New Technologies, New Opportunities To Innovate And Improve Transportation Risk Management

NEW TECHNOLOGIES, NEW OPPORTUNITIES TO INNOVATE AND IMPROVE TRANSPORTATION RISK MANAGEMENT

Although the quarantines did not generate new technologies in the logistics chain per se, they did prove to be an effective trigger for many companies to intensify their use in order to improve operational performance.

This is strongly promoting the technology called the Internet of Things like never before, which, together with the application of Artificial Intelligence increasingly, is giving rise to what is today called “Logistics 4.0”, based on georeferencing and exploitation. of data as basic management tools.

This new reality should not be indifferent to the insurance market, which could well take advantage of it, both for the development of new products and to improve risk management.

However, we observe that the insurance industry is somewhat lagging in this field and, particularly in transportation insurance, in our opinion, technologically innovative services are not yet being generated; In fact, it is observed that the technological offer is being underutilized even for its most widespread application in the prevention of cargo theft.

It could be said, paraphrasing a current term, that in insurance, “phase 1” technology is just entering, which is the moderately productive use of GPS.

A new opportunity

Paradoxically, at a time when there is a general conviction, according to which insurers must transform themselves to provide prevention and assistance services, leaving their traditional compensatory role in the background, transport insurance, a prominent cultivator of this concept since its origin, has This role has been significantly diminished in recent decades.

The appearance of the container that modernized and standardized the means of transportation and loading, the sophistication of carriers converted into logistics operators, among other advances in packaging and packaging, have led to a drastic reduction in the frequency of accidents, which resulted in The professional assistance that the market demanded has been significantly reduced.

Gone are the times when contact with the client was fluid and permanent, the insurance advised clients on port infrastructure, cargo conditioning, loading and unloading controls were carried out and their advice was required for the correct processing of claims. In short, the Insurer was perceived as a valuable business partner for this type of contributions.

In Latin America at least, this professional role of prevention advisor was limited mainly to the problem of cargo theft in land transportation, a scourge that continues to grow and worry.

The good news is that today, the variety and potential of new technologies can become a powerful driver to develop new innovative products and services that return transport insurance to its leading role and extend them beyond the problem of theft as the only objective. .

Now, for these disruptive initiatives to materialize, it is required, in addition to the creative attitude, a deep knowledge and understanding of how they work, what applications they have, how to use these new technologies in the appropriate way and not be dazzled so as not to fall into errors of judgment, as occurred at the time with the emergence of GPS.

We mean that the insurance market was quick to identify it as the cornerstone to solve the problem of cargo theft, promoting its use to replace armed escort services that were (and still are) very expensive.

Despite the warning voices, many subscribers wrongly assumed that by having visibility and a sensor that alerted about door opening or through a panic button, they would be able to do without escorts, which was far from the case. to be true.

Although it may seem somewhat impertinent in an article about technology, we cannot ignore that, when we talk about high-value and high-risk cargo, the main prevention resource is physical custody.

Technological devices are an essential complement in these cases and can be very effective, for loading of medium or low values, as long as they are used correctly.

The truth is that today, 20 years later, the underuse of GPS and all its complementary accessories is still very common in Latin America.

Some examples are:

What good is a panic button if drivers refuse to use it and in fact its use is practically non-existent?

There are policies that only require this accessory.

What good is GPS equipment if you can’t activate the engine stop?

This accessory is key to preventing the consummation of the theft but is not always mentioned in the policy.

What’s the point of requiring the use of GPS without drivers’ door or cargo box opening sensors?

Of little or nothing and, in some countries, they are not mentioned in the policy requirements.

What good is a door opening sensor if I don’t have a pre-established place where they can open?

In countries where they are required, it is common that there is no obligation to define the authorized places, which makes the use of these sensors useless.

What’s the point of having visibility of the route if I don’t have it pre-established?

It is useless to see where a truck is traveling without knowing whether or not it is following the assigned route, nor are the authorized stops predefined in order to receive detour alerts in real time,

What good is a GPS system without active trip monitoring?

Since its appearance, in many cases the false belief has been established that someone is following the trucks on a map, when in reality the usual service is to act ex post based on the theft report. Effective in a high percentage to recover the vehicle, practically useless for the recovery of the merchandise.

What good is a GPS system if it does not allow any anomaly to be detected early?

Active monitoring discourages the possibility of theft and allows it to be detected within the first minutes, which considerably increases the possibility of aborting it. Experience indicates that the chances of recovery increase inversely proportional to the amount of time it takes to detect it.

Visibility, the future of Logistics

Now that we are trained in the correct use of basic technology, we can delve into new developments and their possible applications to generate new value-added products and services.

If we had to summarize all the potential of new technologies in a simple and accessible concept for anyone, it would be enough to talk about Logistics visibility in real time.

Indeed, the new and revolutionary thing that is happening is that we can access in real time practically all the variables that interest us about the state of the load during transport.

The label revolution

Labels that warn about changes in temperature, impacts or inconvenient inclinations are old allies for the prevention of these situations, they are close to turning 40 years old. Basically its contribution is to change color when any of these situations occur during transport, discouraging bad treatment by exposing the person responsible.

Of course, the problem was only detectable at the end of the trip.

Today, these “analog” labels continue to make their contribution, but now they offer a “digital” version that warns of deviations in real time, which allows proactive actions to be taken to prevent further damage, as well as anticipate repair or replacement measures. in a context of hyper just in time.

Not only that, the label revolution will allow the development of new “parametric” insurance products, based on the data transmitted, without the need for physical verifications to process payments.

Apps for physical and road safety

The offer of various mobile applications does not stop.

Today we can use the driver’s cell phone as another element of the theft prevention measures, integrating it with the truck’s GPS and other tracking devices if any, forming an electronic link that, if affected, would send us an alarm signal.

They also offer the possibility of measuring and improving the driver’s driving behavior, a key issue for accident prevention.

Added to these value-added features for prevention, the new applications provide multiple benefits for logistics management.

Smart cameras

A revolution is also being observed here, combining advances in data transmission systems with intelligent algorithms that identify inappropriate driver behavior or signs of fatigue that can be displayed in real time.

They also record and record any type of accident, which is extremely valuable when it comes to defining responsibilities.

As can be seen, these advances allow us to improve physical and road safety at the same time, which begins to blur the border between the truck policy and that of the merchandise. (A topic that is surely suitable for another article)

Identity Validation

Who shows up to load at the Port or at a warehouse is who they say they are? Is driver and truck documentation up to date and in compliance with corporate standards?

All these questions and some more can be validated in real time using the new “on boarding” tools created for the financial industry that, through artificial intelligence, allow the identity and veracity of driving license, truck documentation, etc. to be validated.

These are just a few examples of the set of tools available to improve risk management and create new products and services in an innovative and sustainable way.

Its full use will require subscribers of the future to expand their knowledge base, incorporating unconventional knowledge, more oriented to data science and logistics technology.

But to better understand this point, we strongly suggest reading Axel Trauttenmiller’s excellent article on the Subscriber of the Future, published in the previous issue of Alsum Magazine.

Axel describes there with great clarity the potential that new technologies offer us, emphasizing and detailing precisely what skills should be incorporated to bring transport insurance to its 4.0 version.

New technologies open the doors to a new world, in which transportation insurance has the opportunity to recover its leading role. If this article served to mobilize new ideas and awaken the interest of readers, we will have met our objective.