What is Risk Management?

Understand its importance in Cargo Transport.

Cargo transport in general is a branch where a high level of risk has always been observed for carriers, freight forwarders, and many others involved in operations, but data released by the National Association of Cargo Transport and Logistics, since 2021 it has been possible identify an increase in the number of adverse situations.

Accidents caused by roads in poor condition, professionals working under fatigue and stress, equipment with malfunctions, vehicles in poor mechanical condition, fines, apprehensions, and especially cargo theft, which leads the ranking of risks involved in the transport of products and goods put people's lives at risk on a daily basis and can even cause astronomical losses.

From its origin to being delivered to its final destination, any cargo goes through numerous challenges, even running a huge risk of getting lost, for example.

In this way, to avoid major losses and other headaches, it is practically essential to have a good risk analysis and management service, thus enabling insurers to pass on highly relevant information in a practical and agile way to those involved in the operation, so that these carry out preventive actions that can protect each load and consequently the customer's billing.

But after all, how does risk management work in the area of ​​cargo transport?

There are basically four phases to be taken into account in order to carry out risk management, namely: the detailed assessment of the project, the detailed analysis of the potential risks, then the transfer of detailed information on how the transport operation should be carried out correctly carried out, and finally, practical actions are carried out to implement the defined action plan.

PROJECT EVALUATION

Initially, with the information provided by the insurance carrier, it will carry out a detailed study of the logistics operation as a whole, for example: which vehicles are used and in what state of conservation they are, if they have their maintenance up to date, if they are suitable for the type of load, verification of more specific details of the merchandise, which are the best routes and hired professionals, expected delivery time, and perhaps other relevant information may also be requested.

ASSESSMENT OF POTENTIAL RISKS

In possession of all the necessary information, the risk potential of the client will be assessed by the insurer, considering all the points addressed and creating a protocol to be complied with, containing specific rules and instructions, such as suggesting the need to use a register with background checks on the professionals involved, or even hiring an armed escort.

GUIDELINES AND TRAINING

After identifying all possible risks, the insurer will provide guidance on how the transport should take place, whether for the use of technologies for blocking transport vehicles, monitoring through cargo monitoring centers, in this case with great emphasis on the real-time tracking via satellite system, GPRS, or radio.

PRACTICAL IMPLEMENTATION ACTIONS

In the last stage, the insurer will determine some practical actions that must be implemented by its policyholders and also by all contractors involved in each stage of the operation, such as requirements related to travel hours, points for making rest stops and several others.

Offering so many advantages in the face of such a complex scenario, risk management has become an essential tool for companies that seek to excel in the cargo transportation segment, always ensuring that deliveries to the end customer occur on time, protecting their earnings from large unexpected losses that could have been avoided.

Without any shadow of a doubt, risk management favors decision-making, greatly reducing or even eliminating the possibility of theft, accidents, equipment failures and countless other issues.

By hiring a good Cargo Agent, your business will be under the eyes of professionals who are experts in what they do and who will certainly recommend, when necessary, the implementation of a risk management project to their customers.

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