Sea freight companies offer services such as the transport of expensive goods and cargo from one place to the other on water. These companies are majorly involved in the transport of bulky goods and products as well as raw materials that could be seen heavier to be borne by other means such as air, roads and rail. There is however risks that threaten the closure of some companies due to losses incurred in the process of delivering the goods.
In most parts of the world, sea freight companies suffer huge loses die to the attacks that they get from pirates who destroy goods that were supposed to be delivered or even steal them. In some cases pirates hijack cargo ships and demand huge sums of money as ransom which threaten the collapse of such companies that become victims of this. As a result of the threat posed by the emergence of pirate gangs, insurance firms that offer insurance cover to goods being shipped across troubled waters and the ships have sky rocketed there premiums. This makes sea freight one of the most expensive and insecure means of transporting goods and manufactured products as well as raw materials.
Sea freight companies face major loses where there are harsh climatic and weather conditions. These include oceanic tides as well as storms. These often affect the navigation leading to ships carrying goods and products getting lost in the high seas. This results to delays and consequent spoilage of perishables. With gods such as horticultural products being shipped from one place to another, delays such as those caused by ships getting lost due to bad weather conditions can result to their damage or even some might expire. When goods expire some of these companies are forced to pay back for loses since the goods were damaged in their hands. This causes a lot of money being spent on refunds and compensations thus threatening the stability of the companies.
In case of accidents caused by harsh weather conditions such as tides, huge damages and loses are borne by sea freight companies. For instance, when a ship that is transporting valuable goods sink, the company is forced to bear loses through compensating the clients for their lost and damaged property. This is because in most cases the insurance cover that is taken by most sea freight companies compensates effectively for low value goods. The companies also lose a lot of facilities in case of accidents.
Sea freight companies have recently been exposed to a stiff and seemingly unfair competition from other methods of transport. For instance, the charges that are charged by rail way freight companies are much cheaper than those of sea freight companies. The sea companies cannot afford to reduce their charges since the transportation of water faces more risks than on rail. These companies end up losing a huge number of clients to the other means of transport and this threatens their operations.
Article Source: http://EzineArticles.com/6124949
Translated by Aryaputra Pande