The Top 3 Risks of Cargo Shipping (and How to Avoid Them)

Posted by Benjamin Meskin on Jan 6, 2022 2:20:00 PM
Benjamin Meskin

Let’s forget about COVID for a moment - we could all use a break from COVID talk in the shipping industry. Let’s talk about cargo shipping for a moment. When we talk about freight shipping, almost anything can happen! Human error accounts for 75% of marine liability losses. It’s not surprising that most of these accidents could have been avoided by contingency planning and proper training.

Ocean shipping is still one of the most cost-effective methods of international shipping. If you have large bulk orders from international suppliers or customers, sea shipping is the route forward. But, we can confess that marine shipment is not always blessed with shipping practicality. In the eyes of mother nature, at least!

Weather, technical failure, and human error all come to mind! If you don’t prepare for these potential accidents, you’re preparing for disaster when it eventually strikes. In a nutshell, you want to plan, get great marine insurance, and have a brilliant freight broker who isn’t a joker when combating the many risks of ocean shipping.

We’ve all dealt with everything from supply chain delays to ‘acts of God’, which are ‘an act of nature that couldn’t have been foreseen or avoided.’ An example of this could be a freak storm that sinks ships and delays access to a port for days on end. As we know, these things can have a ‘butterfly’ or ‘knock-on’ effect that can ruin cargo shipping for days on end.

Let’s talk about the top 5 risks of cargo shipping (and how to avoid them).

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Natural Disasters

Sea shipping is crucial for the world economy. Most people forget that cargo shipping is important to manufacturers, retailers, and consumers. Natural disasters impact the supply chain and your own cost of moving freight.

Natural disasters can impact freight shipping operations in a variety of ways:

Rates

You know the drill. When natural disaster strikes, shipment channels get affected, costs will increase, and tighter capacity will stress your network in more ways than one. How do we fix this?

Given that we’re dealing with ‘acts of God’, all we can do is our best to prevent and mitigate for when disaster strikes. In this case, shipping and insurance integrations are a surefire way to ship, insure, track, and file claims all in one place. It’s good to make shipping easier and more streamlined.

There are different ways to deal with unexpected increases in freight rates. For starters, consider accounting for contingencies. You can do so by accruing for these contingencies within the annual freight budget and shopping around. It’s a good idea to work with a broker with adequate options and flexibility. It’s crucial to have access to additional carriers who can step in when the regular carriers are facing issues.

We can think of brokers who certainly fit the bill. One of them (probably the best one) rhymes with ‘umbrella.’ Interesting. We’ll have to revisit that one later.

Capacity

There are lots of creative ways to deal with capacity issues. Let’s delve into our solutions for getting this right. It’s a good idea to have a variety of transportation and logistical options available. If disaster strikes, it’s a good idea to have backup carriers available that are in different geographical locations (or that utilize alternative shipping lanes).

Work with your existing carrier to have a contingency plan that explicitly maps out alternate routes. On top of this, you can reduce issues by building slack into the supply chain. You can also leverage your freight spend by giving additional freight to carriers that will negotiate lower fuel surcharges.

Other tips include optimizing transportation modes (ex: shipping freight via multiple LTL loads instead of a full capacity load). Working with a freight broker is a reliable way to utilize tips like these and plan for the best and worst.

Any solid freight broker will know how to mitigate the effects of capacity issues, service interruptions, rising costs, and even those ‘acts of God.’ And we’re talking about disasters for our non-religious shipping audience!

Regardless of your religious affiliation, it’s a good idea to ship smarter. This perfectly proactive approach will massively mitigate losses while enabling you to become a shipping force of nature - unstoppable, undroppable, and 100% optimal.

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Human Error

As we noted earlier, human error is the most significant type of error, especially when it comes to cargo shipping. According to the study by Allianz, 75% to 96% of marine accidents involve human error. Interesting, isn’t it? If you think about it - the Titanic is the most famous example of this!

It can take many forms, from crew member miscommunication to failures in the organization. Safety culture is paramount, training is important, and having the technology to run everything smoothly is imperative.

While training on the new equipment is key, it’s also crucial for staff to learn how to use it alongside radar, bridge equipment, and everything else! There are excellent solutions such as simulation training which give crew and operations teams a chance to practice and roleplay for specific situations.

While safety culture and training are great, it’s also worth keeping in mind quality of life and working conditions. How many car accidents have been caused by tired drivers who have been on the road for too long? It’s the same concept. High turnover within the shipping industry exists because workers fear job security and are regularly fatigued due to being overworked.

It’s essential to encourage good working conditions, reasonable hours, competitive salaries and opportunities for career development (not to mention the human basics like solid training, exercise and rest.) This might seem like obvious advice, right? Considering that many industry workers feel overworked, it’s undoubtedly a sign that not all ocean shipping companies place as much emphasis on employee wellbeing as they should.

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Technology Issues

Well - they are boats, after all! Any boat owner will tell you how brilliant it is to own a boat and sail the seven seas, with the wind in their hair and hardly a care. Yes - all is well - until they have to pay for the upkeep. Boating bills add up, and that’s the same for everyone, from yacht owners to international cruise ships.

