Welcome to our last installment of The International Shipper’s Checklist! Now that you’ve got a leg up in the international shipping game, it’s time that you know how to protect your assets. Whether you’re an old hand or a new hat, you understand that shipping is going to open you up to potential loss. It happens with nationally shipped freight, and that risk only increases when you decide to go international. Make sure you’re protected against the headache of financial loss with insurance.
What Could Possibly Go Wrong?
Well, when you’re shipping internationally, a whole host of things, including but not limited to:
- Limited carrier liability— Not a problem, per se, but definitely a concern. As with shipping nationally by truck, so with shipping internationally by air or sea: Carrier liability is limited. International shipping laws favor the carrier, so it’s rare that a carrier will be made accountable for common losses that occur while freight is in transit, whether it’s an Act of God (like a hurricane or storm), or an act of General Average (this is a maritime law that only covers partial loss, while all other cargo holding owners must pay compensation to the cargo owner facing losses). Even if the carrier is made liable, shippers will receive very little in compensation for lost freight (cents on the dollar, really).
- Catastrophic events— We can’t control what happens, especially when we ship cargo by . There are storms to consider, on-board explosions, shipwrecks, and pirate attacks…yes, pirate attacks! Bulk and container ships faced a total of 61 attacks in 2017.
- Rough, international waters— Shipping via freight vessels is especially common considering it’s the more cost-effective way to ship internationally (if time-consuming), and the seas can be choppy and unpredictable. This means that losing cargo containers at sea is a fairly common occurrence, with an average of about 10,000 cargo containers falling off major containerships a year, costing nearly $370 million in losses.
- Cargo damage— Cargo can face a lot more than being bucked off a ship mid-transport. In fact, potential damages can appear in the form of rough transportation, poor handling, infestation (pests or mold due to improper packaging), or improper storage (whether insufficiently packed for protection, or temperature-related issues arise). Much of this occurs in the stowing phase of and can be chalked up to a cocktail of and shore error (this is why packaging is so important!).
What Can I Expect From My Insurance?
You should expect the world! When you’re making that leap into international shipping, there is no price on peace of mind. The benefits of coverage far outweigh the risks involved in shipping—it’s in your best financial interest, after all. In the event of an accident you don’t want to be saddled with the brunt of the costs due to loss or damages.
Look for All Risk coverage. This type of coverage will protect you against damages or loss caused by external forces, of which there are many. This can be anything from damage or loss caused by infestation, inappropriate packaging, customs rejections, and more.
While it’s called All Risk, it’s imperative that you familiarize yourself with what your coverage actually says. So keep an eye on the following sections of your insurance plan:
- Coverage Aspects – The parameters of your coverage.
- Excluded Commodities – What is disqualified from being covered by your insurance?
- Special Insuring Conditions- Are there certain commodities that can’t be covered by your insurance unless they’re packaged a certain way?
- Exclusions of Loss- What events/damages aren’t fully covered by your policy?
- Claim Filing- Every policy has different expectations. Familiarize yourself with yours.
You want to make sure the policy you purchase will cover all of your bases. Leave no stone unturned. In fact, export.gov suggest that you look into two different types of insurance coverages as you move forward with your shipment.
How Easy Is It to Find the Right Insurance?
Shopping around for the insurance right policy requires time and patience, and as we’ve learned in our prior installments, time just may be the most important part of the international shipping game.
So shop around. Compare policies, and seek out the one best suited for your freight. When you book shipments through a third-party logistics company, many provide optional, additional insurance within the booking process.
We’ve Docked—See You At Our Next Series!
Learning about the world of international shipping has been our longest voyage yet, and we’re pleased that you stuck with us! Now it’s time for you to expand your shipping purview. Let FreightCenter help! We’re experts when it comes to shipping, nationally and internationally, and our freight agents can ease you into the process to ensure that you’re sailing smooth.
Check out the whole series here:
Part 1: The International Shipper’s Checklist – Introduction to International Shipping
Part 2: The International Shipper’s Checklist – Customs Brokers
Part 3: The International Shipper’s Checklist – Paperwork & Time Frame
Part 4: The International Shipper’s Checklist – Insurance