Identification and Estimation of Risks of Logistic Companies

• Main Authors: Boniar Svitlana M., Tarashevskyi Maksym М.
• Format: Article
• Language: English
• Published: Research Centre of Industrial Problems of Development of NAS of Ukraine 2019-09-01
• Series: Bìznes Inform
• Subjects: logistic; transport risk; risk-generating factor; risk estimation; risk management; internal control system
• Online Access: https://www.business-inform.net/export_pdf/business-inform-2019-9_0-pages-185_192.pdf

The article defines the factors that cause the risks of transport companies in Ukraine. Factors were evaluated on the basis of international research data of the World Economic Forum 2017–2018. It is revealed that the main risk-generating factors for the transport sector, and the country’s economy as a whole, are constantly growing inflation, high levels of corruption and political instability resulting of the ATO. The system of logistics rules is complemented: to the rules relating to cargo, product quality, product volumes, time and place of delivery, delivery costs, an internal control system was added. The effective directions of the internal control system for a transport company are defined. On the basis of modern researches, the main elements of risk are characterized - the likelihood of occurrence and the impact level on the transport company business. The basic methods for determining likelihood as a first element are presented. The impact level is characterized depending on the business direction (life of employees, the environment, information protection, property losses, etc.) and the calculation of potential losses. The authors proposed an approach to risk assessment based on a combination of quantitative and qualitative methods. The approach was tested on the data of the transport company - the main risks were evaluated in accordance with each of the seven previously defined logistics rules. The proposed approach to calculating likelihood and impact is supplemented by an indicator that takes into account risk-generating factors. Each transport risk has a smoothing factor (determined by each company independently – through a committee or cross-functional expert group). Based on the data obtained after calculations, a risk gradation matrix was developed as the basis for the creation of the future portfolio and risk management plan. The matrix is based on data from an average company and provides for a combination of a probability factor and an influence. The article also dedicated to the main ways of risk responding. The risks which fell into the critical sectors in the matrix after calculation, received recommendations for their minimization.