Let’s define marine cargo insurance for anyone who is wondering. In a nutshell, it is the insurance of property from point A to point B! Sea shipping insurance is for insuring your shipment goods while they’re in transit. Sea shipping insurance covers loss, damage, or catastrophic delays on the road (or, in this case, the water)!

With sea shipping, it’s (basically) a necessity to ensure that your shipments are fully insured. Far too much can go wrong. It’s the reality of weather, international waters, and boating technology.

Maritime perils can even be covered by insurance that covers wild disasters such as sinking ships, war, pirates, and more. Regardless, it’s our job to define which type of property is being shipped while ensuring the product is safely accounted for.

There are many issues to consider: from structural issues, to navigational tools, to engines, to long-term upkeep of slowly deteriorating machinery bells and whistles. To be fair, the list goes on, and you don’t want to face malfunctions such as oil leakages into the ocean.

That would be inconvenient in many ways. You’d be looking at everything from potential fines to the sleepless guilt associated with knowing that your oil spill has probably killed countless numbers of baby seals.

Thus - to avoid the guilt of dead baby seals and the headache of shipping delays we recommend getting a thorough marine insurance policy. This will massively help you to avoid significant financial losses.

Plus, getting an inspection of your ship's outer and inner structure is a solid way to ensure the long-term health of your sea freight. That way, everyone is accounted for: you, your employees, and your customers. Happy, safe, and fully insured.

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Sea Shipping Insurance You Can Count On

You might remember that earlier in this article, we mentioned a service that rhymes with “umbrella”. Well, we’re talking about Cabrella, and it turns out an ‘umbrella’ is a great analogy for our service and what we do. Instead of protecting you from the rain, we protect you from every other issue and eventuality that might mess up your sea shipping service.

Cabrella offers customized shipping insurance software that changes the game for the ocean shipping industry. Our software covers your shipping & insurance needs. It can also help out if you have the logistics covered but require custom & specialized insurance options for your valuable shipments of any kind.

Our software provides the ability to ship, insure, track, and more. We can even help you to file claims, manage risk, build customized reports and virtually every shipping industry desire. All of this from a user-friendly platform - because we believe a platform is useless without an easy-to-use UX!

Even if you aren't dealing with ocean freight, we are available to every type of shipping need. For instance, we also provide shipping, Insurance & Risk Intelligence software for luxury and high-value items. We get all sorts of industries who trust us to insure their musical instruments, jewelry, and anything else they require. You’d be surprised at the items we’ve shipped!

Manage Ocean Shipping Easily

It’s also worth mentioning that our API integration is available. This allows you to link your shipping insurance to link to your external system beautifully. This means that you can insure your shipments with any carrier. This allows for easy flexibility that may or may not change your shipping life in general. Some might call that a game-changer. We just call it another day at Cabrella, where our clients use our metaphorical shipping umbrella.

On top of all this, you can use our risk intelligence and proactive tracking. Sounds interesting right? This is when you use Cabrella to access crucial risk intelligence which is based on losses by particular buyers, carriers & services. We can even go as granular as analyzing by city, state and country.

Regardless, all of our packages are fully tracked. This means that you will be fully aware of everything that is happening throughout the transit process while being alerted about tracking exceptions in real-time. This is a great feature that allows you to be one step ahead of issues before they escalate.

Don’t forget that Cabrella offers the ability to file insurance claims listed in the Cabrella database. You can fill claims via API for quick and lightning-speed filing. Users, partners, and sea captains can use the API to claim up-to-date status responses.

Additionally, users can send transaction information via API for rating and logging transactions. We have an easy-to-use interface to view all transactions anytime for review and management.

All in all, Cabrella can be your go-to umbrella for everything related to sea shipping insurance and beyond. We integrate with a massive range of partners and use a shipping API that will make your shipping concerns forgotten. Who doesn’t want a smooth, streamlined interface that was built for transportation management systems?

  • Cabrella offers a vast range of marine cargo and freight insurance options from every type of customer in the sea shipping industry. Everyone from regional companies to multinational conglomerates are perfect candidates for our software solutions.

  • Never hesitate to work with our risk consultants to receive comprehensive risk management solutions that will be 100% tailored to your company and goals. Our marine cargo insurance products cover sea, land, air, and storage.

  • We are always transparent, so you won’t need to worry about surprises. We have you covered for everything: from ‘Acts of God’ to even terrorism! It’s about making our customers feel comfortable knowing that we have cross-border capabilities with local policy issuance designed to comply with international legislative and tax requirements of any type.

Our service is to make shipping easy.

Our online service is fast, seamless, and straightforward. You’ll get a quote in minutes. We developed our products to decrease your shipping and insurance costs while increasing productivity. This equates to total peace of mind knowing that you are covered!

If you want to revolutionize your shipments and never worry again - contact us at Cabrella.

Tags: #internationalshipping, Shipping Insurance

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