Storage risks: loss control and underwriting considerations
In this blog, our associate researcher Ivan Huertas makes a summary of the most important lessons about the storage risks, as presented by IUMI in a webinar.
Cargo storage is associated with a wide series of safety and protection risks. The Long term or temporal stowage of dangerous goods (DG) even has the potential to threaten life, the environment, and other properties. The catastrophic events in Beirut and Tianjin are mere examples of it, as well as strong reminders of the crucial importance of exhaustive risk assessment of storage facilities on a regular basis.
Isabelle Therrien, Chair of the IUMI Cargo Committee and Senior VP at Falvey Cargo Underwriting, introduces the sessions by indicating that, according to data from 25 countries on major cargo losses, storage represented around 32% by number of events (37% in 2018 and 31% in 2019). When looking at incurred losses, the data showed that storage represented 62% (excluding natural catastrophes the number goes down to 39%).
This data show the important amount of risks and losses that cargoes face during storage. Regarding the lack of International regulations and requirements for (dangerous) cargo handling and storage, the first panelist, Scott Brown, Chief of Maritime risks engineering at the National Bureau of Cago, presented the key factors to assess the storage risks based on the White book Checklist for storage
Estos datos resaltan la cantidad importante de riesgos y pérdidas que sufren las mercancías durante el almacenamiento. A la luz de la ausencia de normas o requisitos internacionales para el manejo y almacenamiento de cargas (peligrosas), el primer panelista: Scott Brown, Jefe de Ingeniería de Riesgos Marítimos en la Oficina Nacional de Carga; presenta los factores clave para evaluar los riesgos de almacenamiento con base en el libro “Warehousing White Paper checklist”
(to read the paper click here).
This document was developed to create a response to the increasing number of catastrophic events and losses, the want of uniformly adopted standards within the industry and the nonexistent international regulations for warehousing storage. The target audiences are: warehouses owners and workers, the insurance sector, port operators, shipping companies and carriers.
The implementation of this document works for all kind of storage facilities (bulk cargo, refrigerated storage, hubs, among other) emphasizing the importance of prioritizing dangerous goods.
The first big finding of the book is the compliance with applicable regulations in accordance with the region or country. In the second place, it highlights the importance of granting the physical integrity of the work force through trainings, assessment, safety measures and adequate identification of risks.
Afterwards, they mention the construction of storage facilities of applicable codes of building, basic services, adequate ventilation and lighting, implementation of emergency power that activates at the moment of failure and performing necessary maintaining. As fourth recommendation, they propose the operational controls: storage systems, cargo handling equipments, palets management, cleaning practices and smoking control devices.
It is important to verify the storage conditions of dangerous goods, by implementing an acceptance process of those goods, having clear restrictions on storage and access permits, contracting suitable and dedicated staff, managing inventory adequately, implementing adequate packaging, marking, and labeling processes and separating dangerous goods from others.
Finally, the document highlights that storage facilities should have an adequate firefighting system, a safety system for cargo integrity during storage and the implementation of an emergency response plan with qualified staff.
The second panelist, Martin Mensch, Cargo Surveyor, and expert in warehouse risk assessment at Batterman & Tillery Group, emphasizes those risks which are not evident, highlighting the fact that if no incident occurs in a storage facility in a long time, it does not mean absence of danger.
The first big enemy of stored cargoes is fire and smoke, and plenty of mistakes are made during the storage: 1) long lines of stacked merchandise susceptible to fire, 2) placing inflammable goods next to ignition sources, 3) making a wrong inventory, 4) not counting with an emergency plan to allow to fight the fire in less than 20 minutes, which increases the chances to control it, 5) not separating different flammable cargoes (paperboard, dangerous goods), 6) placing pallets next to electrical systems and 6) not leaving spaces between the stocks and the roof, which difficult the fire fighting efforts.
In second place, the possibility of floods and leaks that affect the stocks is remarked. In such case, pipe materials that cannot handle the excess of water must be avoided; do not leave on the ground packages with paper within, and do maintenance to avoid corrosion, which is not easy to detect.
It is also important to adequately implement a system of shelves with protection against collisions or cargo falls. Rows with enough space reduce the risk ok contact, although that increases the time for a potential voyage.
Finally, failures that make thefts easier inside storage facilities are evidenced: 1) not counting with alarms all around the perimeter, 2) not enclosing adequately the facilities, 3) staff not doing proper and permanent rounds within the facilities, 3) leaving tools as stairs to the easy hand of criminals, 4) not counting with movement detectors, 5) containers with waste left aside the storage building not only increase the risk of fire, but also make easier to criminals obtaining access to the roof, enabling them to take out the goods without harming them.
To finish the webinar, and under the moderation of Pascal Dubois, Chair of the IUMI Loss Prevention Committee and General Director at CESAM, the panelists remarked the importance of counting with trained staff in the storage facilities, making surveys and adequate maintenance, implementing procedures to grant identification, prevention, and response to possible accidents.
Although, on the paper, cargo warehouses count with all the necessary equipment, technologically updated, permanent surveys must be done to identify possible risks.
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