Once your product has left your location, a lot of factors are out of your control. Things happen. There can be fire, flood, theft, accident, natural disaster, etc. How do you protect your interests to minimize losses from any of these situations?

First of all, of course, make sure that you and your logistics vendor carry adequate insurance protecting you against all possible happenings. Have your risk evaluation personnel check them for adequate coverage of your goods. Be sure your contract with vendors includes adequate coverage for you – not just for their losses.

But, your responsibilities don’t stop there. Make sure that you know what facilities your logistic vendor use and how safely they are run. Does their warehouse have adequate fire protection and sprinkler systems? Do their facilities have proper systems to avoid and detect theft or disappearance of products? What alarm systems do they have? Do they have disaster plans and know what to do in the event of a natural or other disaster?

Check their reputation for getting shipments to their final destinations without incident. Verify that their equipment is modern and well maintained to minimize the chances of breakdowns that affect deliveries.

Today more then ever, it is important that you understand your vendors approach and process to risk management. As Thomas Friedman likes to say, “If you jump off the top of an 80-story building, for 79 floors you can think you’re flying.” As companies face increasing challenges to meet bottom line objectives, unfortunately risk management is one of the shortcuts they often take

Hopefully, every shipment of yours leaves your facilities and arrives at the proper destination without incident. But, be sure you’ve made arrangements for what happens should an incident occur. As they Boy Scouts exclaim “Be prepared!”