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Potential Legal Risks

Table of Contents


The main logistics risk

Legal risk

Steps to overcome the problems of logistics organization



Introduction to TMT Logistics Company

A large national logistics company TMT, is arranging a business case in order to create a new service line by means of which drones parcel will be sent to the selected inner Sydney suburbs with the help of a key client Nozama. Nozama, is a global online retailer. This study will describe the potential legal issues which will arise from the proposed new services. in addition, steps to overcome these issues will as well discuss in this study.

Logistics providers face a variety of challenges and management and strategic risks due to factors such as instability, terrorism, conflict and recession. Freight forwarders face the logistics risks of globalization and it is important to develop and implement strategies to protect logistics safety.

The Main Logistics Risk

Mergers and acquisitions, lack of security and safety measures, theft and hijacking, defaults and career delays are the main logical risks that companies have. In general, operational risk refers to the risk or possibility that if appropriate protective measures are developed and implemented, losses, liabilities, injuries and losses can be avoided to varying degrees. Logistics providers should concentrate on human resources, interface efficiency, chain of responsibility and knowledge and skills (Fernie, et al., 2010).

Legal Risk

Contractual and legal risks are primarily related to contractual obligations and failure to meet the terms of the contractual obligation. Terms and Conditions Often comprise different interpretations of the clauses, including provisions for compensation, billing procedures, party relations, confidentiality, notices, separations, etc., may result in disputes over civil lawsuits and contractual obligations and their effectiveness (Gotzamani, et al., 2010).

Cargo Theft

Fraud is often associated with theft as well as misappropriation. The distribution and logistics industries are certainly not immune from this type of crime. Cargo theft can occur during shipping and storage operations as well as during shipping and unloading. Extensive subcontracting and the use of owner-operators increase the risk of cargo theft. Meanwhile, the industry wants to reduce the risk of small pilferage through sealed containers and track-end trace systems. Up to 73% of companies operating in the distribution, supply and logistics industries face some form of fraud. Theft of cargo does not cause much damage, but it also involves various other means of removing property for personal use. Cargo theft has become one of the most common legal problems in this difficult industry. This is a problem that distribution law cannot protect operators.

Money Leaked

Improper management can result in revenue leaks. The distribution, supply and logistics industries create dynamic, fast-growing and ever-changing economic conditions. Companies often fail to enforce effective controls when entering new markets or focusing on new acquisitions. This lack of control is an opportunity for deception. For companies that do not combine shipping, revenue recognition and billing for all of their subsidiaries, revenue evasion is a major concern (Sundin and Dunbäck, 2013).

Manipulating Financial System

The temptation to strategize financial statements is very real in the distribution, supply and logistics industries. Although the law of distribution requires businesses to have a clear financial statement, narrow marginal books have made it more attractive than ever. Criminals are driven not by chance, but by purpose. And in this industry, purpose is very present. Most logistics companies in all sectors of the industry work with very narrow margins. Achieving profit goals and achieving profit has become increasingly difficult and many people are cheating. In addition to these three common legal issues, the distribution, supply and logistics industries are at risk of illegal distribution, failure to separate cash receipts, cash withholding or cash application fees that could lead to commercial bribery. And face a decentralized structure with bribes. Industry detectives can win big money, fail to document emergency services, threaten the possibility of misuse and increase the likelihood of bribery by senior government officials.

Steps to Overcome the Problems of Logistics Organization

Inventory Visibility, Tracking and Management

Inventory is the basis of a number of logistics businesses. The capability to effectively comprehend and manage the inventory is regarded as the one of the key skills of logistics businesses. Sales of the company or the consumer satisfaction can be impacted in case the logistics company do not have a real time and detailed visibility within the available inventory at a specific location. In addition, from time to time supply chain requires inventory tracking and management from numerous locations, warehouses, or stores especially when business systems are not centrally connected. Or overcoming these issues nowadays, logistics companies are investing in integrated cloud-based technologies that provide the organization with accessible real-time data regardless of space or time, including warehouse management systems and transportation (hong Zhao, et al., 2010).

Reduce Transportation Costs

Shipping costs can make up a significant portion of an organization's overall logistics budget. As fuel prices rise, customers pay tolls and shipping costs. For addressing this issue, companies are incorporating better strategies to help identify transportation-related problems and help develop appropriate solutions. The logistics industry has begun integrating autonomous tracking and artificial intelligence into vehicles to track potential real-time data and potential alternative routes to reduce supply costs.

Human Resource Management

As the transportation and supply industries continue to evolve, there is an urgent need for a fast, smart and organized talent system to log in to all incoming and outgoing products. With the advancement of companies like Amazon, the need for faster and more efficient shipping strategies in the T&L industry has now become a problem that has begun to solve many problems. Therefore, the supply industry has adopted the use of robotics and drone technology in warehouses, which can create an unlimited workforce environment without the need for additional costs. The Robot Man Power Machine will quickly select inbound and outbound packages, place parcels in suitable shelves / shipping containers, and ensure that packages are defective before shipping (Woodford and Kuljanin, 2013).

Department Services and Customer Service Are Provided

When sharing information between departments through a single channel, the supply chain relies on departmental and customized technology skills. In the field of supply sciences, sharing data across the supply chain allows customers to make better choices about the products they buy and builds trust between brands and customers. It even shifts hands between manufacturers, retailers and customers. The block chain allows the supply chain to move through inventory and other businesses across the organization to industries that require inventory through a common portable tracking system. Companies are beginning to integrate block chain technology into their online shopping websites, allowing customers to reconfigure package routes and desired delivery times after placing an order.

Conclusion on TMT Logistics Company Analysis

Companies can take seven steps to prevent cargo theft. The company should Screen potential employees thoroughly. Some cargo safety experts argue that the high rate of cargo theft comprise information and problems. Logistics company should choose their shipping partners and intermediaries carefully. Logistics Company should keep in mind that these companies take care, maintain and manage these products after leaving this facility until they reach their destination. Logistics company should establish a culture of security within the organization as well as they should offer security training to their workforce for preventing the issue related to cargo theft. the company should implement a safety factor in determining cargo routing. Cargo thieves get off the truck at casing points (factories, warehouses, distribution centers) known as "cases", stop the driver and wait for them to load their luggage. Drivers should not be allowed to stop in the "red zone" (first 200 miles / four hours from the start) or any well-known hotspot. Security guards patrol and patrol from the surrounding area. The company should take the benefits of modern technology to overcome the issue of cargo theft. Regular security surveillance should be performed by the logistic company as Criminals are constantly gathering new ideas and modifying previous strategies (Fernie and Sparks, 2018).

References for TMT Logistics Company Analysis

Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.

Fernie, J., Sparks, L. and McKinnon, A.C., 2010. Retail logistics in the UK: past, present and future. International Journal of Retail & Distribution Management.

Gotzamani, K., Longinidis, P. and Vouzas, F., 2010. The logistics services outsourcing dilemma: quality management and financial performance perspectives. Supply Chain Management: An International Journal.

hong Zhao, Q., Chen, S., Leung, S.C. and Lai, K.K., 2010. Integration of inventory and transportation decisions in a logistics system. Transportation Research Part E: Logistics and Transportation Review, 46(6), pp.913-925.

Sundin, E. and Dunbäck, O., 2013. Reverse logistics challenges in remanufacturing of automotive mechatronic devices. Journal of Remanufacturing, 3(1), p.2.

Woodford, K. and Kuljanin, M., 2013. TMT overtaking the traditional sectors. Journal of Corporate Real Estate.

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