The transportation industry is prone to risks of every demeanour. The professionals of the freight transportation services industry must be informed and prepared of the unknown vulnerabilities. Such risk factors pose an immense potential risk in the process of business. The factors can be named as driver shortages, disputes in international trading, theft of cargo etc.
The factors are discussed in detail below:
- Disputes in International trading: Every country respects their trading regulations in accordance with the business firm they are dealing with. In many instances, regulations are not respected mutually which gives rise to disputes in the trading process. The exports coming out from one place might not reach the desired destination if there are disagreements between business parties. This leads to major losses in fiscal, monetary and resource aspects involved in the freight transportation service process.
- Driver Shortages: In cases of excessive demand and supply, there are many instances when the shipper falls short of carrier services. It becomes very challenging for the shipping party to arrange an immediate fleet of trucks for timely delivery of products. If there is driver shortage, the stocks and inventories are prone to long periods of stagnancy in the warehouse and storage facilities. To cover up the losses the shipping agencies usually contact freight brokerage and freight forwarding services. Such freight transportation agencies have an enormous database of carriers because they are in frequent contact with the trucking companies. The freight agents are efficiently capable of arranging carriers and fleets of trucks in consonance with the immediate demands of the shippers.
- Cargo Theft: There are many cases of cargo robbery from the warehouses and storage facilities. The robbers are usually prepared in advance because they have outlined mechanisms of breaking INS and hacking of companies databases. Last year, there were instances of robberies from the trailers of the trucks at the truck stops. The hijacking or piracy of cargo can even take place from the warehouses and storage facilities. Such facilities should be well equipped with the cameras and security services.
- Cyber Attacks: Cyber-attacks are one of the prominent threats encountered by the shipping and freight transportation companies. Such instances usually occur due to advancements in technology. The hackers can easily break in online automations of supply chain management businesses. To breach such acts, it is very necessary that the victim companies resort to an integrative approach by implying end to end encryption on their online processing of business operations.
- Depleting Infrastructure: The national highways are very dangerous for the commercial vehicles because the highways are prone to immense crime rates. The infrastructural contingencies also vary from delays, signage issues and lapse of business undertakings on unknown grounds maybe due to miscommunication among the parties. The traffic congestion is also responsible for a huge loss of fuel resources which accounted for $4 billion nationally as recorded last year. The delays in delivery of goods can result in termination of contracts. The depletion of perishable goods also poses an immense risk in the lapse of infrastructure of the industry.
- Government Interference: The legislative parties are meant to support the industry but on the contrary they pose a great threat. The policies deteriorate the on-going process of business operations. The trucks these days are meant to be installed with the tracking devices which makes it very difficult for the driver to map out his own schedule. The driver is stuck in bondages of unnecessary rules and regulations. The regulations in fact fatigue the driver more because he has to combat the problem of limiting hours. This makes it very difficult for the companies to arrange timely and ordered deliveries.
- Piracy: High value items like electronics, pharmaceuticals and clothing are prone to thefts at a massive scale. The organized robbers gather presupposed information and they constantly monitor the shipping activities. The thieves are trained enough to break into the warehouses and vanish the entire inventory to fuel the rise of black market. The organized criminals are also capable of diminishing the confidential insider information of the company in the foreground.
The Prominent Risks of International Shipping:
- Loss and Damage of Cargo.
- Unexpected Storage Costs.
- Disruption in Supply Chain Management.
- Personal Injuries.
- Increased Insurance Premiums.
- Increased Prices of Goods from consumers.
The Prominent Risk Management Strategies are:
- Exercise diligence with the carriers.
- Consonance with Documentation and Paperwork.
- Clearance and Transparency in contracts.
- Effective Communication.
- Hiring of Trained and expertise personnel.
- Implementation of tight security measures.
- Input of technological advancements.
The factors discussed in the article cover entire information of the possible risks which are encountered these days by the transportation industry. The outlined factors must be glanced, implemented and abided in the freight transportation business process to eliminate all the possibilities of eventual risks and misdemeanours.