What Are The Risk Management Strategies For Freight Forwarders?

Supplying goods from place to place involves a lot of processes. Freight forwarding is an integral part of the supply chain. Without freight forwarders, it would be difficult for you to transport your goods. It is a complex process and demands attention-to-detail.

Freight forwarders are there to ensure safe transportation while mitigating the risks associated. You may be wondering what could be the possible risks for freight forwarding. However, you need to know that when your goods are in transit, they are vulnerable to theft, damage, and other risks.

Therefore to mitigate such risks, there are risk management strategies for freight forwarders. Understanding the types of risks will help in planning out a better strategic plan for them.

Threats To Freights

The most common threats to cargo are:

  • Theft, break-ins, or hacking the database
  • Theft of trailers at rest points
  • Hijacking transport vehicles
  • Financial risks such as cost overruns or shortage of budget
  • Environmental risks and weather changes
  • Socio-political risks such as moving good across borders
  • Accidents
  • Price fluctuations of fuel
  • Increased insurance premiums
  • Delays

Risk Management Strategies For Freight Forwarders

Crime Management

Most criminals today know how to hack records and databases. Many times it is an inside worker who gives information about the goods being loaded, routes being planned, and cargo being hauled. It is difficult to find out any suspected individual before the crime occurs.

However, freight forwarders can take some steps to ensure that the hired individuals are not a risk to the company. It is advised not to mark the boxes with what is in them. Avoid dangerous routes that may make your trucks an easy target for criminals.

Technology Usage

Technological developments have spurred innovations for providing security in supply chains and logistics. GPS systems and advanced seals, electronic locks, and security systems prevent thieves from breaking in easily.

GPS trackers using Electronic Data Interchange (EDI) provide exact location details and delivery times. This feature helps mitigate situations such as hijacking.

Proper Training

It is crucial to have trained personnel and drivers for safe transportation. This is especially true for driver’s training. They may not know how to load or unload certain goods or which materials are fragile. Once they know this, damage to goods can be avoided.

Sudden Weather Changes

Extreme weather changes are one of the significant risks in freight management. Ocean storms, snowfall, or thunderstorms can cancel or delay the transportation of goods. Freight management companies need to re-evaluate the routes they previously planned. They can optimize their voyage plan using a weather routing system.

Consider other modes of transportation if possible and how far you can extend the date. Plan as far ahead as possible to avoid end-time delays.

Compliance With Regulations

Suppliers must understand the risks associated with what is being transported. Special care should be taken for transporting items such as pharmaceutical products, combustible materials, or dangerous gases.

Correct compliance with all regulations is necessary to avoid any delays, confiscations, and deviations of transportation. A company can:

  • Identify packaging requirements in transitional and destination countries
  • Adhere to international transportation requirements for packaging materials
  • Having an export license for international trade
  • Consider package recycling options
  • Have highly specialized transport operations for the movement of hazardous materials

As a transport company, you are liable for any damage or loss that occurs. Environmental impairment is a new type of risk that is surfacing. In this case, the company would be responsible for damaging the ecosystem.

Tips For Risk Management At A Glance

Glancing over the risks and their management strategies, you can develop a risk management plan based on the points below:

Identify Risks

Identify the areas of your organization with risk exposure. Evaluate them and identify what can disrupt your processes.

Prioritize

Prioritize the mitigation steps for each of these tasks according to their severity level. Develop emergency contingency plans for high-impact scenarios.

Use Technology

Use the latest technologies to mitigate different types of risks.

Have Partners In Risk Planning

Work with suppliers, people, and customers who have risk planning and business continuity plans. Those plans should align with you.

Compliant To Regulations

Read about all the international trading rules and regulations. Follow them to avoid environmental, economic, or socio-political risks.

Maintain Quality

Maintain your standards of providing freight management services. Review risks periodically to avoid any damage to your company and customers.

DSONS Transport ensures top-notch freight management services while limiting all risks. We deliver timely and safely. Get in touch today.

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