States—Workers’ Compensation, benefits, product liability,
property loss or damage, goods as work-in-process or in
transit, and so on.
However, there also can be marked differences, depend-
ing, for example, on the country in which a company con-
ducts business, the nature of the agreements and contracts,
the details of the supply chain, and local laws and insurance
Most corporations have staff risk managers to handle
these exposures in the United States and abroad. Most risk
managers arrange insurance programs through specialized
insurance brokers and companies that have the required ex-
pertise in international business.
Supply chain professionals, logistics managers, purchas-
ing executives, import specialists, chief financial officers, and
all others involved in the supply chain who are making con-
tracts, agreeing to various inbound options, making freight
and warehousing arrangements, working with international
communication sales terminology (INCO Terms), and so on,
need to understand that they are directly affecting the risks
and exposures of the company and therefore need to be edu-
cated in this regard and work within the company’s estab-
lished risk management guidelines. If no guidelines exist—it
is critical to establish them. Consider the following example.
A purchasing manager acquires goods from a new sup-
plier in Thailand. He makes the purchase on FCA Bangkok
terms, prepaid. The purchasing manager releases invoiced
funds before receiving the merchandise and takes insurance
responsibility once the carrier nominated by him in
Bangkok receives the goods. Thus the risk of loss and dam-
age during international transit is now in the hands of the
purchaser. Has marine cargo insurance been arranged?
What are the terms? Are the limits enough? Is the coverage
appropriate for the mode, conveyance, and actual details of
the transportation process? These questions should have
been reviewed in great detail and answered before the deal
was finalized and the goods shipped.
136 GLOBAL SOURCING LOGISTICS