Over the past 7 years, there have been $8B+ in losses to the cargo market due to significant events like fires, natural disasters, and other miscellaneous occurrences.* This total is still pending the damages from Hurricanes Harvey, Irma and Maria, as the losses from those storms are still being tallied. To that end, we’re starting a series of articles that reports on these significant losses to the cargo market. Our inaugural article focuses on the losses associated with the tornadoes in Nashville, Tennessee.
This past March, powerful tornadoes with wind speeds up to 165mph tore through Nashville and the surrounding counties. The storms killed 24 people and caused severe damage to homes, businesses, schools, and churches. The estimated cost of all damages was $1.1 billion, according to the National Centers for Environmental Information.
Reports of the devastation the tornadoes caused in Nashville dominated news outlets for days. Everything from power to transportation systems were affected, and citizens are still rebuilding. What many people may not know is that the cargo industry suffered some big losses as well. In particular, Dell, CEVA Logistics, and FedEx sustained damages. Here’s what we know:
- Dell: The company’s corporate offices and several partner fulfillment centers are located in the Nashville region. While its offices remained unharmed from the tornadoes, Dell confirmed that multiple partner facilities were damaged by the storm. It’s estimated that cargo underwriters must pay $300 million for losses stemming from a Dell storage facility.
- Ceva Logistics: In Mount Juliet, outside of Nashville, Ceva Logistics facilities were significantly damaged by the tornadoes. The Tennessean reported that two buildings sustained heavy damage and one moderate.
- FedEx: Also in Mount Juliet, a FedEx ground operations building suffered tornado damage. Additionally, two FedEx supply chain buildings were hit hard by the storm in Lebanon, TN.
As a result of the tornado losses, the cargo market is paying closer attention to catastrophic peril and occurrence definitions, as well as multi-occupancy aggregation at locations. Stock throughput programs may be impacted by more restrictive contract wording, increased deductibles, reduced aggregate limits, and/or capacity for a price.
*Source: IUMI 2019 Toronto Conference, Cargo Chairman Report