July 5, 2020 Jyoti

How to Take the Risk Out of International Container Logistics

Warehouse Logistics - Ante Air Logistics

            Logistics Warehousing Supply Chain Management

Trust plays a crucial role for any business to function effectively. What’s scarier for businesses today than all other factors combined is the dilemma of trusting individuals and service providers.

This is highly prevalent in the case of container owners who encounter trust issues when it comes to international shipments. The uncertainty over whether the resources will be properly delivered to the prospective customers without getting damaged is challenging for many.

Even if the containers are returned in bad conditions and there are legal Damage Protection Plans to compensate for the loss, the real point of worry is the change in customer perception. In simple terms, the change of opinion towards the product and the business provider.

There is no doubt that dissatisfied clients may not only choose to discontinue services forever but may also recommend against the vendors to their known contacts.

Thereby in such a situation, the risk is getting doubled as vendors not only lose an existing customer but also a potential lead. A bad reputation can tarnish the hard-earned business image.

Some of the possible risks involved in international container logistics involve, loss and damages to containers, incurring unexpected additional costs, experiencing delays, miscommunications, inaccurate documents, container shortage, freight rate fluctuations, and disruption of services in the supply chain.

The external elements that may contribute to the risks are fire, flood, theft, yard cranes, mishandling, etc.

Reports by the Statista Research Department states,

In terms of value, it is believed that global seaborne container trade accounts for approximately 60 percent of all world seaborne trade, which in 2017 was valued at approximately US$ 12 trillion.

The world’s merchant container ship fleet had a deadweight capacity of around 266 million metric tons in 2019. As of January 2019 the world’s merchant fleet had 5,152 container ships.

Globally, containerized seaborne cargo stood at about 1.83 billion tons loaded in 2017.

Some of the ways in which your business can mitigate the risk of international container logistics include,

Choosing only those companies that have a strong social media and digital presence.

Good user ratings and reviews are highly influencing factors that govern customer decisions. Because internet searches are the most viable and easiest methods customers use to find new businesses.

For the international movement of goods, there should be proper documentation that complies with licensing requirements, regulations, and policies.

The documentation should additionally contain relevant information including customs documents, import permits, certificates of origins, health and safety certificates, commercial invoices, etc. There should be accuracy in detail as any form of discrepancies may cause delays.

Utilizing technological tools to enhance the services and to optimize the entire process.

Various tools provide unique security benefits. For example, electronic locks that cannot be tampered, reusable seals that automatically track the number of times a container might be opened, Unique Barcodes, RFID tags, and GPS trackers for monitoring the cargo and vehicles, and web-based services that provided status updates and tracking details to the customers.

Thorough background checks of all businesses and third parties involved.

Hire only those personals who have expertise in dealing with foreign countries and for whom language is not a barrier. Dealing with trusted agents is important who has adequate knowledge of rules, policies, and procedures of the destination country.

Having proper contracts with insurance companies so that the unexpected losses can be covered in cases of discrepancies.

The contract should also include detailed information regarding shipment contents and immediate emergency response practices that must be taken while transporting hazardous materials.

Other practices for mitigating the risks involved include,

Selecting only direct route or single stop itineraries to deliver products, avoiding shipping to high-risk areas that have higher crime rates, keeping the shipment and related information confidentially.

Most importantly minimizing the risk by building a stable logistics network to nullify the severity of issues.

This also includes risk hedging i.e. distributing the risk among multiple suppliers, following stick procedures, purchasing insurance, and having an integrated information system that provides complete logistics visibility. (Source)

Implementing the above-mentioned risk managing strategies for international container logistics operations can prove beneficial to build a reliable network while stepping into uncharted territory.

The competitive advantage gained through foreign trade can be easily erased by any kind of mishaps such as loss of products, robbery and damage. Therefore it is important for businesses to plan and execute risk management systems in order to protect the shipments, and increase protection.

There shouldn’t be any chances of loopholes. Avoid mismanagement by planning ahead of time.


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