There are still many operators that provide transport and logistical services without the necessary goods-in-transit insurance (GIT) in place, and this practice has been to the detriment of businesses.
Quinton de Villiers, managing director of Bridgewater Logistics, a leading South African transport and logistics specialist, reminds that it is mandatory for either the consignor or the consignee to take out GIT insurance, and provide evidence that this has been done.
“Goods are not allowed to be moved unless a person dispatching more than 500 tons of goods in a month by road or the person receiving such goods can produce written evidence of the insurance. These are regulations that were introduced in South Africa in 2015, yet businesses are still suffering damages due to insufficient, or no GIT cover in place. Unfortunately, it is smaller companies that are suffering the full brunt of this risky practice. They are may not be as familiar with transportation and logistics requirements as their larger counterparts, or the corporates, which are known for having extensive checks-and-balances in place to mitigate the extensive risk involved in getting their product to where it is required,” says De Villiers.
He attributes the situation to an influx of small unscrupulous road transport companies into the market that do not only have inadequate resources and infrastructure to fulfill their contractual obligations, but are also unfamiliar with the latest regulations that govern the transport and logistics sector. In extenuating circumstances, they blatantly ignore requirements taking advantage of uninformed businesses. There has been a noticeable increase in these operators during troubled economic conditions, as they claim to be able to provide a comprehensive transport and logistical service at extremely low and unsustainable rates.
Conversely, Bridgewater Logistics provides its clients with the peace-of-mind that they are sufficiently covered in the event of an incident. This is considering the extensive preparation the company is known for undertaking on behalf of all of its clients, including ensuring that all relevant documentation is in place, especially GIT insurance.
As De Villiers points out, this mitigates risk associated with one of the most important aspects of any business, namely delivering product to the market safely and on time.
He is concerned that the extent of this component of business is so often overlooked by smaller companies, and his views are certainly motivated by the sizeable claims processed by insurance providers on the transport and logistics front, alone.
In 2014, a leading insurance provider processed a claim for more than R1-million – and this was only for the damaged goods. Meanwhile, it also paid out a total of 1 504 GIT-related claims to the value of more than R54 million from January to December that year.
“It is clear that relying on ‘word-of-mouth’, alone, when making a critical decision around who handles and moves your precious goods is an extremely short-sighted approach. With such high risks involved, I would encourage any business to first do extensive research before entering into any contracts with transport and logistics service providers. This includes visiting their premises and meeting the management teams to get to know their potential partner better, and exactly what they claim to offer,” concludes De Villiers.