Risk management of cargo damage in export operations of ocean freight forwarders in Taiwan

Abstract

The main purpose of this article is to study cargo damage risk management in the export operations of ocean freight forwarders in Taiwan. This study applies the five risk management procedures of the formal safety assessment method as a basis for risk management assessment. The fuzzy analytical hierarchy process method is first employed via a first questionnaire to evaluate key risk identification factors. Second, a risk matrix model is constructed to evaluate the risk levels via a second questionnaire. Third, cost and benefit analysis is implemented to evaluate the feasibility of risk control strategies through the use of a third questionnaire. The empirical results obtained in this study revealed that the most severe risk factor comes from the process of consolidation, and all risk factors fall into “as low as reasonably practicable” area via the risk matrix model method. Finally, the cost and benefit analysis shows that all risk management strategies are feasible. This study recommends that ocean freight forwarders strengthen communication with new cargo owners in order to gain a better understanding of the cargo owners’ backgrounds and their cargo characteristics. This will help the ocean freight forwarders to make better-informed decisions concerning the handling of cargo and allow them to form links in customers’ risk management chains.