What You Should Know About COI Tracking for Logistics, Transportation & Supply Chain Management
Any business that works with contractors, suppliers, and vendors exposes itself to third-party risk, and companies in the logistics, transportation, and supply chain management industry are no exceptions. While your network usually helps keep your business running smoothly, an incident with a supplier or vendor can throw off your fine-tuned systems.
Effective risk management is critical to limiting your exposures, and comprehensive COI tracking is the backbone of a robust program.
Potential Sources of Third-Party Risk in Logistics, Transportation & Supply Chain Management
If a third party has access to your data or systems, a breach on their end could also expose your sensitive information, potentially including intellectual property, contact and financial information of clients, and more. While the actions or inactions of a vendor or supplier could be directly responsible for such a breach, you may still be accountable for reporting, resolving, and helping affected clients recover from it.
Laws and regulations govern business conduct. Though you might take steps to ensure your compliance with all relevant requirements, your vendors and suppliers might not be as careful, and you could be found liable for their actions. Relevant regulations vary depending on the nature of your business, but common issues include consumer and financial privacy, sourcing of conflict materials, and compliance with the Foreign Corrupt Practices Act (FCPA).
Not only could your relationship with a third party result in fines if it violates regulations, but potentially other financial losses. If you rely heavily on one supplier or vendor, you may be dependent on their continued viability to sustain normal business operations. If they’re financially unstable or cannot provide the agreed-upon goods or services, your business may be left in the lurch.
For better or worse, the actions of those you work with can reflect on your business. Even a distant supplier’s poor environmental and/or labor practices can make your business look bad by extension. Since brand value is built largely on reputation, one misstep by a vendor or supplier could result in intangible losses.
Just as you issue contracts to your vendors and suppliers to set standards and limit your risks, you also likely signed a contract with your clients. If one of your vendors or suppliers makes a mistake, the ripple effect could be far-reaching, forcing you to violate your contract with your client or clients.
Why Do Logistics, Transportation & Supply Chain Management Companies Need to Track COIs?
- To protect yourself in case damage claims arise
- To simplify the claims adjustment process if a loss occurs
- To ensure vendors and suppliers are compliant with the terms of the contract
- To reduce your insurance costs
Why COI Tracking Software Is Ideal for Logistics, Transportation & Supply Chain Management Businesses
Access Documents Easily
Many COI tracking platforms store information on the cloud, enabling you to access relevant documents from virtually any device anywhere in the world, as long as you have an internet connection. Since logistics, transportation, and supply chain management businesses often conduct business internationally, such worldwide access can be invaluable.
Logistics is more focused on efficiency than most industries, so businesses in this sphere are likely to appreciate the time-saving potential of a COI tracking platform. Not only are dedicated platforms easier to manage than manual spreadsheets, but they’re also equipped with automated features that simplify renewals and bid comparisons.
Utilizing spreadsheets to maintain COI information is an error-prone process that makes it all too easy to overlook expiration dates, input incorrect information, and make other mistakes that could jeopardize your risk management. An effective COI tracking software can help reduce errors, thereby delivering a higher standard of third-party risk mitigation.
bcs: Trusted COI Tracking Software & Support for Logistics, Transportation & Supply Chain Management
bcs is the gold standard in COI tracking for business. With two tiers of service, logistics, transportation, and supply chain management companies can select the level of support they need to achieve their risk management goals. The full-service solution is our most comprehensive option, combining our easy-to-use software with expert support from compliance analysts. The self-service solution supports your team with the powerful bcs app, which is packed with convenient, automated features.
Learn from the pros about risk-mitigation, document tracking, and more, with expert articles from bcs.