Revolutionising risk

Introduction

We have previously discussed the benefits and challenges of smart containers: Smart Containers | Hill Dickinson.

This follow-up article explores the latest trends in smart container technology from the perspective of cargo underwriters.

As a reminder, smart containers are equipped with sensors that provide real-time data and alerts on:

• Door opening

• Intrusion detection

• Shock detection

• Temperature fluctuations

• Predictive ETA

Why is smart container technology relevant to cargo underwriters?

International Union of Marine Insurance (IUMI) data for 2024 indicates that 47% of global cargo claims involve losses valued at less than USD 500,000. This suggests that many of these losses likely occur at the container level.

The latest IUMI data also provides a breakdown of cargo loss types for 2024 in percentage terms. Four categories of loss account for 68% of all cargo claims:

• Fire/explosion: 13%

• Theft/robbery/burglary: 13%

• Wetting/mould/humidity/water damage: 5%

• Remaining categories (including contamination, road accident, temperature damage, shortage and etc.): 37%

IUMI data indicates that cargo underwriters’ profitability is significantly impacted by lower-value claims (under USD 500,000) and the four key types of losses identified. According to the World Bank, over 60% of the commercial value of global trade is carried in containers. Therefore, smart container data has the potential to drastically reduce losses and ultimately transform the cargo underwriting business.

Smart container data will offer invaluable insights into how cargo underwriters can collaborate with insured to mitigate risk and prevent losses from occurring in the first place. For example, analysis of historical smart container data will help to identify negative trends in a particular supply chain or transport route, average turnaround times or damage rates of different ports, yards and routes or haulage companies with a higher-than-average incidence of damage or loss. The data generated by smart containers will enable insurers to evaluate and price risks more effectively. Furthermore, the ability to monitor the execution of a journey at the cargo level will accelerate claims resolution and allow subrogated cargo claims to be resolved more swiftly, thanks to increased access to supporting evidence.

Current market trends

Many major container lines have begun equipping their dry box fleets with smart capabilities. For example, Hapag-Lloyd has already fitted more than 85% of its container fleet with this technology. However, the major containers lines have little incentive in giving cargo underwriters access to the smart container data.

While smart containers rely on static, built-in monitoring devices installed by shipping lines, their data generally remains within the carrier’s control and is not always accessible to cargo owners or insurers. In contrast, portable sensor-based monitoring solutions, such as those offered by Arviem, can be attached to any container or cargo unit regardless of ownership. This mobility provides end-to-end visibility across multimodal transport, delivering real-time insights into the location, condition, and handling of goods. Because these devices move with the cargo rather than the container, they eliminate blind spots, enable predictive risk assessment, and support proactive loss prevention – thereby helping underwriters and clients to reduce waste, protect reputations, and avoid the additional costs associated with cargo damage or delay.

There is a growing trend among cargo owners to adopt such portable monitoring solutions providing real-time cargo monitoring data directly to cargo owners, logistics service providers, and insurers, enabling them to track, analyse, and respond to risks as shipments move through the supply chain.

Underwriters who incorporate data from sensor-based monitoring devices into their underwriting and risk assessment processes will gain a distinct competitive advantage over their peers by maintaining a healthy loss ratio at a competitive premium, achieved through a combination of loss prevention and streamlined claims handling.

Charles Vincent, CEO of Arviem: “We aim to challenge the long-standing notion that cargo underwriters exist merely to absorb losses. With the transparency and predictive power of sensor-generated data monitoring on the condition of goods, we enable underwriters and cargo owners to shift from cost acceptance to cost prevention - from reactive compensation to proactive collaboration to manage and mitigate risks before they occur. By doing so, we not only reduce waste and unnecessary costs but also help companies protect their reputation and avoid the cascading expenses that result from lost or damaged cargo.”

This article was written in collaboration with Arviem.

Upcoming BACS/MMIA seminars

On Thursday 6 November British Association of Cargo Surveyors  (BACS) will host a seminar  alongside Hill Dickinson at their office in The Broadgate Tower, City of London.

The presentation, ‘Smart containers – Unlocking value for cargo owners and insurers’, will be given by Richard York and Dieter Veening from  Arviem.

This seminar will explore:

1. How smart container technology works in practice to deliver data for both tactical and strategic decisions on supply chains

2. How this data can be used to unlock value and provide tangible benefit for cargo owners, insurers and brokers

3. Case studies of Arviem customers to demonstrate the theory and the real-world practice

Edwin Chan, Associate at Hill Dickinson, will also explore how smart container data has the potential to transform the handling and resolution of cargo claims, and how it could influence outcomes in legal disputes.

A separate seminar will also be delivered at Hill Dickinson’s office in 1 St Michael’s, Manchester on 13 November.