Risk ManagementRisk Management

Do we need it?Do we need it?

Dipankar Acharya07.08.2014

           

                                                                                                                                                                                                                                                      

Do we identify, analyse and Do we identify, analyse and

manage our Risks correctly and manage our Risks correctly and

scientifically?scientifically?

We need to >We need to >•Identify RisksIdentify Risks•Assess RisksAssess Risks•Control RisksControl Risks

The Risk Management Process

Identification

Mitigation

EvaluationMonitoring

The Risk Management Cycle - Identification

•What are the hazards…•Where are the hazards….

Mitigation

EvaluationMonitoring

IdentificationIdentification• Peril- An event/Occurrence. Eg: Flood, Fire

• Hazard - Probability of the peril to happen . Eg: Proximity of house to a River, Use of Flammable Liquids

• Risk- effect of the peril on the asset . Eg: Flood damage, Fire loss.

• Risk includes both the event which will give rise to some loss as well as factors which may have an impact on the loss.

The Risk Management Cycle - Evaluation

Identification

Mitigation

EvaluationEvaluationMonitoring

• How could the hazard affect us• What would the hazard do• When could the risk affect us• What could the risk cost• Who would the risk affect

The Risk Management Cycle - Mitigation

Identification

EvaluationMonitoring

MitigationMitigation• How can the risk be mitigated..• What steps can be taken to reduce

the impact of the risk to the business• Mitigation strategies are:

– Avoid– Transfer – physically or financial impact– Reduce impact of risk

The Risk Management Cycle - MonitoringIdentification

Mitigation

EvaluationMonitoringMonitoring

• Has the mitigation action had the desired affect

• Is the risk changing…• Have actions been taken…• Does the mitigation alter the risk…

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Risks Exposures in monsoon to cargo in transit.

Moisture damage to cargo in transit

Rain Water Damages – Recommendation for mitigation

Rain Water Damages – The problems at hand

Rain Water Losses

Use of torn & worn out Tarpaulin

Rain Water Losses

In adequate covering of truck

Rain Water Losses

Use of Single and torn Tarpaulin resulted in Loss

Rain Water Losses

Improper stacking – results in aggravation of loss

Rain Water Losses

Boxes which are received in un hygienic wet condition Out of 360 boxes , 141 boxes condition found to be

rejected

Rain Water Losses

Out of 320 bags, 266 bags were damaged.

Wet damage leading to a further aggravation of loss.

Different consignments of sugar were dispatched from the supplier . There was damage to a few bags in each truck load. When the sound and the water-damaged bags were stored together, the moisture from the damaged bags affectedthe sound bags resulting in aggravation of loss.

The consignment was loaded in half–body open trucks which is not sufficient to carry cartons of double stacking for long distances. Due to the half body open truck and effect of moisture, cartons opened up during transit due to severe jerks/jolts this resulted in severe damages to the consignment.

Inadequate packing and stacking during transit in wet weather leading to damage

Damage due to entry of water through opening

The plastic wrapping inside the carton had a space at its mouth in a way as to expose the cargo to the lid of the carton. This facilitated the entry of moisture, water and foreign particles directly in the material.

Recommendations for mitigating wet damages to the cargo

1. Use of Double Tarpaulin.2. Use of large tarpaulin instead of two separate tarpaulin to cover one truck.3. Cover Truck with one or more number of plastic sheet and then with tarpaulin.4. Use Pallets / Discarded Sheets of Water / Plastic Sheets at floor of the trucks.5. Arrange use of closed body trucks and wrap valuable cargo in plastic or shrink wrap.6. Cart cargo in shed premises.7. For FCL use moisture bags since humidity is likely to be as high as 90%8. For all consignments cargo needs to be labeled on both sides with water proof markers9. Allow plenty of lead time to accommodate unscheduled delays since there is port

congestion in monsoons10. Slightly wet or damaged cargo should be kept away from other dry cargo specially at

container freight stations.11. All wooden cases and pallets should be fumigated to prevent moulds, moisture and

dampness to the cases.12. Ensure right packing as per the nature of the cargo.13. Post loss surveys

Its difficult to eliminate all the risks, but we need to ensure we have taken all the precautions and done a cost – benefit analysis. We need to identify, evaluate, mitigate and monitor the risks at hand.