Global Shipping

Full Speed Ahead

A dispute delaying Panama Canal construction was resolved, but further delays could be costly to shippers and exporters.
By: | March 25, 2014 • 3 min read
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Any further delays to widen the Panama Canal could have far-reaching cost implications for all parties involved in the construction project and the shipping companies and exporters who use the Canal, a marine risk expert warned.

The Panama Canal Authority (ACP) signed a deal this month to end a four-month dispute — and a two-week work stoppage — over $1.6 billion in cost overruns claimed by the Grupo Unido por el Canal consortium (GUPC) carrying out the work. The dispute had threatened to derail the whole project, which now is expected to cost nearly $7 billion.

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Under the terms of the agreement, the Authority and the Spanish-led construction consortium will each invest an extra $100 million in the project.

Zurich North America, which holds $400 million surety bond on the project, “worked diligently with the ACP and GUPC to reach an agreement on the matter and fortunately the two sides have had a successful negotiation,” said Michael Bond, head of surety, Zurich North America. “We congratulate both of them on effectively reaching a favorable outcome. Zurich was glad to have played a role in a solution that brought the project forward.”

When the Canal expansion is completed in December 2015, the new third lock will house 12 giant lock gates designed to allow larger cargo ships through, and double the shipping lane’s capacity.

But Douglas Sakamoto, class underwriter, marine, Liberty Specialty Markets, warned that any further interruptions could result in shipping delays, increased costs and lost shipping tolls.

“The forecast for work to be completed has changed from 2014 to 2015, which is still not a massive delay when compared to the dimension of the work and the expectation in terms of international trade turnaround,” Sakamoto said.

“However, a longer delay could impact several international trade industries since there are lots of related ongoing investments, such as work on several international ports to adapt them to the new vessels, and orders placed for the new-Panamax vessels.

“If the work can’t be completed for any reason and costs still continue increasing, there are a number of serious implications such as the termination of the agreement with the current consortium, and the bond policy may be required in order to provide the extra amount needed to complete the work.”

When done, the Panama Canal Authority is expected to double the $1 billion in revenue it currently receives from shipping tolls.

With more than 13,000 ships passing through the Canal every year, Sakamoto said, construction delays could mean restrictions in the amount of goods producers can export as well as increasing the time it takes to ship the goods.

He noted that producers of commodities, such as LNG, which are exported from the U.S. Gulf Coast to target markets like Asia and the west coast of Latin America could be affected.

In addition, grain producers in the Brazilian ports of Itaqui, Suape and Pecém would also lose out on shorter shipping times, he said.

Shipping companies that have invested heavily in new-Panamax vessels orders several years ago would similarly miss out on vital revenue, Sakamoto said.

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International port authorities that have poured vast amounts of money into developing their ports for larger vessels and cargo volumes would also be adversely affected, Sakamoto said.

Pressure to meet the new deadline for completion of 2015, he said, could also impact labor force costs and suppliers.

“The Panama Canal construction project has been highly debated,” said a spokesman for Allianz Global Corporate Specialty, “but it’s actually not unusual for a large construction project to run over/get delayed. In fact, that’s why with project cargo coverage, there is a particular element called ‘delay in start up’ protection to help mitigate that risk.”

Work on the Canal project is now 70 percent complete; however the delay has come at a considerable cost to Sacyr, the Spanish building company that is leading the consortium, which saw its share price drop 6.9 percent this month following a breakdown in initial talks.

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]
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Infographic: The Risk List

6 Non-Cyber Risks for Technology Companies

Tech firms face multiple perils in addition to cyber risks.
By: | July 9, 2014 • 2 min read

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The Risk List is presented by:

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The R&I Editorial Team may be reached at [email protected]
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Sponsored Content by IPS

Managing Chronic Pain Requires a Holistic Strategy

To manage chronic pain and get the best possible outcomes for the payer and the injured worker, employ a holistic, start-to-finish process.
By: | August 3, 2015 • 5 min read
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Chronic, intractable pain within workers’ compensation is a serious problem.

The National Center for Biotechnology Information, part of the National Institutes of Health, reports that when chronic pain occurs in the context of workers’ comp, greater clinical complexity is almost sure to follow.

At the same time, Workers’ Compensation Research Institute (WCRI) studies show that 75 percent of injured workers get opioids, but don’t get opioid management services. The result is an epidemic of debilitating addiction within the workers’ compensation landscape.

As CEO and founder of Integrated Prescription Solutions Inc. (IPS), Greg Todd understands how pain is a serious challenge for workers’ compensation-related medical care. Todd sees a related, and alarming, trend as well – the incidence rate for injured workers seeking permanent or partial disability because of chronic pain continues to rise.

Challenges aside, managing chronic pain so both the payer and the injured worker can get the best possible outcomes is doable, Todd said, but it requires a holistic, start-to-finish process.

Todd explained that there are several critical components to managing chronic pain, involving both prospective and retrospective solutions.

