Total 2010 U.S. import shipments (in twenty-foot equivalent units, or TEUs) rose about 14% over 2009, with West Coast ports seeing the biggest growth in activity, according to statistics from Zepol, a Minneapolis-based trade information company. The trend is upward, with new relationships being forged between Asian and U.S. West Coast ports. Globally, ocean container traffic hit an all-time high of 560 million TEUs in 2010, largely due to surging volume in China, according to liner industry database provider Alphaliner.
Although import growth is expected to slow to just over 8% this year, that is still significant considering the economic spasms felt throughout the world over the past several years. Moreover, more and more small businesses are entering global markets and buying from foreign suppliers. Imports run the gamut from raw materials to electronics parts, housing materials and manufactured consumer products.
Importers are exposed to multiple sources of loss. Some damages are concealed, worsening unseen behind undamaged packing materials. Some are intangible—the goods simply don't arrive anywhere near the expected date. Still others occur during transit and storage. Theft, piracy, natural disasters in port or at sea—the list can go on for pages. The biggest concern, however, is not a surge in large claims but the increasing cost of more routine claims.
Restore, Don't ReplaceIn many claims involving manufactured items, damage results from moisture or grime. Depending on the items and the timing, replacement has been the traditionally preferred method of dealing with damaged cargo since there has been no foolproof way of restoring it to a like-new state. But replacement takes time and has ancillary consequences, particularly for the environment. Landfills continue to pile up at an incredible rate creating many problems for cities across the country—where will all the garbage go? In addition, for the insurance industry, having to replace contents that are thrown into the landfills is a costly endeavor. Environmental and economic pressures are causing the industry to turn more toward restoring than replacing.
Today, an alternative technology has arisen that can wet-wash contaminated soft contents, including shoes, purses, sports equipment, baby seats and many other unique "unwashables." The environmentally sensitive chemicals used are mild enough that articles aren't damaged but strong enough that they can remove heavy smoke and soot, mold, sewage and many stains. The patented technology has been laboratory proven to remove 99% of contaminants. It does not agitate the articles but holds them stationary while four stages of detergent-laden water pressure create the unique cleaning cycle. The fact that the articles are not agitated creates the ability to clean items considered delicate. The technology utilizes computer-programmed wash cycles that are tailored to the particular articles to be cleaned and the contamination to which they have been exposed.
At a time when every dollar counts, the money savings can be substantial. For example, a loss of 100,000 baby car seats priced at $200 would cost significantly more to replace than to clean to like-new condition. Cleaning costs typically range between 20% and 25% of replacement costs. In other cases, a business's livelihood might be the consequential loss. Take, for instance, the case of a West Coast, high-end, children's shoe store preparing for its grand opening. One of its most popular items was predicted to be squeaky, leather toddler shoes, which the owners found at an excellent price through a Chinese manufacturer.
After large upfront investments were made in a specialty retail space, advertising and stock, it was found that the squeaky shoes had suffered damage en route. They had been exposed to seawater on the journey and were now covered in mold. A $50,000 cash-out value was given by the claim adjuster, but the owners were facing a greater loss—that of their grand opening first impression and their dream. They wanted the shoes. Since there was no time to ship a new lot from China, the owners opted for restoration. The process was quick and thorough and provided them their specialty shoes in perfect condition in time for their grand opening.
With new developments in soft contents wash technology, insurers are able to accomplish cost savings, create environmentally positive outcomes and restore policyholder confidence—and sometimes maybe even their dreams.
David MacLean is president of the
Certified Contents Restoration Network (CCRN). CCRN is a North American-wide network of restoration contractors certified in the operation of the patented Esporta Wash System for soft contents.
www.RestoreDontReplace.com