Category: Cargo Insurance
Intermediaries serve an important function since, without them, it would be nearly impossible for companies to deliver their products to the end user. These freight forwarders can provide services without the need to own or control the entire supply chain. The use of these intermediaries helps to serve many of the critical functions associated with reducing transaction costs, as well as diversifying risks and exposures associated with the transportation of goods.
Problems can and will occur during transit from time to time, so there is a definite need for cargo insurance to address any marine cargo claims filed. This serves as protection to supply chain intermediaries. Distribution of goods is an important part of US commerce, and these intermediaries are generally independent companies or organizations within the channel that make products available to consumers.
Supply chain agencies face difficult challenges
Any number of transit risks can be quite costly, and can range from something as simple as rough handling of goods resulting in damage, to theft, accidents or collisions, non-delivery due to jettison (the act of casting goods from a vessel or aircraft to lighten or stabilize it), or natural disasters, just to name a few of the concerns.
There are four main types of intermediary: agents, wholesalers, distributors, and retailers. Agents, or brokers, are individuals or companies that act as an extension of the manufacturing company whose main job is to represent the producer to the final user in selling a product.
Wholesalers, on the other hand, take title to the goods and services that they serve as intermediaries for. They are independently owned and own the products that they sell as well. They buy merchandise in bulk and store the products in their own warehouses until the time comes to resell them to other intermediaries.
A distributor will usually align him or herself to complementary products and therefore can maintain a closer relationship with their suppliers, while retailers, both mom and pop stores, along with large chains like Target and Walgreens, purchase products from market intermediaries and sell them directly to the end user for a profit.
When a loss occurs, whether due to intermediaries who cannot deliver on time, or experience issues or incidents that result in a loss of cargo, marine cargo claims will often be the result. Its important to have insurance for supply chain intermediaries to help cover any losses.
Regardless of whether you’re in charge of the safe travel of products by truck, rail, air or sea, contingent cargo insurance protects you in the event that your customer experiences a loss through a variety of potential exposures. Your clients come to you because they trust that you’ll have their best interests in mind when it comes to providing your services. Therefore, they expect to be protected in the event of any type of mishap. You demonstrate that you appreciate their trust by carrying cargo insurance specifically designed to provide reliable, comprehensive coverage to the logistics industry.
Manufacturers know that cargo insurance is vital when it comes to moving their valuable products and machinery from one destination to another. But without sufficient coverage, you could be leaving them with lost or damaged goods and little or no compensation. The key to solving many of the common problems that accompany transporting cargo and precious freight is to know what those problems are and how to avoid them.
Common issues with the transportation of goods
Whether you arrange for the transportation of goods across the US or around the globe, there is always a possibility, no matter how slight, that the product will not make it to its destination or may end up being damaged in transit. Thefts and other causes of loss, including accidents and sinking ships can wreak havoc to your bottom line.
In order to protect your profit from these losses, a customized cargo insurance program is essential. For anyone that owns, manages or operates any of the businesses in the segments below, before embarking on any journey, research commercial cargo insurance that deals with the needs and concerns of:
- Transportation brokers
- Freight forwarders
- Importers and exporters, and
- Logistics providers
Contingent cargo insurance has two objectives: it protects your assets and your business reputation, and it enhances and protects your relationship with customers. Also, if you’re working with a broker, it’s important to note that, even though the broker may hold a contingency cargo liability policy, he or she doesn’t have an insurable interest in your cargo and therefore cannot be issued an actual insurance policy under most state laws. You should speak to a reputable agent who can help you to determine your particular needs.
The days when goods were available only to select markets are no more; no matter what it is or where it is manufactured, most any item can be shipped from anywhere to anywhere–for a price, of course. Keeping costs down is always a concern of any shipper. Just as important, though, is getting protection for the shipment, because anything can happen in transit. A good cargo insurance quote can help offer peace of mind, especially when you consider the following:
Stuff happens when you least expect it
While it’s true that the transit industry transports goods more safely and efficiently today than ever before, there remain many ways and opportunities for items to get damaged along the way.
Damaged goods are your headache
If you are the shipper or consignee, damaged goods are likely your responsibility to deal with, particularly with regard to international shipping, where liability laws tend to favor the carrier rather than the shipper (in order to promote international trade). Reduce the risk of broken or otherwise damaged goods by packing securely, and work with your insurance agent to ensure you have the right coverage so you’re not left holding the bag. Getting expert guidance here is key, because this type of policy often does not have rigid guidelines on requirements; all-risk policies are available (however, some exclusions may apply) and can typically be tailored to meet your specific needs, shielding you from the risks that you are most likely to face.
Ensuring you have the right coverage
As your agent will emphasize, it is critical that you be the picture of transparency when it comes to disclosing to your insurance company the details concerning your shipment–everything from type of item to be shipped, its worth, the method of conveyance, and any other important details that could have an impact on the degree of risk that the provider would assess, or the amount of the cargo insurance quote you receive.
Work with an experienced professional insurance agent to help ensure that your goods get to their destination and all along the way are protected in the event of the unexpected.
Why do you need cargo insurance in Florida? Many reasons, if yours is one of the estimated five or six million containers that are in motion across the ocean right now, and you are interested in protecting the goods, freight, or merchandise contained in the shipment from various types of damage or loss that can occur at any moment from the point of departure to delivery. Coverage can include foreign and domestic protection for a variety of risks, including theft, spoilage, actions taken by foreign regulators and customs officials, and more–for example, infestation.
The bugaboo of shippers worldwide
Infestation of cargo can occur when a number of issues are present, such as:
- High moisture levels
- Location of stored goods prior to shipment
- Poor sanitation and storage methods of the goods
- Residue from previous shipments left in the containers
- Use of untreated packing materials
To combat pests, fumigation may be needed
Usually a gas containing methyl bromide and phosphine, fumigation is an effective means of pest control. It is used to eradicate pests which can multiply and damage or destroy a shipment completely by the time it reaches its destination. In fact, industry experts say fumigation is the most effective way to get rid of pests because the nature of gas is to diffuse and spread into every nook and cranny of a space, unlike spraying operations or other kinds of pest control that have a limited reach. A common practice, the process helps block the entry of exotic pests and diseases into the country, yet allows for the shipment to be cleared fairly quickly thereafter.
When to do it
Fumigation is most efficient and least expensive when it is handled at the port where the shipment is loaded. Upon reaching its destination, the container can be unloaded at the discharge port without fear of having unwittingly transported insects or parasites to the destination.
Talk to a professional insurance agent about cargo insurance in Miami. Your agent can give you excellent guidance about top-rated providers, policies, and also offer you practical information about how to get your shipment to its destination in good shape with the requisite paperwork to eliminate or minimize any costly delays in customs inspections. Call your agent today to learn more.