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Transportation concerned about business interruption

The Allianz Risk Barometer 2018 has revealed 37%  of 1 911 risk experts from 80 countries believe business interruption is a top concern for the transportation industry.

Theft, fraud, and corruption returned with 32% of responses at the number two spot, up from number three in 2017.

Cyber incidents were at number three with 29%, and natural catastrophes placed at number four, returning 25% were new emerging threats. Changes in legislation and regulation were number five at 24% and have moved down from 2017’s forth place.

“The interruption of business operations by various factors, like fire and natural disasters, has a tremendous effect on revenue in transportation. In South Africa, this is often caused by high road and rail accidents,” said Allianz.

“South African roads are known to be high risk, especially over the festive and holiday periods. Although the 2017/2018 festive period deaths toll figures have decreased by 11% to 1527. The number is still very high, consequentially making the roads unsafe and transportation very risky.”

Meanwhile, the Railway Safety Regulator that is heavily involved in investigating rail accidents reported that a majority of their accidents emerge from collisions and derailments.

The regulator also pointed to the accidents as consequences of operational risks such as human error and disruption of operations but nonetheless cost the operator millions of Rands in operational losses. Vandalism has also become a common problem in the rail and road networks.

The report noted that the maritime sector was no exception to risks associated with the disruption of operations. “Last year saw a further decrease in the number of piracy incidents recorded as only 191 incidents were reported globally, down from 246 in 2015.

“This is the lowest total recorded since 1998, and reflects the successful measures taken to contain the threat of Somali pirates in the Gulf of Aden and the Indian Ocean. However, other risk challenges remain, such as the rise in crew kidnappings in parts of West Africa.”

Theft, fraud, corruption are still a huge challenge across the transportation industry due to the large amounts of money circulating in transportation, which makes it more susceptible to this risk.

The report noted that the threat of cyber-attacks continues to be significant.

The report is published annually by Allianz Global Corporate & Specialty (AGCS).

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