Global disruptions and rapid changes in some areas mean that businesses reliant on supply chains are adjusting how they dispatch and receive goods and this has implications for transport and logistics operators. Exchange-rate volatility, changes in tariffs or moving manufacturing of goods to a different location are factors that highlight the importance of reviewing insurance terms to ensure protections remain effective.
Some of the key risks to consider should include how the effects of macro influences translate to Australian transport businesses. This is because localised events such as blocked waterways, bridge collapses, droughts and local conflicts can have far-reaching impacts for transport and logistics operators.
How these play out is illustrated by the knock-on problems arising from the normal marine shipping routes being diverted around the Cape of Good Hope at the southern tip of Africa for safety, adding an extra 10 days to the voyage, resulting in additional costs.
Transitional overseas ports aren't equipped to handle the increased volume of traffic, creating backlogs. Locally, port dwell times in Sydney have increased due to the logistics involved with rescheduled arrivals and backlogs, causing disruptions to supply chains and additional costs for cargo owners and transport operators whose logistics schedules are also disrupted.
For Australian trucking operators waiting on ports to transfer cargo, every day off the road can cost them thousands in loss of revenue and they risk losing contracts due to delayed deliveries.
Detrimental factors in supply chain delays for transport and logistics
Due to its size, Australia's infrastructure is widely dispersed, making transport more vulnerable to weather events which are increasing in impact due to heightened frequency, severity and geographical spread. Local weather events such as heavy rain and flooding can make some roads impassable, forcing drivers to use alternative routes, with inland detours adding to costs.1
These conditions involve rerouting, extra time and increased costs may require enhanced insurance protection on transported goods and may also indicate the need for additional coverage to provide for disruptions to business.
Along with interruptions to normal operations, increased risks include detour expenses, fuel consumption, fatigue, missed deliveries, loss or damage of goods. Partly because of delays, theft and piracy have risen in some trade routes.2
In terms of local deliveries in Australia one-fifth of parcels were reported stolen in 2024-25. (Parcel loss isn't covered by the same insurance as traditional cargo policies.)3 Other potential issues could extend to the use of electric vehicles or hydrogen fuel cells in batteries in deliveries and how local conditions such as the effect of bulldust on equipment may come into consideration.
The importance of risk management and the right insurance coverage
Transport and logistics operators that have proactive risk and contingency plans can recover faster and deal with minor incidents such as driver illness, road closures and absorbing increased fuel costs more capably.
Effective planning includes considerations like:
- using reliable vehicle schedules
- driver training to upskill employees
- disaster accommodations
- knowing the high-risk corridors
- having pre-approved repair and towing partners
- internal protocols for route changes
- alternative contractors
so, drivers know who to call and what happens next.
Transport operators also need to implement risk management protocols around loading procedures, for example, mandatory rest stops, underpinned by robust insurance coverage.
Choosing the right insurance for your transport operation
Heavy motor vehicle insurance policies are generally based on the number of vehicles an operator owns and split between 'transport pack' or 'fleet' policies.
Traditional transport pack policies can be used to bundle all the coverage transport operators require in a single policy including motor, carriers, public liability and business interruption.
The inclusion of business interruption cover can be useful for smaller operators to cover either lease repayments or a hire of another unit while their own vehicle is being repaired. The sum is normally preset and an excess period of seven days usually applies.
Note: Mechanical breakdowns are excluded.
Insurance for transport operators often involves stringent conditions such as travel radius restrictions, driver acceptance (age and/or license experience) and the types of goods carried. This is where an experienced broker can be invaluable for scrutinising policy terms to ensure they meet individual operator's needs.
Fleet policies are generally more flexible with restrictions but normally provide cover for the motor component only.
Since each Insurer offers varying levels of covers and sub-limits it's imperative for the operator to review any restrictions with their broker, focusing on policy wordings or endorsements to ensure the coverage will be adequate in the event of a loss.
In determining an insurance premium underwriters will review the following information:
- business experience/how long the insurer has been operating
- assets and sums insured
- radius required
- goods carried
- age/experience of the drivers
- claims history, including value and frequency.
Why choose Gallagher for your transport operation?
If your operation relies on marine transit for any of its deliveries, insurance against damage or loss is essential. Gallagher has more than 40 years of specialised experience in transport, logistics and distribution, offering deep industry knowledge and tailored risk management solutions. Our brokers focus on understanding unique industry risks, regulations and claims, leveraging specialists and long-standing industry relationships to provide comprehensive cover for fleets, freight and logistics.
