Common Issues with Freight Agreements (And How to Avoid Them)
If you’re a freight forwarder or taking into account the possibility of hiring a freight forwarder, have an agreement that sets out the terms of the arrangement, including the services provided, payment schedules, and the consequences if something goes wrong in the import/export process. You’ll have to make a new agreement at some point, and the last thing you want is to get it wrong. That’s why it’s crucial to become familiar with the most common issues associated with shipping agreements. Here’s what you need to watch out for.
Pre-Negotiating Risk Transfers
Shipping issues are expected to linger well into 2022. It’s hard, if not impossible to move products amid the supply chain restrictions. The fraktavtal must clearly outline the liability of each side, mentioning who can be held responsible for any loss that occurs due to negligence or otherwise. The shipper is responsible for the origin costs, including export clearance and freight costs for carriage to a specific destination. It’s recommended to solve disputes ahead of time rather than argue who is responsible after issues have already arisen.
Freight Agreements Leave Little Room for Market Fluctuations
Freight agreements aren’t designed for disruption. You can’t hold a shipper accountable for a delay if other terms are listed in the contract. In terms of transportekonomi, this translates into uncertainty and higher shipping costs. The agreement will help you establish your position, understand what obligations have been breached, and what options are available to you. Delivery obligations must allow room for flexibility. Rebidding during severe market fluctuations isn’t an ideal situation. However, investing in retaining rebids can improve your company’s chances of winning.
Issues With Insurance Requirements
It’s not uncommon for freight contracts to include insurance requirements to compensate potential losses. More isn’t always better, just so you know. Keep in mind the benefit of using an established professional intermediary. It might be better to manage risks through your own insurance company instead of shifting responsibility. Determine and document the value of all cargo in case of loss, damage, or dispute. Clear communication at an early stage will allow all parties to adapt to the situation as it progresses. This in turn will help preserve business relationships.
All in all, participants in the transportation industry place much interest in freight agreements, indispensable tools for managing risk. They are the cornerstone of the fraktupphandling process. Enforcement provides a means to ensure that promises made are committed by both parties. The consequences of failing to comply with the terms of the agreement can be severe. To make sure that you can collect compensation from a breaching party, reach out to an attorney.
The other party must show respect for the interest of others in the existing agreement. An environment of cooperation and dialogue must be created to make sure the terms are acceptable to both parties. As a result, a freight contract has to be revisited annually even if the scope of work doesn’t change. This increases the likelihood that the contract will make a positive business impact.