3rd March 2011

Transit damage – costs, causes,

reductionAutomotive Logistics Europe

ALE - Bonn

Quick name check...

Sevatas – the new name for Pound Gates

Vehicle Management Services

– Providing risk management, claims and damage

reduction solutions to the finished vehicle

logistics sector

Agenda

Transit damage

Causes

Damage reduction

Costs

Agenda

Transit damage

Causes

Damage reduction

Costs

Costs...

Low transit damage indicates high quality

Damage repair costs

Insurance premiums

Vehicle inspections

Claims administration

Brand perception through delayed

customer delivery

Costs...

Damage costs

– 15.4m vehicle registrations

– Based on 3% claim ratio = 460,000 damaged

vehicles

– €150m-€200m p/a

Insurance premiums

– Different OEM arrangements + liability insurance

for LSPs = €80m p/a

Costs...

Vehicle inspections

– 15.4m vehicle registrations x 3 handovers @ €1

– €50m p/a

Claims administration

– @ €100 per claim= €50m p/a

Total

– €330m p/a

Transit damage

Causes

Damage reduction

Costs

Causes

New vehicles are (mostly) unpacked and

susceptible to damage

– Wide range of perils that can cause damage and

loss

– Some are avoidable; opportunities to reduce still

further

– Others are not; mitigation or disaster recovery

required

Causes...

Handling

•Stowing•Lashing•(Un)loading•Parking•Vehicle access•Theft

Movement

• Heavy weather

• Rail dust

• Stone chips

• Shunts

• Road accidents

Catastrophe

• Hail

• Flood

• Contamination

Hail events 2010

Source - European Severe Weather Database

Transit damage

Causes

Damage reduction

Costs

Damage reduction

Data capture, analysis to support risk management

Handling processes, vehicle protection

Collaboration –supplier / OEMs

Knowledge sharing, benchmarking

Data capture to support risk

management...

Damage reduction can be costly!

To form the basis of an argument, cost

benefit analysis must be undertaken

Analysis can only be delivered where costs

accurately recorded and reported

Lack of consistent reporting

Do you know how many damages you

really suffer?

Data often not held centrally, split across

NSCs or LSPs

All claims must be recorded, even if small

/ under carrier liability

No data = no accurate Cost Benefit

Analysis

Data capture to support risk

management...

Handling processes, vehicle

protection

Wide range of options, including

– Vehicle / equipment protection, hail nets, tree

cutting etc

– Damage resistant paints

– Handling standards, operational instructions,

quality auditing

– Dealer management, auditing

– Vehicle washing procedures

Collaboration

OEM / LSP – identifying issues together

– Sharing of accurate data and solutions, e.g.

• high claiming dealerships

• need for protection

• operator training

• KPIs and contracts that support collaboration

Knowledge sharing & benchmarking

Finally, damage reduction through

knowledge sharing & benchmarking

– Good work of the ECG Quality Standards working

group; looking at damage issues and resolution

– Sevatas communities of interest – bringing

together stakeholder groups (manufacturers, ports

and vessel operators, insurers) to discuss common

problems and solutions

– Better understanding to improve decision making

Thanks...