Article posted by Gov.UK Admin, for Gov.UK
16 December 2010

Freight forwarding – managing risk

Freight forwarders have within their care – or control – goods and documents owned by third parties that often represent large sums of money. This means good risk management is the key to running a successful forwarding business.

Freight forwarders can limit their liability and cover some of the risks with insurance policies. However, it can be easy to invalidate the benefits of limited liability through carelessness or ignorance. Also, some risks are uninsurable – such as losses caused by terrorism.

Risks can never be eliminated completely, but with good practices and training, they can be minimised to acceptable levels. This reduces the likelihood of unwanted claims that could severely reduce profits.

It is important that forwarders bring their trading conditions to the attention of the customer before the contract is concluded. Failure to do so could prejudice insurance cover and invalidate the protections of limited liability. For more information, see the page in this guide on trading conditions and limiting liability for freight forwarders.

Other areas of the business where a forwarder needs to establish clear procedures – which are understood by any staff involved – include:

  • getting written instructions from customers
  • controls over the issue and release of documents
  • managing subcontractors – ideally involving written contracts
  • handling dangerous goods – for more information, see our guide on freight forwarding – moving goods
  • cargo security
  • insurance claims

Subjects covered in this guide

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Article posted by Gov.UK Admin, for Gov.UK
16 December 2010