GlossaryEN1 min readUpdated: Jun 18, 2026

risk reduction

A logistics provider notices that a supply chain repeatedly stalls due to subcontractor failures and customs backlogs at specific border crossings.

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://www.iso.org/iso-31000-risk-management.html

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Incoterms 2020 Simulator: Who bears costs & risk?

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Definition & Explanation

A logistics provider notices that a supply chain repeatedly stalls due to subcontractor failures and customs backlogs at specific border crossings. This is precisely where risk reduction comes into play: a structured process that brings identified risks down to an acceptable level without eliminating them entirely. The forwarder first assesses the likelihood and operational impact of each risk—on delivery schedules, costs, and service quality. Targeted measures follow: dual sourcing, advance customs filing, reinforced packaging, regular partner audits. Their effectiveness is then monitored and refined on an ongoing basis. Unlike risk avoidance, the underlying activity continues; only its potential for harm is curtailed. Risk reduction is therefore the most pragmatic strategy in the risk management toolkit and the one most commonly applied in day-to-day freight operations.

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Calculate customs valueWork out import duties and customs valueOpen Compare IncotermsClarify duties, cost and riskOpen Find HS codeDetermine the tariff number for customsOpen Calculate transit timeEstimate duration per transport modeOpen

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risk reduction

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