由 caicai8478 In international trade, political and war risks fall under the category of “force majeure” risks, which are unpredictable and highly destructive. Unlike operational risks, these risks directly threaten the fundamental safety of goods, transportation vehicles, and even personnel, and are often beyond a company’s control. Systematically identifying and mitigating these risks is key to ensuring the security of international supply chains and corporate assets.
I. Main Risk Manifestations
Political and war risks are not a single risk, but rather a collection of risks arising from political unrest, armed conflict, and government actions.
- Direct Physical Damage Risk:
Cargo Damage or Loss: Cargo in transit is directly damaged or completely lost due to bombing, shelling, fire, looting, etc.
Destruction or Requisition of Transportation: Ships, aircraft, trucks, and other transportation vehicles are sunk, shot down, damaged, or temporarily requisitioned by warring parties in a conflict zone.
Critical Infrastructure Failure: Damage to logistics hubs such as ports, airports, railways, bridges, and warehouses prevents cargo from being loaded, unloaded, or transferred.
- Transport Disruption and Blockade Risk:
Route/Route Disruption: Key waterways (such as the Red Sea and the Black Sea) or land transport routes are forced to close due to war or terrorist attacks.
Trade Embargoes and Economic Sanctions: The United Nations, the United States, the European Union, and others impose sanctions on specific countries, regions, entities, or individuals, prohibiting or restricting trade and financial transactions with them.
Port Blockades: Naval forces impose a military blockade on ports, preventing ships from entering or leaving.
- Legal and Compliance Risks:
Cargo Seizure or Confiscation: Governments or armed forces may seize or confiscate cargo on grounds such as violations of regulations or support for hostile forces.
Contract Performance Hindered (Force Majeure): War, riots, and other events prevent delivery as per a trade contract, leading to commercial disputes and requiring the invocation of a “force majeure” clause to protect against liability.
Sanctions Compliance Risk: Inadvertently transacting with sanctioned entities can lead to severe consequences for the company, including hefty fines and blacklisting.
- Derivative Business Risks:
Sharply rising transportation costs: War risk insurance premiums soar; ships are forced to take longer routes, such as around the Cape of Good Hope, increasing fuel and time costs.
Supply Chain Disruption: Sudden disruptions in supply chains that rely on raw materials or components from conflict zones can lead to a halt in downstream production.
Sharp exchange rate fluctuations and payment barriers: Sharp devaluation of the currency of a conflict-affected country or collapse of its banking system can make it difficult to collect payments.
II. Core Avoidance and Response Strategies
To address political and war risks, a comprehensive strategy is needed: “pre-emptive avoidance as the core, supplemented by in-process response, and backed by financial instruments.”
A. Pre-emptive Prevention and Mitigation Strategies (Core Focus)
Comprehensive Trade Environment Assessment:
Political Risk Monitoring: Before entering a new market or signing a large-scale contract, utilize reports from professional institutions (such as think tanks and risk consultants) to continuously monitor the target country’s political stability, potential for regional conflict, and relations with major powers.
Sanctions List Screening: Establish a rigorous compliance process to ensure that all transaction counterparties (buyers, sellers, freight forwarders, banks, etc.) are not on any international sanctions lists.
Supply Chain Diversification and Resilience:
“China + 1” or Regionalization Strategy: Avoid over-concentrating production or key suppliers in geopolitically high-risk regions. Diversify risks by establishing alternative supply sources in different countries or regions.
Pre-positioning Critical Inventory: For critical supplies, utilize overseas warehouses or third-party logistics warehouses to establish buffer stocks in safe areas to cope with sudden supply disruptions.
Careful Contract and Trade Terms Design:
Clear “Force Majeure” Clauses: In sales or purchase contracts, clearly list “war, hostilities, civil war, rebellion, revolution, uprising, coup d’état,” and “government actions (such as embargoes and sanctions)” as force majeure events, and specify in detail the notification, exemption, and contractual settlement procedures upon their occurrence.
Choose Trade Terms (Incoterms) Carefully:
For Exporters (Sellers): Try to choose terms that provide less control, such as EXW (Ex Works) or FCA (Free Carrier), to transfer risk as early as possible.
For Importers (Buyers): Try to choose terms that provide greater control, such as DAP (Delivered at Place) or DPU (Delivered Unloaded at Place), to better control shipping routes and insurance arrangements. However, be aware that in high-risk regions, this may mean assuming additional risk.
Payment Method Selection: For high-risk regions, prioritize using an irrevocable letter of credit (L/C) and ensure it is confirmed by a reputable international bank. Consider also requesting a higher prepayment ratio.
B. Financial and Insurance Instrument Transfer Strategy
War Risk Insurance:
Standard cargo insurance policies often exclude war and strike risks, requiring separate coverage.
War risk insurance primarily covers physical loss or damage to cargo caused by war, civil war, revolution, rebellion, and other acts. When a vessel enters an area designated as high-risk by the insurer, it is usually necessary to notify the insurer in advance and may pay an additional premium.
Utilizing Export Credit Insurance:
Official export credit agencies in many countries (such as China’s Sinosure) offer political risk insurance.
This type of insurance covers losses caused by actions of the importing country’s government, including exchange restrictions, trade embargoes, losses caused by war, civil war, revolution, or rebellion, and prohibitions on payment by the buyer’s government. It is a key tool for protecting receivables.
C. On-site Emergency Response Strategy
Establishing a Risk Early Warning and Emergency Response Mechanism:
Subscribe to a professional global security alert service for real-time monitoring of developments in shipping routes.
Develop a detailed business continuity plan (BCP) and emergency response plan to clearly define decision-making roles, communication methods, and alternative routes and options for different risk levels.
Flexibly adjust logistics plans:
Dynamic route changes: Closely monitor the situation. If risks escalate in a particular area, immediately negotiate with the freight forwarder to reroute, even if this involves a longer, more costly route.
Change destination or transit port: Evaluate the feasibility of changing the final destination or transit port before the cargo enters a high-risk area.
Maintain transparent communication:
Internal communication: Ensure that management, sales, procurement, and logistics teams have a unified understanding of risks and can make quick, collaborative decisions.
External communication: Proactively and promptly communicate risk profiles and response plans with customers and suppliers, sharing losses or finding solutions to maintain business relationships.
Conclusion: Political and war risks are among the highest-level threats in international logistics, highly destructive and unpredictable. Companies must not rely on chance and must integrate them into their core risk management framework. A three-tiered defense system encompassing “early-stage assessment and avoidance, mid-term financial transfer, and late-stage emergency response” can maximize the security of goods and supply chains, even in the most adverse external environments, and achieve sustainable international trade. In today’s complex and volatile global geopolitical landscape, the ability to manage political and war risks is increasingly becoming a core competitive advantage for businesses.