When dealing with international trade, where different freight types are used daily to move goods from one point to another, there are always risks implied that could affect your goods and cause serious loss.
Have you considered these implied risks for each transportation mode, and how insurance can protect your products and profit? Let’s take a look at some international freight risks examples and how to overcome them:
Common Freight Risks in International Shipping
Shipping goods across borders means that the products make multiple stops, and are handled by different parties along their transportation and up until they reach their final destination.
This opens the door to different risks during transit, inspection, loading, and unloading. Here are the most common international freight risks examples:
- Theft
- Damage to the goods
- Delays
- International challenges such as political instability
- Cyber threats
- Environmental hazards
- Piracy
- Shipment retention
- Legal issues
- Financial risks
It’s important to plan ahead and have proper safeguards in place to avoid any of these risks impacting your operations and budget.
Planning ahead to mitigate risks
The first step is to become familiar with how and when these risks can happen, and how each specific type of freight is more vulnerable to one or the other. Here are some strategies that can help:
- Know common hazards in global cargo transportation and their mitigation strategies.
- Identify potential global shipping hazards.
- Including the environmental risks in freight that might arise.
- Protect your business and goods through freight insurance.
- Make sure you have coverage against unexpected incidents.
As a reliable Logistics partner at EP Logistics, we help your business deal with international shipping and every process involved, including guidance on insurance and risk management so you can make better-informed decisions when it comes to the global trade of your goods.
The Role of Geopolitical Factors
If there are political disruptions, instability, or disputes at the borders, your goods are at a higher risk of sanctions, rising fees, delays, piracy, and seizures.
Geopolitical impacts on shipping can become obstacles for global trade because the Impact of geopolitical tensions on cross-border shipping operations can slow down the whole supply chain.
This is why it’s important to get Insurance that protects you from risks, damage, and loss caused by trade issues in international shipping.
Our team at EP Logistics helps you plan to reduce the risks in cross-border transportation challenges, so your supply chain is not disrupted.
Environmental Risks in Freight International freight risks examples
Environmental risks in freight are common, especially in ocean transportation.
It’s important to have contingency plans in place in case any of these challenges arise so you can quickly respond and overcome them or use alternate freight methods to avoid delays and disruptions in your operations.
Some international freight risk examples in ocean transportation include:
- Storms
- Floods
- Earthquakes
These Environmental factors affecting international logistics and supply chains cause disruptions of operations, needing to change shipping routes and methods of transportation, damage goods resulting in losses, or halt moving goods completely.
As an experienced 3PL, at EP Logistics we make sure your shipments are covered with insurance for professional ocean freight, so you can have peace of mind knowing that your goods and profits are safe under all weather conditions.
The Growing Threat of Cyber Attacks
In our digital world, and with the growth of technology, implementing innovative systems into your daily operations will bring great benefits to your supply chain.
However, it also comes with its challenges and risks, and cyber threats in logistics are the main ones for international trade.
Global freight management systems can be vulnerable to
- Hacking
- Data breaches
- Cyberattacks
- Compromise of sensitive information
- Operation disruption
Cybersecurity threats in global freight management systems show the importance of proper cybersecurity management as well as insurance that can protect you in case of any cyberattack.
Our technologies at EP Logistics help you keep your operations safe by implementing effective cybersecurity strategies and offering you guidance to choose an insurance plan for container management systems, cloud-based systems, real-time tracking, analytics, and other modern tools.
Legal Issues in Global Trade
Another challenge is presented through legal issues in global trade. Not working with experienced and knowledgeable teams can lead to:
- Misinterpretation of laws
- Non-compliance with customs regulations
- Disputes
- Penalties and additional fees
- Delays
- Shipment retention
Knowing these legal challenges in international shipping and how to address them is essential for the smooth import and export of your goods across borders.
This is why, at EP Logistics, we provide your business with expert customs brokerage to ensure your shipments are always compliant with customs requirements and regulations.
Financial Risks and Losses
Some other international freight risks examples include financial exposure in international shipping, currency, and fee fluctuations, omission of invoice payments, etc.
Becoming familiar with the main Financial risks in global trade and methods to safeguard transactions are crucial to avoiding them and protecting your profits.
At EP Logistics, our services look to avoid supply chain disruptions through top outsourced logistics and global strategies in place like giving your business access to foreign-trade zones to protect you against unexpected fee rises.
Types of Freight Insurance Coverage
Now that we’ve reviewed some international freight risk examples, let’s explore the different types of insurance and what they can do for your business:
- All-Risk Insurance: The most complete one as it covers almost all damage types except those excluded in the policy.
- Free of Particular Average (FPA): This one offers only limited coverage, for specific incidents like stranding or sinking.
- General Average: This one is used to cover shared cargo loss that can occur when a ship needs to be saved.
Our EP Logistics’ team can help you evaluate which type of insurance suits your business needs best, as well as guide you with relevant topics like what are cross-docking and customs brokerage strategies and other logistics operations so you can always make informed choices.
Case Studies: Real-World Freight Insurance on International Freight Risks examples
Let’s see how international logistics vulnerabilities are covered in real life by different types of insurance:
- If a shipment is delayed because there is a strike at a port, an All-Risk policy would cover this delay, making sure there is no financial loss for the business.
- A shipment that gets damaged by flooding during ocean transit due to a strong storm, would be covered by insurance under the environmental clause.
With over 20 years of experience in international trade logistics, we work with you to guide you through risk management and insurance choices so you and your goods stay protected despite any challenge or disaster in transportation.
Steps to Choose Adequate Insurance
Choosing the right insurance to protect your shipments and your profits against global shipping hazards is key to keeping your supply chain efficient.
Here are some initial steps that can help you make the best choice that adapts to your specific shipment needs:
- Evaluate, audit, and perform a risk assessment to identify threats.
- Compare different policies and options from different providers.
- Research on insurance for different types of freight.
- Find out the difference in coverage for dedicated vs shared warehousing usage.
- Partner with a proven, experienced logistics company like EP Logistics for guidance and recommendations.
Protect Your Freight with EP Logistics
After exploring all these international freight risk examples, know that at EP Logistics, we prioritize and oversee the smooth running of your supply chain at all times.
We are familiar with different types of insurance as well as with the many challenges in international trade, which is why our customs brokerage is formed by experts who can help you oversee the smooth moving of your goods across borders.
Contact us at EP Logistics today to learn more about how we can protect your freight and streamline your supply chain.
