Analyzing Common Trade Risks Faced by Tanzanian Traders in International Transactions: A Case Study of Dar es Salaam Importers and Exporters

Abstract

International trade is fraught with inherent risks that can significantly impact the efficiency and success of cross-border transactions. Tanzanian importers and exporters, particularly those navigating the complexities of the Dar es Salaam port, face challenges such as shipment delays, vague contract terms, and financial disputes. This study delves into how the strategic application of International Commercial Terms (Incoterms) serves as a powerful risk management tool, offering clarity and structure to international trade agreements. Utilizing a descriptive research design, we surveyed 96 traders and conducted in-depth interviews to capture their experiences with trade risks and their understanding of Incoterms. The findings reveal a widespread gap in formal training on Incoterms, leading to frequent logistical issues and contractual ambiguities that could otherwise be mitigated. This research highlights the urgent need for targeted educational programs to enhance traders’ knowledge of Incoterms and improve the overall efficiency of Tanzania’s trade environment. By embracing these standardized terms, Tanzanian traders can transform risks into opportunities, positioning themselves as key players in the global trade ecosystem. The study concludes with actionable strategies for improving Incoterm adoption and presents a roadmap for strengthening Tanzania’s competitive edge in international commerce.