Shipping cargo is unavoidable for any business with overseas exports. Anything can happen between packaging the shipment and unpacking it at your chosen destination. The shipment can get lost. A fire can occur. A plane can have unforeseen delays and not make the destination ontime. Any number of issues can occur that can prevent your shipment from getting to your customer on time or even at all.
As a result, your business can suffer, causing you to shut down and lose valuable income. Of course, there are several ways in which you can protect your shipment. Selecting the right container for your shipment is one way to help protect the contents inside your package. Another way to protect your business is to employ an international trade finance company, such as Tradewind, to help your company during the financial strain of a lost or late shipment.
Determining the Risks
The first piece to protecting your cargo and choosing the right storage for your shipment is assessing the risks involved with transportation. Different items have different risks, much like different types of retail locations pose different risks. You would not protect a jewelry store in the same manner that you would protect a grocery store. For one, the value of the items is very different. Another difference is the likelihood of theft, creating a higher loss for the business.
If you would not protect these two types of retail establishment merchandise in the same manner, why would you protect a shipment of their goods in the same manner? Therefore, in order to properly choose the containers for your cargo shipments, you must determine your risk. Two things are important to know:
- What would happen if theft, fire, water damage, or any other issue occurs
- The cost that type of damage would do to your business
Items that are at risk for theft, for instance, would need an extremely secure container to offer protection when shipping. Not only should the cargo container be heavy and difficult to open, but you may also want to consider bolting the container to the floor of the shipping vessel. For items that call for extra security, a shipping vessel that contains safes to place cargo would also be a wise option.
Items that could be damaged by water or fire require fireproof and waterproof containers. These containers will help protect the items inside if the shipment or shipping vessel encounters any problem. While it will not prevent the items from being lost at sea or in the middle of a forest where a plane went down, it will protect the items to give you time to find the container and retrieve your items.
Mitigating Your Losses
No matter what storage option you choose for your cargo, things can happen. Even the most prepared person in the world cannot protect from a random natural disaster or a determined thief. You need to be prepared to mitigate your losses if they occur. Securing the most appropriate storage for your cargo is the first step to mitigate risk. However, when the loss occurs even with the best possible practices in place, your business can suffer unless you are prepared to contain the damage and take advantage of the funding solutions available that will keep your revenue on track.
One such way to help you mitigate financial loss is to work with supply chain finance companies. These companies use factoring to help you maintain your revenues while you are waiting for a replacement of your lost or stolen cargo. The process is quite simple. Typically, when you are shipping cargo, the goal is to sell these products to an end-user. The end-user may not make a payment until the shipment arrives safely. Yet you need the money to re-order the cargo that has been lost. A supply chain finance company will buy that unpaid invoice of your end-client, giving you the upfront income to reorder the cargo and reship what was lost, stolen, or destroyed.
The benefit to this type of financing is that you will not go out of business or have to back out of your contract with your buyer because of circumstances beyond your control. Of course, you worked hard to secure your shipment; however, if the vessel was lost at sea or hijacked, there is little you can do to recover the securely-stored cargo.
Shipping cargo is always a risky endeavor. Even though you can take all the precautions available to help reduce the risk of loss, like choosing the proper storage for your container, things can still happen that are beyond your control. To help mitigate the blow of a shipment gone awry, it is best to consider factoring offered by reputable trade finance companies, such as Tradewind, to help keep your business operating when a loss occurs.