What Are The Risks In The Process Of Doing International Trade By Sea


Due to its wide range of applications, the large weight and volume of goods that can be shipped, the long distances travelled and the relatively low cost of transport, sea freight is favoured by businessmen all over the world. However, the risks associated with it are greater than with other transport.
Marine Casualty Risks
Marine casualty risk is primarily the risk that occurs to ships and cargoes during or incidental to their transportation by sea. It includes natural disasters and accidents. Of these, natural disasters are those caused by destructive forces due to the vagaries of nature. Accidents are accidents caused by unexpected causes, however, you could refer to oilfield equipment preservation solutions Malaysia for consultation. 
Non-human exogenous risks 
Non-human exogenous risks are risks arising from a variety of external causes other than marine casualties. These risks can be broadly divided into two categories: general and specific external risks. General exogenous risks are those arising from theft, rain, dampness, heat, etc., while the cargo is in transit. Special exotic risks refer to risks and losses caused by political, military, national bans and controls such as war, strikes, refusal to deliver goods, etc. In addition, new policies or new controls enacted by certain countries and certain bans by international organisations may also result in losses due to the inability to export or import goods.

The risk of maritime fraud in the course of trade
There is no precise international definition of maritime fraud, which is the artificial deception and concealment of transport routes, cargo conditions and costs, as a means of gaining unlawful profits and causing losses to innocent parties. The spread and rampant nature of this practice have become a major obstacle to international trade and pose a serious threat to the commercial, shipping, insurance and financial industries of all countries.
Charter party fraud
Charter party fraud is a form of fraudulent use of charter party contracts, which can be divided into time charter fraud and voyage charter fraud. In time charter fraud, the fraudsters first set up a company in a distant tax haven and then enter into a time charter contract with the shipowner as the charterer. After paying the initial hire, the fraudsters rename the vessel and sublet it on a voyage charter as a second owner. After loading the ship at the port of shipment, issuing a pre-paid bill of lading for the cargo and depositing the pre-paid freight received in their own account, they declare bankruptcy or simply escape.  Under a voyage charter, the hire is calculated on the basis of the distance travelled. The charterer pays the shipowner in advance so that the cargo can be loaded onboard. However, during the sea journey, the shipowner demands a change in the payment terms or a higher payment rate for various reasons, otherwise, the ship is diverted or the cargo is sold in another area. In order to avoid further losses, the cargo owner has to accept the shipowner’s conditions. Such fraudulent practices abound in international trade.
 
The post What are the risks in the process of doing international trade by sea?  first appeared on Mujadafewa.
The post What are the risks in the process of doing international trade by sea?  appeared first on Mujadafewa.


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