Port Logjams Exacerbate Supply Chain Risks

The chocked-up marine supply chain, as illustrated by news photos of ships sitting at ports for long periods waiting to be unloaded, is becoming an issue of increasing concern to the insurance industry.

While delays in unloading cargos are not necessarily covered in insurance policies — assuming they don’t involve the spoilage of perishable foods or pharmaceuticals — there is cumulative risk as ships line up to unload in Long Beach, California, the busiest container port in the western hemisphere for the past 20 years, and other major ports in the United States and globally, experts say.

This can come from a catastrophe such as a storm, as was the case with 2012’s Superstorm Sandy; an earthquake that damages port facilities; or a fire (see related story below).

Experts say marine supply chain risks are complex and encompass not just the ships but shipping containers, warehouses, trucking and rail facilities, and labor, all of which are in short supply.