The Logistics Lens: Chaos Versus Control

By Rick Caporiccio

In a new series for Breakbulk entitled “The Logistics Lens”, Hatch Logistics’ global experts explore the forces shaping project and breakbulk logistics: from risk and execution to geopolitics, sustainability and decision-making in complex cargo environments.

From Issue 1, 2026 of Breakbulk Magazine.

(2-minute read)

Over the years while working in the logistics field, I have attended many presentations on Incoterms, and afterwards someone often asks a simple question, “What Incoterm should I use?” A valid question but one that misses the point. The correct Incoterm isn’t chosen in isolation; it should be selected to manage logistics risks in line with project realities. When you view Incoterms as a strategic risk control lever, you move from chaos to control.

Breaking down a supply chain into its components reveals that each part manages some form of risk that has been identified. Purchase orders are issued with terms and conditions that address the commercial and legal obligations. Vendor quality ensures packages meet technical specifications as agreed in the purchase order. Expediting focuses on keeping fabrication on schedule. However, when it comes to logistics, risk is often overlooked. Too often, I hear, “We shouldn’t take the risk, let the supplier manage the freight.” In a world that is constantly changing, projects should start with assessing risk, rather than asking “Which Incoterm should we use?”

So, what is risk? Risk is an uncertain event or condition that, should it occur, can affect the achievement of the project’s objectives — either negatively as a threat or positively as an opportunity. Defining risks increases the likelihood of meeting objectives while providing assurances that risks affecting the delivery of material have been properly identified, assessed, prioritized, treated and managed.

Wouldn’t a project be better served to first identify the risks associated with transporting materials to your project site, and then develop an Incoterm strategy that offers flexibility to mitigate those risks?

Logistics risks come in many forms. Some can be identified prior to the start of a project through route studies, site visits, review of import/export compliance issues, etc. Other risks may not be identified until after the project begins such as changes in customs/tariffs practices, severe weather events, geopolitical conflicts, port strikes, etc. All projects are unique with different sets of risks. International projects have different risks than domestic ones, so being able to adapt to risks on an ongoing basis would serve a project well.

Those risks may be as follows:

• Economic: transportation rates, insurance arrangements, detention/demurrage, storage limitations, warranty return logistics, site receiving constraints (e.g., maximum deliveries/ day) and site congestion.

• Technical: specialized vehicle selection, route engineering and bridge checks, carrier safety compliance, lashing/securing plans, and load certification.

• Environmental: severe weather, seasonal limitations (freeze/ thaw roads, hurricane season), tarping/packaging standards and sustainability obligations.

• Political: export/import compliance, tariffs, local content, geopolitical issues such as sanctions, embargoes, regional conflicts.

• Social: road closures for heavy haul, public safety, community notifications, infrastructure damage risks and repair obligations.

There is no single “correct Incoterm.” However, you can develop an Incoterm strategy that aligns responsibilities with risks. Your approach should provide authority and flexibility to adapt to changing conditions. Start with risk. An effective Incoterm strategy can be the difference between chaos and control.

About the Author
Rick Caporiccio is a traffic, logistics and materials manager at Hatch with more than 30 years of international EPCM experience. His expertise spans all phases of project logistics development for large-scale projects across domestic and international markets. Throughout his career, Rick has held progressively senior leadership roles, managing logistics teams responsible for the successful delivery of complex projects, including power generation facilities, potash and gold mining operations, electrical infrastructure such as transmission lines, and oil and gas facilities.