Skip to main content
main content, press tab to continue
Article

How to reduce transit risks in food, beverage and agriculture

By Andy Edwards , Charlie McCammon and Simon Lusher | November 22, 2024

From farm to table, almost 14% of food is lost or wasted. This blog explores transit and storage challenges in the food, beverage, and agriculture industry and how companies can mitigate these losses.
Marine
N/A

It’s a well-known statistic that around a third of global food production eventually ends up as food waste.[1] What’s less well known is that almost half of this 14% is lost or wasted before the food or beverage product makes it onto the supermarket shelf, bar or restaurant table or to the consumer at home.[2]

While there is a considerable amount of wastage during harvesting and production, a sizable proportion is lost during transit, storage and final distribution. Factors like weather, lost containers at sea, damaged packaging and pests play a major role in the losses.

Examples in recent years include:

  • A lightning strike and fire at a whisky rickhouse led to a total loss of product at a single location
  • A flood at a soya bean facility caused a loss of around $24 million
  • An open-air grain shipment exposed the grain to moisture, causing irreparable damage
  • Artisan cheese being target for theft through fraud.

How is the risk landscape changing?

Many firms are seeing shifts in their risk profiles, especially those with global supply chains.

  • Cold chain: Growing demand for perishables is putting pressure on cold chain logistics, from farm to last mile delivery, making it more difficult to maintain a consistent temperature and increasing the risk of damage or spoilage.
  • Theft: High value non-perishable food items such as artisan cheeses and nuts are becoming a popular target for thieves, along with shipments of beers, wines and spirits.
  • Disruption: In our 2024 Global Food and Beverage Survey, business disruption emerged as the sector’s biggest concern, driven by factors from droughts and natural disasters to trade disputes, all of which can lead to delays and spoilage.
  • Contamination: The risk of contamination during transit due to inadequate packaging, exposure to contaminants or pests, and mishandling has been rising. This is particularly concerning for sensitive goods like dairy, meat, and fresh produce.
  • Fire: Insurers are increasingly cautious about quoting cover for facilities such as whisky distilleries, where product is stored and matured in wooden rickhouses.

What can you do to get ahead of emerging challenges?

Map your logistics chain: Make sure you know every link in the chain from farm to final delivery. Greater visibility can help you understand where shipments are most vulnerable, for example from weather and natural catastrophes, theft or fire.

Check your contracts: Contracts, especially those with logistics providers, are very detailed and often complicated. Carry out a contract review to make sure that liability for losses hasn’t been wrongly shifted on to your business.

Implement real time tracking: Track the location status of your shipments in real time using systems such as smart food labels. This technology also allows you to monitor the condition and freshness of goods in transit and storage.

Consider end-to-end insurance solutions: Stock throughput policies can provide door to door cover for goods from the source to end delivery with continuous cover during distribution. This continous cover includes: 

  • International and inland transits by any mode of transport
  • Goods while they are being stored, processed or manufactured
  • All locations, including unnamed third-party warehouses and premises
  • All risks cover, from fire and theft to natural catastrophe
  • Storage in facilities such as wineries and distilleries.

Stock throughput eliminates gaps in cover and removes the need for separate policies for transit and storage. It also removes the need to include stock in property policies, which can help firms maximize property cover for their core buildings and assets.


Conclusion

The food, beverage and agriculture industry faces many emerging risks including loss and waste from farm to table. Firms face increasing risk of damage in transit and storage driven by factors from extreme weather, business disruption and theft. However, by mapping the logistics chain, monitoring goods on the move and reviewing their logistics contracts, they can reduce both food waste and financial risk.

WTW can support this process through risk analytics, contract reviews and tailored insurance cover.

Footnotes

  1. Food and Agriculture Organisation (FAO) Global Food Losses and Waste Return to article
  2. Food and Agriculture Organisation (FAO) The state of food and agriculture moving forward on food loss and waste reduction Return to article

Disclaimer

WTW hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Authors


Director – Global Marine, International Trade & Logistics

Marine National Team Leader

Global Food and Beverage Leader

Contact


Randi Harwood
Global Client Advocate

Related content tags, list of links Article Marine Marine Food, Beverage and Agriculture
Contact us