The ROI of Automated Reefer Monitoring Part 1: Reducing claims losses

Let's discuss cargo loss claims. What causes them, and how do they affect terminals financially? More importantly, how can monitoring refrigerated containers help boost your profits by reducing these avoidable costs?

Spoiler Alert: If you thought you’d get a straightforward answer about ROI, you might be in for a surprise because it’s a bit more complicated than it looks.

But you probably figured that out.

The Reefer Monitor | Issue #15 - January 2025

Automating reefer data collection can really trim costs and make things run more smoothly at your terminal. It helps reduce cargo loss claims, boosts safety, and lowers insurance claims, too. Plus, it makes everything run more efficiently by improving data integration and analyzing energy use. In the end, automated reefer monitoring is beneficial for everyone involved.

Regarding cargo losses, ideally, we would highlight specific data trends related to spoiled cargo claims before and after installing automated reefer monitoring at marine terminals. This information would provide valuable insights and showcase the impressive return on investment (ROI) achievable through automated reefer data collection compared to manual inspections.

However, obtaining this information can be challenging. Data that could negatively reflect on terminal operations is often not shared, as it may threaten potential business opportunities. Unless it demonstrates significantly reduced cargo loss claims, terminal operators are likely to keep such information confidential. After all, who would want to disclose damaging data?

Despite this, every terminal operator knows how valuable refrigerated cargo is and how serious the risks are when things go wrong. Just think about it: a single claim for a refrigerated container can cost around USD 38,000. So, even a few claims can really add up to big losses.

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Calculate the cost.

Start by analyzing the data on reefer cargo claims that your terminal has encountered over the past year. Historically, mechanical failures in reefers account for 36% of these claims, making them the most common issue. Temperature variations follow closely behind, representing 29% of the claims. Other frequent causes include failure to connect reefers to ground electricity, incorrect setpoints, and data entry errors, such as Celsius/Fahrenheit conversions. Additionally, consider the financial impact these claims have had on your terminal.

Think about the potential value in lost revenue these losses represent. What if it was allocated more effectively within your terminal? How would you utilize that capital? You might upgrade outdated systems, enhance aging infrastructure, or finally undertake long-awaited yard expansion projects.

Automated reefer monitoring can help you achieve these and many other strategic goals.

Investing in a remote reefer monitoring system can be a long-term investment that offers continuous returns by reducing claims. Once you gather sufficient data regarding your terminal's reefer cargo loss performance, the initial cost of implementing automated reefer monitoring will become less significant. Consider this: implementing automated reefer monitoring will likely pay for itself quickly and soon deliver a cost-positive return.

Here’s how it works.

RTE's monitoring platform, called GRASP, enables users to proactively address all the reefer issues highlighted above before they turn into losses. GRASP delivers real-time notifications to responsible managers and yard personnel about conditional changes in every connected reefer as they occur.

Remember our examples of reefer mechanical failures and temperature variations. Combined, they account for 65% of all losses. Automation offers 24/7 visibility over the reefer yard, enabling quick responses when failures happen. This proactive approach to reefer management increases operational efficiency and provides measurable reductions in spoiled cargo.

Automation significantly speeds up the process and improves accuracy compared to manually checking each reefer individually throughout the yard. It helps prevent delays and reduces the likelihood of errors going unnoticed for hours between shifts.

As the demand for refrigerated container shipping is projected to grow by 6% annually through 2029, delaying the automation of reefer data collection will only extend your annual losses due to cargo spoilage. While sharing loss claims data can negatively impact potential business opportunities, this perception can easily change. With precise data collection made possible by automated reefer monitoring, you can confidently share success stories in reefer management.

This transparency will surely build trust and enhance your business growth potential—and that's an ROI that everyone will appreciate.

Your next steps:

1. ?Collect your current claims data.
2. Analyze the impact reefer loss claims are having on profitability.
3. Contact RTE for a detailed quote tailored to your specific reefer monitoring requirements.
4. Compare the results.

Let’s get started.