Top Maritime Trends of 2020: Captain Andrew Kinsey, Allianz, Examines Logistics Challenges

MarineLink December 14, 2020

Captain Andrew Kinsey, Senior Marine Risk Consultant, Allianz Global Corporate & Specialty, recently discussed some of the trends that will shape 2021 for the maritime, ports and logistics world.

MR TV: As we come to the end of 2020, talk now turns not simply to COVID-19 and a potential vaccine, but to the supply chain logistics and challenges that come with distributing those vaccines. How does the picture look from where you sit?

Andrew Kinsey: The picture looks complicated. It's a global demand. It's a global logistics problem. So in its scope and complexity, it is unmatched for what we've ever faced before, and it's multifaceted. We have a tremendous theft potential because of the value of (the vaccine). And then also the theft is augmented by the current economic conditions globally; we have seen an uptick in pilferage of cargoes throughout North America. But then we also have the cold chain complications of any form of shipment. So the chain of custody, the shipment, the packaging; can we effectively and efficiently transport this in the timeframe required? That comes down to that last mile challenge, as (the vaccine) has to get to the recipient in good order, at temp, within the timeline.

MR TV: This issue transcends just the maritime portion of the program.

Andrew Kinsey: From the delivery standpoint, with so much of the current air capacity grounded, it's a problem, because we are so used to having air cargo on passenger vessels, not just cargo. So with so many flights grounded, our air capacity for transport is limited. And then (you have to consider) hotspots (and ask) are the truckers available? It's complex and it's keeping a lot of us up at night to try to stay on top of it and make sure that we preplan, and we talk with the assureds.
Because one of the biggest challenges on this is we have our traditional suppliers for this who are well-vetted and understand the risks and challenges, but as in any supply and demand free market economy, you're going to have new people popping up. So we speak with assureds often about vetting their supply chains; making sure (you know who’s) carrying your cargo, and make sure it's not being subbed out without your knowledge.

By Pawin/AdobeStock

MR TV: Obviously the pandemic has created infinite challenges across all industries. In the maritime world, there are many, including in regards to global survey attendance. What have been the challenges, and perhaps more importantly, what have been some of the lessons learned that you've seen?

Andrew Kinsey: Well on the survey attendance for global, it has been access; access to sites, to vessels, to equipment, to workers. So, with that access and the lack thereof, we also are facing the challenges of delays. And once again, these are delays because of canceled sailings, delays because of port restrictions and congestion, or delays because of site closures. And we know with the supply chain, it's a domino effect. We work with our assureds regularly to inform them it's a changing landscape. What worked yesterday will not work tomorrow. It's just going to change. It really goes back to basics, getting on the phone, making those phone calls. Sometimes it's a late at night call if it's Vietnam or Malaysia or India, but really touching base and knowing who's at the other end, who's going to support you.

MR TV: 2020 has been quite a year and it's not simply been COVID-19; but also the record hurricane season. What do you consider to be the best lessons learned (or not learned) as far as hurricane preparedness and response?

Andrew Kinsey: It actually goes back to one of the first things I learned at my Alma mater, the seven Ps of proper planning. One of the biggest challenges for this season was the back-to-back storms. One of the major sites we've been working with one of our assureds is Lake Charles, which unfortunately has suffered repeated storms. So you're facing accumulations. The cargo that couldn't get there because of the first storm is still sitting on barges or rail or in warehouses and it can't get there, and then it's delayed with the second storm. So that accumulation of risk, because the ships are getting discharged in that window, but the barges can't always get there or the heavy hauls.
A key factor to this is to understand the deterioration of the infrastructure. When you have storms of this magnitude pass through, you are having changes in your channels, your dredging, your roads, your heavy hauls, your power lines. That's the hardware. But then also the software. Your internet, your phone, your power, all these things are out and have to be addressed and brought back up. So from a heavy haul standpoint, or from a Coast Guard standpoint, you're not going to be able to get down that channel. You're not going to be able to go down that road. Having a plan, vetting that plan, and doing a tabletop beforehand (is essential).

MR TV: Last but surely not least is the prevalence of cyber security threats to the maritime community. As you know, as of January 1, 2021, all vessels with the safety management system need to address cybersecurity in their procedures. What are some of your recommendations?

Andrew Kinsey: At Allianz we tell our assureds: cyber is a race without a finish. It not going away and you need to stay on top of it because it’s an ever-changing landscape. There are some unique challenges from a marine standpoint for cyber, but the biggest thing to remember is there are a lot of assets available for cyber (protection) throughout the cyber community. This is not a maritime only threat. This is something that every company, every entity. So you can’t just go down the rabbit hole of what we have to do for marine, we’re all interconnected. (So we recommend to) use the assets that are available. The Coast Guard is a great start, go there first to understand how it has to be tailored to your safety management system specifically, but reach out, drill down, there are more assets available.
The Department of Homeland Security has some wonderful assets for small businesses. And then the National Cybersecurity Forum also has some excellent resources. (Effectively mitigating the cyber security threat) takes continued improvement, it takes continued vigilance. And since it's part of that safety management system, it also needs to be audited. We have to review it each year. So it's not a one and done, and it's unfortunately not going to be done, there is no real finish here.