Time delays and disruptions in logistics can lead to significant financial losses, especially in sectors where timing is crucial. Traditional cargo insurance often overlooks delay risks, focusing instead on damages and losses.
The recent global climate, marked by geopolitical disruptions and natural crises like the Red Sea blockade and Panama Canal issues, has underscored the importance of delay insurance, avoiding a potentially significant financial burden in the event of difficult circumstances.
“With a focus on mitigating the risk of delays—a predominant concern in the industry— Otonomi’s insurance offerings cater to a wide array of high-stakes cargo sectors, including life sciences, pharmaceuticals, critical automotive, aviation, perishables, semiconductors, and even specialised niches,” Yann Barbarroux, Otonomi’s CEO explained.
“We fill a gap by offering insurance specifically for delays, providing a crucial safety net for freight forwarders and operators.
“This coverage is essential for industries where delays can disrupt production lines, cause contractual penalties, and lead to lost sales.
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Technological integration
One of Otonomi’s primary selling points is addressing the outdated nature of traditional insurance and logistics. The integration of cutting-edge technology, which allows for rapid response times, provides quotes in seconds and resolves claims within hours, positioning itself as 20 to 25 times faster than industry standards.
This efficiency is a significant change from the traditional methods, where clients are used to dealing with voice orders, paperwork, and long waiting times. With their system, time delays are immediately detected thanks to advanced cargo tracking powered by visibility platform’s API services, and claims are generally paid out in a matter of a few days.
“We have two main models for our service. The first is a white-label solution, offering a turnkey portal to freight forwarders, cargo operators, and cargo platforms. The second model involves API and embedded insurance,” Barbarroux said.
“For instance, in Peru, cargo operators can use their own brand and UI, integrating our embedded widgets or solutions within their existing platform to create a seamless experience. We’ve seen demand for both models. Our team of engineers is always ready to adapt and deliver solutions quickly to meet customer requirements.”
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Speed and scale
Airfreight is in a stronger position than it was five years ago in terms of embracing innovation, with a clear upward trajectory.
Companies are not just passively observing; they’re actively seeking solutions to enhance trade efficiency and positively impact their bottom line, as well as their top-line growth. Offering flexibility is key.
Generally, bringing a new cargo product to market involves a three to six-month procurement and onboarding process, costing potentially hundreds of thousands or even millions of dollars.
Otonomi just launched a parametric maritime delay insurance product that opens up to a global market, 40 to 50 times the size of air cargo.
“Our solution is self-contained. Users can log in without needing any integration unless they opt for the API, which can be set up in a few weeks with a light touch and tactical approach. This is probably the best short-term strategy,” Barbarroux declared.
“Ultimately, we want our insurance products to be a seamless service within our clients’ workflows. Achieving this will take a few years, but it’s a realistic goal. Being tactical in how we serve our clients is the best approach.”