TT Club Provides Guidance to Deal with Storms

December 15, 2004

As the clean-up continues after another notable storm season in the North Atlantic and North Pacific oceans, TT Club, a mutual insurer for the transport industry, has issued new recommendations on good practice for port and terminal operators.

Drawing on its experience over almost 40 years and most recently with storms such as typhoon Maemi in Korea and hurricanes Frances and Jeanne in the Bahamas, the Club’s guidelines are intended to minimize damage and downtime.

While storm damage can on occasion be unavoidable and apparently almost total, TT Club is pointing out that, even in a category three or four hurricane, the survivability rates for port equipment and cargo can be significantly improved by proper adherence to some relatively simple loss prevention procedures.

Typhoon Maemi, which hit South Korea and particularly the port of Busan at the end of September 2003, highlighted the vulnerability of gantry cranes, straddle carriers and other quayside equipment to wind speeds that can exceed 140mph. In some instances the gantry cranes were demolished, but the Club states that even in these extreme storms, risk management measures can reduce operators’ exposure to devastating losses.

“There are various defensive measures that have proved effective and that form the basis of TT Club’s recommendations,” said senior claims manager Colin Fordham, who works closely with the Club’s insureds in the ports and terminals sector. “These include strict adherence to comprehensive ‘tie-down’ procedures, protectively block-parking straddle carriers so they support each other, and ensuring that all gantry booms are secured in the upright position.”

But even when the worst scenario of collapsed cranes has been avoided, the Club warns against complacency and highlights the very real, costly risks of business interruption. Citing the example of this year’s hurricanes Frances and Jeanne on the Bahamas, which provoked a claim on the Club of US$11 million before reinsurance provisions, Fordham points out that, in contrast to Maemi’s trail of destruction, gantry cranes in the Bahamas and Caribbean
container terminals remained upright.

However, damage from flying debris and water ingress was severe and recovery times were hampered by a loss of power and communications. Hence the Club advises operators to maintain adequate stocks of spares, put in place contingency arrangements for secondary power supplies and ensure crane control rooms are adequately protected against water damage. “It’s also preferable to do what one can to minimize the height of container stacks, especially empties, in the yard area,” said Fordham.

The Club had loss adjusters on site in the Bahamas even before Frances struck. Consequently claims could reportedly be settled more promptly, contributing to facilities being brought back online swiftly and shipping schedules being restored with the minimum delay.

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