In 2025, South African businesses are navigating one of the most turbulent marine cargo landscapes in decades.
Three converging factors are reshaping the risk environment and putting intense pressure on logistics planning, cargo security, and insurance protection:
- Tariffs and trade disruptions: South Africa faces a sharp increase in tariffs, including a 30% hike from the US. For an economy that heavily depends on international trade, these tariff pressures are significantly raising costs. Businesses are being forced to rethink procurement strategies, logistics budgets and risk planning as financing becomes more strained.
- Red Sea shipping disruptions: The ongoing conflict in Yemen has made the Suez Canal unreliable, pushing vessels to reroute around the Cape of Good Hope. This has placed South Africa back on a key global shipping lane, but at a cost. Transit times are longer, port congestion is rising and freight rates have surged. Traditional cargo insurance often excludes delay-related risks, leaving critical exposure uncovered.
- Climate and environmental volatility: Extreme weather events – from floods and droughts to storms disrupting major ports – are no longer rare occurrences. These events are now recurring challenges. In a climate-altered world, cargo risks are increasingly tied to environmental instability, demanding more adaptive insurance solutions.
A new strategic lens: risk capital
“The need to reframe marine cargo insurance through a risk capital lens has never been greater,” says Natalie Cooper, senior marine and aviation broker at Aon South Africa: This tension between businesses and insurers are tightening terms, limiting coverage, and excluding delay or disruption-related losses. Businesses must look to alternative capital tools such as:
- Parametric insurance: Trigger-based coverage offering rapid payouts without needing proof of loss
- Captives and cell captives: Self-insurance structures offering customisable, cost-effective risk retention
- Structured solutions: Including insurance-linked securities (ILS) to access global investor capital
- Facultative reinsurance: Bespoke risk placements for high-exposure or hard-to-cover threats
This capital-agnostic approach enables companies to think beyond policies – and instead build integrated risk strategies that protect margins, support growth and enhance resilience.
Six strategic shifts for resilient cargo risk management include:
- Reframe insurance as capital strategy, not just cost
- Adjust tactics to match changing tariffs and trade tensions
- Explore non-traditional capacity for expanded protection
- Use analytics to understand exposure and optimise cover
- Adopt parametric and tech-driven solutions for faster recovery
- Take a global view – access borderless capital and support
“Partnering with seasoned risk advisors is essential. It ensures businesses fully explore and integrate both traditional and alternative tools into a cohesive, future-proof marine cargo programme,” Cooper concludes.
Supplied by Aon South Africa, edited by Eamonn Ryan