other metals may rust. Even temperature-controlled cargo may deteriorate due to delays in transit during the monsoon season.

Steps to help reduce cargo losses and claims:

  • Use closed vehicles after performing a leak light test.
  • Handle or load cargo in closed / covered areas.
  • Avoid storing goods in open and low-lying areas. Repair roofs and sheds used to store your goods and raw materials.
  • Ensure that your cargo is packed with water-resistant materials, which will withstand ingress of water. Some examples: Cartons can be covered with polythene sheet etc., jute bags can be replaced with poly woven bags.
  • Plan your route in such a way that the transportation of cargo will not get be affected by floods, landslides etc.
  • Segregate wet cargo from other cargo to lower the losses.

The monsoon cannot be controlled. However, by being proactive, business organizations can substantially reduce cargo losses.

Related to:  Claims , Claims Management

A. Rajan