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Haulage and Logistics supply chain risks

As a business operating within this essential sector, in order to continue to meet the needs of your customers within the UK, understanding your risk profile will ensure you are prepared should the unexpected strike.

Inbound logistics

The risks involved with the movement of raw materials, finished goods, and supplies from a manufacturer or other distribution channel to a fulfilment centre, warehouse, or retail store, are vast. Potential problem areas can include:

  • Driver availability and retention.
  • Fleet management (fleet, driver, fuel management).
  • Technology dependency/failure.
  • Major incident – delay/interruption.
  • Quality assurance/product stewardship.
  • Stock loss/damage.
  • Third party supply transparency.
  • Contractual risks - who’s liable to take the finance burden.

Many companies are starting to synchronise their outbound and inbound logistics with automatic ordering and order-fulfilment systems. The rationale being; the better the inbound logistics are managed, the more efficient the process usually is. The better the risks are understood, the more prepared you are to keep the wheels in motion should your business be interrupted by the unforeseen.

Warehouse management

With the control of the day-to-day operations associated with warehousing; inventory, equipment maintenance, stock management, shipping and tracking for example, comes a variety of risk exposures including:

  • Increasing use of technology in warehouses and the associated cyber security implications.
  • Temperature and quality control risk.
  • Employee health and safety.
  • Stock loss/damage.
  • Fire, flood, theft, infestation.
  • Denial of access.
  • Accumulation risk.

Solid warehouse management helps form the foundation of every successful operation, and is more important than ever. Getting it right is no simple task however. But knowing the risks and ensuring that you’re effectively protected, can help set you on the right track for success.

Distribution

By the very nature of the logistics industry, there are ever present and inherent risks associated with distribution itself. These can include:

  • Distribution strategy (global/national/local).
  • Government regulation restricting market entry – see our recent article on Brexit for Hauliers.
  • Delay interruption – natural catastrophe, strike, terrorism.
  • Employee health and safety.
  • Driver attraction and retention.
  • Technology dependency/failure.

The effective management of distribution channels can help firms to grow their market and sales, and built strong relations with their clients. With so many moving parts however, it’s easy for certain elements of the supply chain to take a back seat. Having the appropriate cover in place to mitigate this is essential.

Transport planning and control

A pivotal element in a logistics chain, planning and control has an overarching impact on the overall performance of production procedures, right through from manufacturing to distribution. Risks here include:

  • Technology dependency/failure.
  • Contingency risk.
  • Delay in receiving goods.
  • Climate change/weather risk.
  • Environmental concerns.
  • Fleet optimisation/effective claims management.
  • Growing vehicle complexity/increased repair costs.

Every organisation already has a transport plan of some description. But much like the insurance policies you have in place to mitigate the above risks, a robust review by relevant experts should be frequently applied to refresh the plan and keep it up to date with current operating conditions, technological advances and techniques.

Reverse logistics

When moving goods in the supply chain from their end destination backwards, those dedicated to managing reverse logistics should understand the possible risks involved:

  • Fleet utilisation.
  • Delay in receiving goods.
  • Driver/people risks.
  • Supply interruption.
  • Changes in consumer preferences.

Without clear owners at each step of the process understanding the risks involved, confusion follows and mistakes can happen. This can affect shipment security, timelines or customer dissatisfaction.

Keeping the wheels in motion

The worst time to discover that you are either not insured or your insurance is inadequate is when you need to claim. If you are concerned about any of the risks mentioned in this article and the potential gaps in your risk profile / associated insurance cover, our experts are here to listen.

Connect with your nearest transport and logistics expert or read our credentials to learn more about us.

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