7 Logistic Mistakes To Never Make When Transporting Commodities

The entire process of sourcing and shipping commodities are all important to the success of every commodity trading transaction. From purchasing products at the right price to selling with a profitable margin, many activities happen in-between, but one vital aspect that a lot of people fail to pay close attention to from the very beginning is ensuring that the logistics process is as seamless as possible because a mistake here could cost the trader most of their investments.

If you plan to or are constantly trading commodities, here are 7 logistic mistakes to never make when transporting commodities:

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1). Using The Wrong Type Of Truck For The Product:

Every commodity is unique. It could be fresh, dry, non-edible, toxic, and much more. But depending on what it is to be used for, it has its own unique properties.

For instance, if you’re shipping agro commodities, you’d need a cooling truck for fresh products and an open truck for dry products. If you’re shipping bitumen, you’d need a heating truck, pallets would need a flatbed truck, and the list goes on.

Even for shipping containers, you’d need to use a reefer container for fresh goods, a general-purpose container for dry goods, and a flexitank for oil-based products.

First, determine the type of commodity you’re shipping and what means of transportation is best suited for it to avoid putting the right goods in the wrong truck or the likes and losing your investment in the process.

2). Not Securing All Government Papers Before Transporting:

Before you transport goods from its source, there are various government levies that are required to be paid depending on what products you’re transporting and where you’re transporting from. There are also some licences that may be required depending on the commodity being shipped.

Ensure you always secure all the required permits before you transport any goods to avoid them been seized in transit or costing you ridiculously high fines.

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3). Agree To Pay Nothing More Than 50% Of The Fee Upfront:

When you secure a truck to transport your goods, never pay more than 50% upfront. If you pay more than this or even 100%, the owner of the truck could tend to start acting unprofessionally and could treat the delivery of your goods as unimportant.

By paying half the sum, the logistic company knows that they have a balance to collect and would do all they can to deliver the goods on time so they can retrieve it.

4). Agree Upfront On Who Would Responsible For Covering All Road Clearance Expenses:

Asides from levies at the point of loading, trucks do incur a lot of expenses en route their destination. There are always several fees to pay at so many checkpoints and these fees could run into 10-15% of even the cost of leasing the truck.

You should always negotiate upfront that you will not be responsible for any road clearance charges and will only be paying a logistic amount prenegotiated. If you don’t do this, you may even pay more than an extra 25% on the total logistics fee.

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5). Not Buying An Insurance Policy:

Anything can happen to goods in transit and this is why it is key to always have a GIT insurance policy in place before you transport any commodity from any part of the country.

If in the process of transportation, the truck gets into an accident, catches fire, or any other thing happens and part of most of the goods are lost, the insurance company would compensate you with the entire value of the goods.

6). Not Having An Escort In The Vehicle:

You must always have an escort in any truck you hire so that you can call them to know the true situation of things in transit at all times. If you don’t, you run the risk of totally being in the dark, especially when the goods are taking longer than usual to arrive, and even worse, you run the risk of the goods been diverted or parts of it stolen, with the logistics company claiming you never loaded the true amount you claimed to have loaded.

See Also: 5 Risks Of Exporting Manufactured/Processed Goods And How To Avoid Them

7). Not Factoring Miscellaneous Fees:

You must always factor in a 10% miscellaneous transportation fee because things like accidents, vehicle breakdown, extended wait times, and more can happen in transit.

What are your thoughts on these 7 logistics mistakes to never make when transporting commodities? Let me know by leaving a comment below.