COVID-19: Proactive communications can mitigate disruption of freight forwarding

The ongoing COVID-19 disruption to freight transport services and global supply chains is significant and will continue to evolve on a daily basis.

The ongoing COVID-19 disruption to freight transport services and global supply chains is significant and will continue to evolve on a daily basis.  Lee Kok Leong, executive editor, Maritime Fairtrade, reports

TT Club, international insurance provider, advises that good, accurate communications can mitigate the exposure to liabilities. In addition to the heightening challenges transport operators are facing in moving their customers’ goods to and from China, there are other potential unforeseen exposures that may also accrue.

Restrictions due to labor shortages at ports and cancellations of inland transport links within China, constraints in the supply of goods due to factory closures and reduced schedules of air, ocean and rail carriers may expose forwarders to claims arising from delivery delays and cargo deterioration.

However, freight forwarders, logistics service providers and other intermediaries can protect themselves legally and minimize their liabilities, while still giving a quality service to their customers.  One way is for transport operators to be proactive in their communication.  In such disruptive situations as the one COVID-19 has precipitated, both the value of the operator’s service to his customer and his protection against future liability claims lies in good, accurate communication.

“Up-to-date status reports on their cargo’s progress, or lack of it, are vital to shippers,” says TT Club’s Risk Management Director, Peregrine Storrs-Fox.  “Forwarders and logistics operators will certainly prove their mettle if they can consistently make customers aware of the ongoing attempts to problem-solve.  Careful recording of communication trails detailing such actions will also help in any disputes in the future.”

In attempting to deliver such solutions, however, a forwarder may need to use routes, carriers or modes that are less familiar, or to partner with other actors, of whom he has no experience.  Such ‘workarounds’ are common at times of crisis when pressure from customers to deliver freight by whatever means can be intense.  

Additional care and due diligence must be taken when working in unfamiliar environments.  It might be necessary to take extra precautions in employing bills of lading, standard trading conditions (STC), letters of indemnity (LOIs) and other means in order to protect the stakeholders from unforeseen costs and liabilities.

For example, if force majeure notices are required to be sent, it must be ensured that these are fully understood by the recipient. In other cases, when delays or deviations are caused by matters genuinely outside the operator’s control, then these circumstances must be well documented.

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