Managing Risk With a Freight Forwarder
Part of running a successful business is understanding the risk vs the wins. Taking risks is a part of growth. However, mitigating these risks and ensuring the gains weigh in your favour is the secret to success. For international shipping, one of the critical roles of a freight forwarder is to minimise and manage the associated risks. It is our role to act as the middleman, making it easy and straightforward for individuals to move their goods from one country to another. In this guide, we’ll look at how working with the right freight forwarder will work to manage these risks.
What Risks Exist in International Shipping?
Let’s first take a look at the different risks associated with international shipping. Some key ones include:
- Damage or loss of cargo.
- Additional costs that weren’t previously accounted for.
- Delays within the supply chain.
- Fluctuations in insurance premiums.
- Fluctuations in supply and demand which impact costs.
- The financial risk with payments.
- Ethical challenges with suppliers.
Some of the risks listed above, including damage or loss of cargo, are true of local shipping too. However, many are specific to the movement of international trade. Passing goods throughout different countries requires them to abide by a multitude of laws, regulations, and legal rulings. If there is any lenience or confusion over terms and conditions, requirements, etc, this is where the risk begins to outweigh everything else.
Understanding international shipping risks is the first step to recognising how to manage and minimise these.
How to Choose the Right Freight Forwarder?
As we mentioned above, working with the right freight forwarder is vital when it comes to risk. Both individuals and companies working within this field will have built up the experience and a reputation. They are able to identify risk, put into play procedures to minimise this, and advise on how best to manage it in times where risk cannot be ignored. So, the first step to working intelligently with international shipping risk is to choose the right freight forwarder. We have written a blog with 5 questions to ask your freight forwarder here. However, for the initial stages of your research, we recommend you:
- Ask for word-of-mouth recommendations or testimonials.
- Understand their experience and any specialities.
- Ask about their scope of contacts and understand whether they are best suited to help with your specific deliveries.
- Check their insurance offerings and research the costs of any additional requirements.
- Get an understanding of the scope of their packages.
- Find out whether they are members of trade bodies or hold any relevant accreditations.
Freight forwarders have a wealth of responsibility towards their clients. They are the key link between the two countries and the cargo moving between them.
How a Freight Forwarder Manages Risk on Your Behalf
International trade, as we have mentioned above, has a host of somewhat unavoidable risks. Freight forwarders are there to mitigate this. International trading conditions and insurances are there to help manage the risk associated with this movement.
Relevant Trading Conditions
Freight forwarders provide a set of trading conditions to their clients that are agreed on collectively. This outlines the services that are provided, information about what insurances are provided and what they cover, and ensures payment to the relevant bodies once the job is completed. Freight forwarders produce these documents as self-preservation as well as to benefit the needs of the client. This agreement ensures that the information shared between a freight forwarder and the client is clear, truthful, and fully disclosed.
At Radius Warehouse and Logistics, we are members of the BIFA (British International Freight Association). Our trading conditions are based on the BIFA 2005 Standard Trading Conditions and act to serve all parties.
Loss and Damaged Goods
When a freight forwarder takes ownership of cargo, it becomes their legal responsibility to take necessary steps to protect and preserve that consignment. To do this, we manage everything from the storage and movement of goods through to the regulation of information including:
- Ship departure times.
- Import regulations for the destination country.
- Duty rates.
Incorrect information here can cause delays, impact the likelihood of loss and damage and cause disruption to the supply flow. To minimise this and offer protection for both clients and the freight forwarder, relevant insurance is vital.
Freight forwarders also play a key role in packaging suggestions, ensuring that goods remain intact and undamaged during movement. They take into account ease of handling, risks that could arrive during transit, and relevant protection when considering how these goods will move in between companies. These considerations are built from years of experience, understanding the materials, and individual challenges of this complicated environment.
Hazardous or Dangerous Goods
Transporting goods that fall into the hazardous or dangerous category presents unique risks. There are particular requirements for documentation and limitations, depending on the destination company. To do so, freight forwarders need to be thorough with the documentation and instructions provided. Different modes of transport have different compliance regulations depending on the goods in question. This will dictate the businesses and routes that cargo is allowed to travel through to reach its end destination. Without the knowledge and support of a freight forwarder, it’s easy to encounter delays or complications during the customs clearance process.
One of the key roles of a freight forwarder is to organise the clearance of goods through customs. This stage required well-ordered and accurate documentation as well as ensuring the right information is provided at any given time. The risk of delayed or lost shipments increases when the customs process is not managed appropriately. Freight forwarders ensure that everything required is collated, checked, and packaged together in advance – including directions to the final transportation company that is responsible for delivering goods to its end destination.
By taking on the organisation and management of your international movements, freight forwarders are the driving force in mitigating risk to your business too. Here at Radius Warehouse and Logistic Services, we have over 25 years of experience with international logistics trade. Our professional team works hard to manage risk and ensure the smooth transportation of goods to their end destination. If you need a quote or would like to speak to a member of our team, get in contact with us today.