Inspection cuts risks

In the second instalment of a five-part series on transport logistics, Alison Birrane investigates the role of cargo inspectors in the process.

ENSURING the safe arrival of goods is a chief concern of importers and exporters. But what if something goes wrong? What happens if the goods arrive contaminated, damaged or in lesser quantities than agreed?

The services of cargo inspection companies become crucial in determining who or what is responsible.

Cargo inspection companies provide risk management services for international trade by carrying out independent inspections and testing of commodities before and after they are shipped to certify that they are true to specification.

Intertek Testing Services chief Lindsay Bishop said cargo inspection companies provided “intervention at the point of export”, by checking for quality, quantity and to ensure the goods were not substituted after inspection with goods of lesser quality or value.

However, cargo inspection is not the only service that is provided. 

There is a range of tasks conducted by highly-skilled personnel including cargo inspection; sampling and analysis; quality and quantity control; expediting; and logistics.

Mr Bishop said in the case of oil, a cargo inspection company might be hired to test samples and provide a detailed report that outlined the quantities of certain substances contained within the sample.

“With crude oil, for example, clients generally want to know exactly what they are dealing with because it makes a difference when you mix it and the overall quality of the final product is affected,” he said.

Mr Bishop said there were many things that could go wrong during transportation of goods and determining that cause could either save or cost a corporation millions.

“For example, if you are shipping gas or oil and there is less of it when it arrives at the other side there might have been evaporation, or it might have been used to fuel the ship during shipping, which means some of it has been stolen,” he said.

Other problems arise during shipping if a product becomes contaminated, such as a leak in a ship causing oil to become contaminated with water or if the goods have been loaded by machinery that has not been cleaned properly from prior use.

“For example, you don’t want a situation where sugar is loaded onto a ship on a conveyer that has previously been used to load mercury,” Mr Bishop said.

He said an inspection company could become involved at any stage of the transport process, including inspecting the cleaning of machinery to protect the interests of the client.

Mr Bishop said a cargo inspection company was often hired by both the buyer and seller of goods to settle any disputes that might arise.

He said the work carried out by cargo inspection companies was largely dependent on the integrity and reputation they had in the marketplace as it provided a basis for confidence between the exporter and the buyer, particularly when they were not known to each other.

“It keeps people honest,” Mr Bishop said.

The business of cargo inspection in Western Australia is predominantly used by primary producers in the agricultural and resources sectors, however, the services are also utilised when shipping consumer goods such as cars and for testing known quantities of certain agents such as when shipping chemicals.

The services of a cargo inspection company might be used by corporations, banks, shipping, companies and government agencies along with insurance companies that process claims arising from disputes.

Small to medium enterprises that trade manufactured goods such as clothes or food may not need to utilise the services on offer because both parties have a vested interest.

“If you don’t provide a quality product, you won’t have a sale and you will lose your customer,” Mr Bishop said.

But according to Mr Bishop, the question of whether to use a cargo inspection company comes down to one thing.

“How much do you value your risk?”