 

Prospective View: Fast, Early Action

IPS_BrandedContent“Having the wrong treatment protocol on day one can contribute significantly to bad outcomes with injured workers,” Todd said. “Referred to as outliers, many of these ’red flag’ cases never return to work.”

Best practice care begins with the use of evidence-based UR recommendations such as ODG. Using a proven pharmacological safety and monitoring opioid management program is a top priority, but needs to be combined with an evidence-based medical treatment and rehabilitative process-focused plan. That means coordinating every aspect of care, including programs such as quality network diagnostics, in-network physical therapy, appropriate durable medical equipment (DME) and in more severe cases work hardening, which uses work (real or simulated) as a treatment modality.

Todd emphasized working closely with the primary treating physician, getting the doctor on board as soon as possible with plans for proven programs such as opioid Safety and Monitoring, EB PT facilities, patient progress monitoring and return-to-work or modified work duty recommendations.

“It comes down to doing the right thing for the right reasons for the right injury at the right time. To manage chronic pain successfully – mitigating disability and maximizing return-to-work – you have to offer a comprehensive approach.”
— Greg Todd, CEO and founder, Integrated Prescription Solutions Inc. (IPS)

 

Alternative Pain Management Strategies

IPS_BrandedContentUnfortunately, pain management today is practically an automatic move to a narcotic approach, versus a non-invasive, non-narcotic option. To manage that scenario, IPS’ pain management is in line with ODG as the most effective, polymodal approach to treatment. That includes N-drug formularies, adherence to therapy regiment guidelines and inclusive of appropriate alternative physical modalities (electrotherapy, hot/cold therapy, massage, exercise and acupuncture) that may help the claimant mitigate the pain while maximizing their ongoing overall recovery plan.

IPS encourages physicians to consider the least narcotic and non-invasive approach to treatment first and then work up the ladder in strength – versus the other way around.

“You can’t expect that you can give someone Percocet or Oxycontin for two months and then tell them to try Tramadol with NSAIDS or a TENS unit to see which one worked better; it makes no sense,” Todd explained.

He added that in many cases, using a “bottom up” treatment strategy alone can help injured workers return to work in accordance with best practice guidelines. They won’t need to be weaned off a long-acting opioid, which many times they’re prohibited to use while on the job anyway.

 

Chronic Pain: An Elusive Condition

IPS_BrandedContentSoft tissue injuries – whether a tear, sprain or strain – end up with some level of chronic pain. Often, it turns out that it’s due to a vascular component to the pain – not the original cause of the pain resulting from the injury. For example, it can be due to collagen (scar tissue) build up and improper blood flow in the area, particularly in post-surgical cases.

“Pain exists even though the surgery was successful,” Todd said.

The challenge here is simply managing the pain while helping the claimant get back to work. Sometimes the systemic effect of oral opioid-based drugs prohibits the person from going to work by its highly addictive nature. In a 2014 report, “A Nation in Pain,” St. Louis-based Express Scripts found that nearly half of those who took opioid medications for more than a month in their first year of treatment then refilled their prescriptions for three years or longer. Many studies confirm that chronic opioid use has led to declining functionality with reduced ability to recover.

This can be challenging if certain pain killers are being used to manage the pain but are prohibitive in performing work duties. This is where topical compound prescriptions – controversial due to high cost and a lack of control – may be used. IPS works with a reputable, highly cost-effective network of compound prescription providers, with costs about 30-50 percent less than the traditional compound prescription

In particular compounded Non-Systemic Transdermal (NST) pain creams are proving to be an effective treatment for chronic pain syndromes. There is much that is poorly understood about this treatment modality with the science and outcomes now emerging.

 

Retrospective Strategies: Staying on Top of the Claim

IPS_BrandedContentIPS’ retrospective approach includes components such as periodic letters of medical necessity sent to the physician, peer-to-peer and pharmacological reviews when necessary, toxicology monitoring and reporting, and even addiction rehab programs specifically tailored toward injured workers.

Todd said that the most effective WC pharmacy benefit manager (PBM) provides much more than just drug benefits, but rather combines pharmacy benefits with a comprehensive ancillary suite of services in a single portal assisting all medical care from onset of injury to RTW. IPS puts the tools at the adjustor fingertips and automates initial recommendations as soon as the claim in entered into its system through dashboard alerts. Claimant scheduling and progress reporting is made available to clients 24/7/365.

“It comes down to doing the right thing for the right reasons for the right injury at the right time,” Todd said, “To manage chronic pain successfully – mitigating disability and maximizing return-to-work – you have to offer a comprehensive approach,” he said.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with IPS. The editorial staff of Risk & Insurance had no role in its preparation.




Integrated Prescription Solutions (IPS) is a Pharmacy Benefit Management (PBM) and Ancillary Services partner to W/C and Auto (PIP) Insurance carriers, Self Insured Employers, and Third Party Administrators who specialize in Workers Compensation benefits management.
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