Can tracking fragile and sensitive cargo shipments facilitate insurance procedures?

One of the biggest problems businesses face from supply chain disruptions is being able to have proof when claiming insurance. Over the last two years, supply chain losses due to poor transport caused by the pandemic, geopolitical risks, and natural disasters have been staggering.

What makes it harder for businesses, especially those whose shipments are damaged or missing from these disruptions, is identifying the cause of damage or when an incident occurred. For example, confirming is shipments were actually damaged by bad weather or bad management by a shipping company or what happens to cargo that has been breached during transport.

To deal with these challenges, the industry needs solutions that can provide real-time information on transport operations. This includes changes in temperature and humidity to whether the goods have been tilted. to all parties involved, giving everyone the ability to quickly adapt to potential incidents and rapidly recover from them.

As such, NTT DATA and SAP Asia Pacific and Japan (APJ) announced a new co-innovation solution to improve supply chain insurance management. The solution, Connected Product monitors the location and environmental conditions of goods in transit. It is especially useful for tracking fragile goods, such as solar panels; bulk liquids, such as wine and olive oil; and sensitive cold chain shipments, such as cheese, pharmaceuticals, and even vaccines.

The tracking provides greater visibility across the entire supply chain, and agility to activate immediate reactionary procedures, in case of damage or delays. This reduces friction when purchasing insurance and processing claims for shipments, and ensures timely delivery of goods. It also reduces waste and promotes sustainability.

Hirofumi Suzuki, President, and Representative Director, SAP Japan said modernizing supply chain management is one of the key themes that is being discussed at the SAP Sapphire conference in Tokyo.

For Paul Marriott, President, SAP APJ, global disruptions have caused today’s value chains to be more complex and diversified than ever before, and this complexity will only increase.

“What we’re announcing today improves supply chain visibility for logistics companies and insurers here in the APJ region and delivers on NTT and SAP’s shared vision of helping companies around the globe achieve greater resiliency and agility to ensure they are prepared for future disruptions,” commented Marriott.

Connected Product brings together the power of SAP logistics solution and the global track and trace option, extended with NTT DATA smart insurance policy management assets, to dramatically change the way people ship goods and manage associated risks. The solution also includes components built using the SAP Business Technology Platform.

By enabling end-to-end, real-time monitoring of the transportation conditions, the solution can monitor all variables that could affect a shipment, and automatically trigger and execute insurance policies if goods are not transported under certain pre-defined conditions. Utilizing SAP Business Network for Logistics helps improve accountability for each stakeholder and makes transport insurance management easier.

Plus, by digitizing shipment and insurance documentation, the solution simplifies tracking and insurance processes across the supply chain, reducing waste and costs, and benefiting to the whole ecosystem – from the insurance company to the insurance reseller to the logistics companies.

“Today, more than ever before, global logistics need to be resilient and adaptative. Long-term planning alone is no longer sufficient, and organizations must be able to react quickly, especially in times of uncertainty. Critical to enabling this type of agility is to have the right data in the right hands, in real-time,” said Norbert Rotter, SVP, NTT DATA Corporation, and CEO, NTT DATA Business Solutions.

Currently, NTT DATA and SAP Connected Product teams in Japan, Germany, and Spain are collaborating on a pilot with a Spanish logistics group and a German insurance company, using Connected Product to track the condition of hundreds of containers moved by 20 shippers between Europe and Asia.

The data gathered by IoT sensors helps to ensure that conditions critical for the goods – like temperature, luminosity, or shock-proofing requirements – are managed during the journey. That information allows customers to quickly react to incidents. The pilot project will continue to run through September 2022, after which NTT DATA plans to incorporate the system into business operations, extending the solution to more international insurance and logistics companies.

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