5 Fatal Mistakes Beginner Exporters Make When Shipping Goods Abroad

In recent years, Indonesia’s export sector has continued to grow rapidly. Many new businesses, particularly those in the MSME sector, are beginning to venture into international markets. However, behind these significant opportunities lies a significant challenge often overlooked by novice exporters: the risks of shipping goods internationally. From differing regulations between countries, complex export documentation, to damage to goods during sea travel, all of these can directly impact significant financial losses.

Therefore, it’s crucial for novice exporters to understand common mistakes to avoid similar losses. This article discusses five fatal mistakes novice exporters make when shipping goods internationally, as well as professional solutions to protect your business assets. These solutions include a thorough understanding of contracts, the importance of marine cargo insurance, and the vital role of a logistics insurance broker.

And before the real risk comes, Contact L&G Insurance Broker now in 08118507773 for free consultation before any risk occurs. Our team is ready to help you choose the best marine cargo insurance coverage to ensure that every shipment of goods abroad is safe from potential losses.

Why Are Beginner Exporters Vulnerable to Risk?

Many novice exporters are too focused on securing sales contracts to overlook a crucial aspect: the risks of shipping goods overseas. In exports, damage, loss, and even rejection of goods by the importer can occur at any time.

The main problem arises because most new exporters don’t understand the international trade system, customs regulations, and the details of responsibilities outlined in shipping contracts (Incoterms). As a result, when problems arise at sea, there’s insufficient protection to cover losses. However, shipping risks can be minimized if exporters understand the cost structure and responsibilities through Incoterms, such as FOB (Free On Board), CIF (Cost, Insurance, and Freight), or EXW (Ex Works), from the outset. Without this understanding, exporters can assume risks that should be borne by others.

This is where logistics insurance brokers play a vital role in helping exporters understand contracts and protect goods through marine cargo insurance.

List of 5 Fatal Mistakes of Beginner Exporters

1. Not Understanding International Shipping Contracts

Risks of Incorrect Interpretation of Incoterms

The most common mistake made by novice exporters is signing a shipping contract without understanding the liability clauses stipulated by Incoterms. In the export business, a shipping contract specifies who is responsible for the goods during the shipping process: the exporter (seller) or the buyer (importer).

Example: A coffee exporter from Sumatra used the CIF (Cost, Insurance, and Freight) term without purchasing the appropriate marine cargo insurance policy. Under a CIF contract, the seller is obligated to provide insurance. When the ship encountered bad weather and some of the cargo was damaged by moisture, the shipping company denied the claim, as the responsibility for insurance rests with the exporter as the seller. As a result, the company suffered losses amounting to hundreds of millions of rupiah. This case demonstrates that the risks of shipping goods overseas begin at the negotiation table.

Solution: Make sure you understand every detail of the shipping contract and don’t hesitate to consult a logistics insurance broker who understands Incoterms. They can help evaluate your responsibilities and recommend the most appropriate insurance policy to protect your exported goods. Therefore,Contact L&G Insurance Broker now at08118507773for free consultation before any risk occurs.With extensive experience in marine cargo insurance, the L&G team will help you understand contract clauses and minimize the financial risks of every overseas shipment.

2. Not Insuring Export Goods with Marine Cargo Insurance

Threat of Force Majeure at Sea

The second and most common mistake is not insuring exported goods. Many novice exporters consider freight insurance a mere formality or an additional expense that can be ignored. However, damage to goods at sea is a very real possibility and difficult to control.

Large waves, ship fires, extreme weather, and even theft at port can cause total losses. Without insurance coverage, these losses are entirely the responsibility of the exporter. Marine cargo insurance offers financial protection against these various risks of shipping goods abroad. This policy covers damage, loss, or even delays in shipment due to accidents at sea, in the air, or on land.

With the support of an experienced logistics insurance broker like L&G Insurance Broker, exporters can choose the right policy for both single voyage and annual shipments. An All Risks policy is highly recommended as it covers almost all risks except those specifically excluded. Don’t wait until you lose your business assets. Contact L&G Insurance Broker now at 08118507773 for a free consultation before taking the risk.

3. Wrongly Selecting the Shipping Method

Mismatch between Transportation Mode and Goods Characteristics

Another common mistake is choosing a shipping method without considering the characteristics of the goods and the risks of the journey. For example, perishable goods like agricultural products, processed foods, or chemicals require refrigerated shipping and short transit times. However, many novice exporters choose cheaper sea routes without considering weather conditions or the length of the journey. As a result, goods arrive damaged and unaccepted by the buyer.

Furthermore, some exporters use shipping services with no reputation or cargo liability guarantees. However, the carrier’s liability is often limited and does not cover damages caused by force majeure.

Solution: Use a reputable shipping service and protect your cargo with marine cargo insurance that covers all major risks, including damage during transit and total loss. For complete guidance and to choose the best policy for your exported goods, visitcontact L&G Insurance Broker at08118507773for free consultation before any risk occurs.

4. Incomplete Shipping Documents

Dangers of Customs Failure and Claim Rejection

Many novice exporters don’t understand the importance of complete documentation such as the Bill of Lading (B/L), Invoice, Packing List, Insurance Certificate, and Customs Documents. Inaccurate documentation can lead to delays at the port, additional costs, or even rejection of the cargo by the destination country. The risks of shipping goods abroad increase significantly if the documents are inaccurate.

In addition, without a valid insurance certificate, exporters cannot file a claim in the event of damage or loss of goods.

Important tip: Ensure your documents comply with applicable Incoterms, and always request verification from a logistics insurance broker to ensure your policy certificate is recognized by international shipping companies. L&G Insurance Broker is ready to assist exporters in verifying the completeness of insurance documents and recommending coverage that meets international standards.Contact now at08118507773for free consultation before any risk occurs.

5. Not Managing Claims Properly

Loss of Claim Rights Due to Delay

The final common mistake is failing to properly prepare the claims process. Many exporters don’t know what steps to take when goods are damaged or lost. As a result, claims are rejected by insurance companies.

Commonly missed steps:

• Not reporting the incident within 3×24 hours.
• Did not retain proof of damage or original shipping documents.
• Not knowing the types of risks covered by the policy.

However, with the assistance of a logistics insurance broker like L&G Insurance Broker, the claims process can be swift and efficient. The broker acts as an intermediary between the exporter and the insurance company, ensuring that your rights as the insured are fully met.

The Role of Logistics Insurance Brokers in Claims Settlement

A logistics insurance broker will assist exporters through the complex process, including collecting survey reports from independent parties, negotiating claim amounts, and ensuring timely compensation payments. This is crucial, as every minute of delay in claims can mean significant financial losses.

Conclusion

Becoming a novice exporter is certainly not easy. The world of international trade is full of opportunities, but also fraught with risks. The five fatal mistakes mentioned above often occur not due to ill intent, but rather due to a lack of experience and understanding of the importance of proper protection. Ignoring marine cargo insurance, misinterpreting Incoterms, and document oversight are the main gateways to financial loss when shipping goods internationally.

Exporters should view freight insurance not as an expense, but as a strategic investment. With the support of a professional logistics insurance broker like L&G Insurance Broker, every exporter, whether novice or experienced, can ensure that every shipment is protected with marine cargo insurance tailored to their needs. Brokers ensure your policy is valid, your documentation is complete, and your claims are handled professionally.

Don’t wait until losses destroy your business capital. Protect your export business today. Contact L&G Insurance Broker now at 08118507773 for free consultation before risk. We are ready to assist you from the planning stage, through policy selection, to claims settlement quickly and transparently, ensuring that every shipment of your goods abroad runs safely.