Freight Risk Management—7 Common Freight Risks and How to Overcome Them

While shipping freight may seem like a straightforward process, there are several challenges that can arise between point A and point B. These challenges are called freight risks, and they can lead to costly delays, damaged goods, and unsatisfied customers.

Fortunately, many freight risks can be mitigated by practicing freight risk management. This involves identifying potential challenges before they arise and implementing measures to overcome them if they do occur. 

By taking a proactive approach to handling freight risks, shippers can ensure their deliveries arrive at their destinations safely and on time. 

Identifying Shipping Challenges and How to Manage Them Effectively

From the time you receive an order to the moment it gets delivered, your shipping operations can encounter a variety of freight risks. These risks not only pose a threat to your bottom line, but they can also damage your company’s reputation and lead to long-term operational inefficiencies.

Some of the most common freight risks that shippers face include: 

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• Damaged goods
• Theft
• Misplaced shipments
• Traffic accidents
• Major delays
• Illegal practices
• Inclement weather

Let’s take a look at these common freight risks in detail to determine how shippers can prevent them through effective freight risk management.

Damaged Goods

During transit, your goods can get damaged due to poor packaging and improper loading techniques. They can also get damaged off the road by being exposed to unsafe storage conditions or mishandled by warehousing staff.

How to Prevent Damaged Goods 

Shippers can prevent damage to their shipments by practicing proper storage, packaging, and handling techniques. This involves storing your goods in the appropriate climate, using durable packaging materials, and handling all shipments with care.

Read our related article to discover the differences between freight carriers and freight forwarders. 

Theft

Most thefts occur when shipments stop at warehouses, truck stops, and during the loading and unloading process. In some cases, your goods can be stolen during transit through hijacking or coerced stops.

How to Prevent Theft

Many thefts can be prevented by implementing a variety of security measures. This involves using security equipment like GPS tracking, locks, and surveillance cameras. In addition to utilizing security equipment, all staff should be trained to recognize suspicious activities and practice secure handling techniques.

Misplaced Shipments

Shipments can get misplaced due to inefficient storage practices, a lack of inventory management, or misrouted deliveries. Most of the time, misplaced shipments are due to human error involving a lack of communication or poor record keeping.

How to Prevent Misplaced Shipments

Fortunately, there are several technologies that can improve shipment tracking and inventory management. While at the warehouse, shippers can utilize barcode scanners, QR codes, and warehouse management systems (WMS). During transit, shippers can monitor their deliveries and optimize their routes with GPS tracking and transportation management systems (TMS).

Read our related article to learn how to utilize a transportation management system (TMS).

Traffic Accidents

Whether your delivery vehicle is held up by an accident or they were involved in an accident themselves, traffic accidents can pose a significant risk to your shipping operations. This is especially true during long delivery hauls, as drivers spend more time on the road and are exposed to a greater number of road hazards.

How to Prevent Traffic Accidents

To prevent your delivery drivers from getting in traffic accidents, shippers should ensure that their vehicles are maintained properly and their drivers are well-qualified. They can also avoid traffic delays by optimizing delivery routes and keeping an eye on evolving traffic conditions.

Major Delays

Shipping delays can stem from a variety of sources. Whether it’s due to congested routes, lack of staff, or issues further up the supply chain, shipping delays can lead to missed deadlines and unsatisfied customers.

Preventing Major Delays

Shippers can avoid delays by including buffers in delivery times, optimizing delivery routes, and diversifying their shipping methods. If you encounter shipping delays, it’s important to keep your clients up to speed on the status of their delivery.

‍Read our related guide to learn how to improve on time delivery in manufacturing.

Illegal Practices

Illegal practices can include any unethical actions involving the representation or transportation of your shipments. This can involve falsifying documents, violating government regulations, or engaging in fraudulent actions. 

How to Prevent Illegal Practices

Shippers should have an extensive understanding of the rules and regulations that they should follow. This will allow them to establish ethical practices and implement them at every level of their organization. Failure to comply with shipping laws can lead to expensive fines, loss of goods, and a damaged brand reputation.

Read our related article to discover how to determine LTL freight class.

Inclement Weather

Hazardous weather conditions can pose a threat to your drivers’ safety and lead to long delays or damaged goods. Some weather conditions, like isolated thunderstorms or snow, may only lead to minor setbacks. Severe storms, like tornados and hurricanes, can create long-term disruptions in the supply chain.

How to Prevent Inclement Weather

If a delivery route is expected to be affected by inclement weather and hazardous road conditions, it’s usually best to choose an alternate route. Although alternate routes may take longer, opting for less hazardous conditions will ensure the safety of your drivers and shipments. 

Once again, if you encounter any delivery delays, it’s important to communicate them with your customers. 

Read our related guide to learn how to manage small business supply chain and logistics.

Overcome Freight Risks With Open Road    

Although many shipping challenges can be mitigated with freight risk management, it’s impossible to avoid them altogether. Despite your best efforts, some freight risks occur unexpectedly and without warning. 

When you experience unexpected disruptions in your shipping operations, turn to Open Road. We have the technology, vehicles, and experienced manpower needed to effectively overcome freight risks and keep your deliveries running smoothly.

Sign up for free on our app to experience the Open Road difference.