Risk Management in Shipping: Balancing Costs and Safety in Operations

Every business is associated with certain risks and dangers, and so is the shipping industry. Shipping containers are an indispensable part of the shipping industry. They are exposed to salty waters and must survive harsh and changing weather conditions. However, many situations do not have preventive solutions. To cope with those situations, we need strategies for risk management in shipping. What if this risk management in shipping costs more than the investment? This makes balancing the cost and safety in risk management operations essential. 

This article will provide you with comprehensive ways through which you can implement efficient, cost-efficient risk management in shipping operations. We will also have a brief overview of the potential risks associated with the shipping industry. 

What are the potential risks of shipping? 

There are many potential threats to the shipping industry, which can affect its efficiency and costs. To overcome these risks, we need risk management in shipping. Let's have a look at the potential risks in shipping: 

1. Cargo damage: Cargo damage is the most common and foremost risk in shipping. At the destination port, the cargo belongs to the buyer. Cargo damage causes a huge loss to the business and a loss of reputation. 
2. Capsizing: Capsizing is the instability and dysfunction caused by improper weight distribution during loading and unloading. This can also result in a huge loss of containers and cargo. 
3. Inefficient operations: Inefficiency in any shipping operations, be it container handling, cargo handling, or loading or unloading, can result in increased costs and supply chain disruption or delivery delays. 
4. Shipment delays: Shipment delays, for any of the potential reasons, are the most embarrassing risks associated with shipping. They affect a company's reputation and decrease the number of customers for its services. 
5. Listing: A ship list means tilting the ship on one side, be it port, the left side, or the starboard, the right side. The main causes are the asymmetric construction of the shipping, uneven loading, and shifting of the weights on the ships. 

These are the main potential risks in shipping. However, they are mentioned, but that doesn't mean they are the only risks. Depending on the situation and cargo, thefts, accidents, injury to any worker, technical dysfunction, or natural calamities are potential threats. 

Strategies for risk management in shipping 

There are specific problems that can be resolved easily with the strategies for risk management in shipping. You need to adopt strategies for shipping container security and cargo protection strategies to initiate an efficient supply chain. Let's explore the strategies to avoid the risks in shipping: 

1. Cargo insurance: You can prevent cargo damage by holding cargo insurance. This is the most common strategy for risk management in shipping. You can take cargo insurance with lower premiums to manage the cost and balance it with safety operations. 
2. Training and educating stakeholders and workers involved: This is a strategic method for preventing potential risks. Training the workforce and stakeholders on dealing with risks can benefit workers who experience unexpected accidents or health issues. 
3. Trace your shipment: Tracking a shipment can be a cost-efficient risk strategy. The best option is to use smart containers with GPS inside them. 
4. Proper stacking and stowage planning: Proper stowage and stacking panning can be a good management strategy to prevent listing and capsizing problems. It just requires your time and a dedicated planning team. This is cost-efficient; proper implementation can decrease costs by optimizing the space inside the ship. 
5. Use of technological advancements: You can minimize the effects of these potential risks by using technological advancements such as automated guided vehicles, GPS tracking systems, and machines for loading and unloading. They will reduce the chances of human error and, therefore, risk chances too. It can be expensive for some companies, but you can implement that to some of the essential aspects of shipping that are more threatening to accidents. 
6. Label your cargo: To ensure the maritime safety of high-value, hazardous, or sensitive cargo, label it with its names and preventive measures. This will help the person handling the cargo recognize which box belongs to which cargo and how they must handle it. 
7. Pack it properly: Properly package cargo to prevent damage during logistics operations or transit. If susceptible, double-pack the cargo with boxes, bags, or cardboard. 
8. Regular inspection and maintenance: Regular container inspection is essential for its durability and structural strength. This is a cost-effective method, it just requires your attention and time. Inspection before transit can free your journey from potential risks and ensure cargo safety. 
9. Customs clearance: All the customs and regulations are made for your own benefit, whether the IMDG code, ISO standards, or the MARPOL regulations. Be careful when adhering to these regulations and getting all your documents right to protect your shipment from potential risks.
10. Identify hazards: The most important strategy you can implement in your risk management is recognizing the hazards affecting your supply chain management. If you are unaware of shipping risks, you can't find solutions accordingly. 

With evolving times and technology, the shipping industry’s contribution to international trade has increased. Undoubtedly, there are some perils in shipping. Comprehensive risk management strategies can minimize the effects of these perils. You can change your budget and ensure the safety of your operations by analyzing the cost factor and keeping safety in mind. As a concerned authority, you must take care of these accidents and implement risk management strategies for the shipment before it takes off for transit. 

LOTUS Containers, with its container leasing and selling, provides services for maintaining shipping containers. With our optimized and consistent services, your containers will always be ready for shipment.