Following the Path of the Transport Revolution
TT Club, established to fill a gap in insurance as the freight container revolutionized trade, celebrates 45 years dedicated service to the transport and logistics sector.
In 1956, the first strengthened containers were loaded onto a spar deck of the converted tanker, Ideal X. This marked the fulfilment of a dream for American trucker Malcom McLean who had, since 1937, been working on how to reduce the long waiting hours for dockers to stow or unload his vehicles onto or off ships. The container age was quietly born.
It was McLean's significant involvement that set the wheels in motion to put containerization into practice, but it was not until 1968 that the first purpose-built cellular container ship took to the high seas. In the same year, the Through Transit Club, shortened to the TT Club, was formed with the principle purpose of providing shipowners with insurance protection for damage to the containers on both land and sea.
The onset of containerization revolutionized international freight transport forever. Trucks were no longer unpacked at the docks, their contents stored in warehouses and loaded onto ships – the cargo could now be seamlessly moved from warehouse to warehouse in sealed steel containers that only needed to be opened once they had reached their final destination.
This however changed shipowner’s insurance requirements. Whereas before they only needed insurance cover ‘port to port,’ they began to assume responsibility for the transportation of the container, and the cargo inside, from ‘door to door’.
The TT Club’s formation was complicated, deftly squeezing between insurance giants, the P&I (Protection and Indemnity) Clubs and Lloyd's of London.
The P&I Clubs made a policy decision at the time that they were going to remain water borne insurers and therefore they were not prepared to cover the containers ashore, either for the risks of cargo liability or third party damage. Additionally, they also avoided insuring the ‘hulls’ of containers as this would have been viewed as an intrusion into the hull market and a breach of the informal agreement between the hull market in Lloyd’s and the P&I market, whereby Lloyd’s did not become involved in liability insurance and the P&I Clubs stayed away from hull insurance.
Faced with more or less a closed door from the P&I Clubs, shipowners who were going into containerization on the Atlantic trade were faced with either obtaining insurance from the commercial market or creating a mutual alternative. So the TT Club was established as a mutual non-profit insurer, similar to the P&I Clubs, using all premiums and investment income for paying claims, administration costs and building up reserves with the Board of Directors drawn from the Club’s membership. There were originally three joint managers all drawn from the P&I sector, although Thomas Miller assumed sole responsibility and remains the management company today.
The TT Club has maintained its tradition of responding to industry developments and customer’s requirements. In 1969 the TT Club expanded its initial insurance offering and introduced cover for container terminals and in 1988 launched its Port Authority cover to cover the landlord and non-operational risks.
In 1996 the TT Club created ClaimsTracTM, enabling the progress of individual claims to be monitored online and in 2005 in response to the lengthening global supply chain and changing role of freight forwarders the Club launched its Logistics Operator cover.
Geographically the TT Club, managed by Thomas Miller, has also reacted to market demands, opening an office in Sydney in 1976, followed by New York and Hong Kong the following year. 1995 saw offices in Genoa and Antwerp opened and, when the Asian market began to grow, the Singapore office was set up in 1997 with Shanghai, Beijing and Taiwan the next year.
The Club continues to listen to its Members to identify how its product should be developed. This approach that has served the Club so well resulted in the launch of the Cargo Product in 2010. This product enables freight forwarders to offer instant cover for their customer's cargo.
As the Club celebrates its own trading milestone on 6 June, it seems appropriate that it has recently formalized a new brand positioning of “established expertise” demonstrating its 45 years unrelenting commitment to the industry delivered through superior underwriting, claims management and loss prevention services.
The TT Club is now the leading provider of insurance and related risk management services for the international transport and logistics industry specializing in the insurance of liabilities, property and equipment for intermodal operators. It is estimated that the Club insures over 80% of all maritime containers, nearly 45% of the top 100 container liners and has an insurable interest in nearly half of the top 100 ports in the world.
Charles Fenton, Chief Executive, comments on the current position of the Club: “Serving the international transport and logistics industry for 45 years, helping our Members and insurance brokers overcome whatever challenging trading conditions they face, and putting service value at the forefront of our culture, has given us the right to say with pride that we do have established expertise.”
Its history, and response to change, has shown why TT Club now insures shipping lines, port authorities, cargo handling terminals, freight forwarders and logistics companies across the world and offers them not just cover, but superior claims handling together with expert risk management and loss prevention assistance.
Today the TT Club has over 800 members, 20 offices worldwide and over 100 highly specialized and knowledgeable employees working at what they do best – providing bespoke insurance solutions for international transport and logistics operators.
Back in 1956, McLean was far from thinking about the gap in insurance he had inadvertently created as he watched his containers being lifted onto Ideal X. However, surely he would have approved of the way the TT Club has risen to the challenge, navigating its own way to hold such a special insurance role and become a powerful and financially secure brand for its customers.