Supply Chain Risk Management
Protecting Your Capital in International Trade
In international trade and domestic transportation, the success of a transaction does not only depend on finding a buyer or supplier; it also depends on the safe arrival of the goods at their final destination. When your cargo enters the roads, oceans or air routes, your business’s capital and liquidity are at their most challenging.
Did you know that under international transport legal regulations, logistics companies and carriers are only liable for a very small portion of the actual value of the goods in the event of sudden incidents? This means that in the event of damage, without a proper risk management structure in place, the bulk of the financial loss will fall directly on your trading company.
Why is freight and transportation risk assessment vital for traders?
Every commercial shipment, from the moment it leaves the warehouse of origin to its delivery at the destination, faces a chain of unforeseen risks, the neglect of which can lead to bankruptcy or serious legal claims:
Cargo Damage/Loss:
Road accidents, fires on board ships, storms or even temperature fluctuations in refrigerated containers can reduce the value of a shipment worth several hundred thousand dollars to zero in a matter of seconds.
Transit Liability Risks:
If you operate as a logistics company or commercial intermediary, the lack of proportionality between your legal responsibilities and protective coverage can leave you completely defenseless against damage to other people’s expensive cargo.
Mistakes in Incoterms:
The transfer of risk of goods in international contracts (such as FOB, CIF or CFR) has a very narrow boundary. A small mistake in understanding the point of risk transfer can make you liable for a loss you thought was the other party’s responsibility.
The Phoenix Approach:
Identifying Financial Holes Before a Crisis Occurs
Many merchants realize the importance of comprehensive insurance coverage when the goods are damaged, and there is no way to compensate them.
At Phoenix, we analyze your supply chain and commercial contracts as your strategic business advisor to ensure that your assets are properly protected.
