“Rakesh Singh is having a chemical manufacturing business in Delhi for the last 5 years. His business is doing great, but currently, he has been supplying chemicals to the local schools and colleges for science labs owing to the risk of transportation of chemicals from one place to another.
Nevertheless, he now decided to expand his business and started looking for new customers in other parts of the country as well. He got in touch with a dealer in Ahmedabad who needed someone who can supply various chemicals in bulk to him so that they can be further re-supplied to various schools and colleges in the Ahmedabad and adjoining areas. The dealer, satisfied by the quality and quotes of the chemicals offered by Rakesh, instantly placed a bulk order with him.
Rakesh is delighted due to finalization of his first interstate deal but as well as skeptical about how to transport the chemicals safely to Ahmedabad.
What are the risks Rakesh should be worried about with the transportation of chemicals by road?”
The Transit Risks
- Traffic Accidents: Road accidents can occur anytime and anywhere due to which the goods in transit can be damaged. In India, every year thousands of accidents are caused due to the negligence of the driver, roads conditions, severe weather condition, faults of a passerby, etc. that causes significant irreparable damages to the goods in transit.
- The Risk of Theft: There is always a risk of theft during transit of goods from one place to another. Especially, in the case of long distance transportation, the products move through so many places where the goods can be stolen resulting into loss of the sender.
- Environmental Risks: Any natural disaster or extreme weather conditions may occur while transportation of goods from one place to another which may cause damage to the goods in transit.
- Geopolitical Risks: In India, geopolitical risks are quite prevalent. They can arise due to political instability, trade restrictions, terrorism, corruption, piracy, etc. such conditions may cause damage to the goods in transit or inevitable delays in delivering the goods in time.
- Infrastructural Risks: These risks arise due to poor conditions of the trucks carrying the goods as well as that of the roads. The road conditions in India are so bad at some places that can cause damages and pilferages in goods in transit. The poor state of the trucks carrying the good also poses a threat to the safety of goods in transit. Also, in some cases, the trucks are overloaded beyond their capacity which also increases the chances of accidents and damage to the goods.
- Financial Risks: Rakesh should also give a thought to how the loss of any part of the cargo affects his business. He is unlikely to get paid for any material which does not reach the buyer or reaches in damaged condition. What should be his remedial steps to save his business from such a possibility.
How can Rakesh Safeguard His Business Interest from Such Risks?
- Choosing a competent transportation carrier: While deciding on the transportation service provider, instead of hiring someone who provides the cheapest services, go for a service provider who has certain policies in place for the safety of goods in transit:
- There should be a system in place for hiring and training of the drivers so that no damages are caused due to the negligence of the drivers.
- There should be a policy on the maximum weight that can be loaded and transported at a time so that there is no overloading of trucks.
- All vehicles are insured and tracked for movement
- Proper packaging of goods: It is your responsibility to make sure that all the goods are properly packed and placed in the safe containers so that no damages or pilferages are caused in goods during transit. In the case of high-value goods, make sure the goods are placed in locks in the trucks so that they cannot be stolen in transit.
- Fulfilling the state laws requirements: Make sure to educate yourself about various state tax laws and rules that need to fulfilled for the smooth transit of goods from one state to another.
Transit Insurance
While, the steps to ensure safe transportation are necessary, unforeseen incidents cannot be entirely ruled out. Thus, as a final nail, transit insurance can be bought, which will share the burden of the loss if your cargo is caught up in a mess on the way, despite all your efforts.
The transit insurance provides coverage for the risks involved in the transportation of goods by road or through river ways from one place to another. It provides coverage for loss, damage, and theft of goods when they are being transported.
Buying transit insurance (part of Marine Cargo Insurance) has now become easy as browsing the internet for fun. It just takes a few clicks, some information sharing about the cargo and the journey, compare the quotes, choose one and you are done. All this has been made possible by the presence of online insurance advisors like SecurNow, who can offer multiple quotes so that you can compare and choose the best for your business.