Although rare, for some shipments, theft, loss or damage can occur and for those affected, it can have a huge impact on profitability if sufficient insurance cover is not in place.
According to the World Shipping Council (WSC), an average of 1,582 containers are lost overboard at sea every year. Given that more than 120 million containers are shipped annually, the risk of your goods being affected is low, but why take the chance that they won’t be amongst those containers?
And it’s not just sea freight shipments that you need to consider.
Theft of goods within the supply chain is reportedly on the increase. The Transport Asset Protection Programme (TAPA) recorded 2,611 reported crimes across EMEA (Europe, Middle East and Asia) in 2016, with nearly 90% of these being from trucks. Whilst our AEO accreditation is recognition that Velta supply chain services are deemed secure, ensuring that you have the relevant insurance in place adds the additional safeguard that, should you be in the unlikely position that you fall victim to thieves, your insurance company will provide cover.
Indeed, the most common claims are for damaged goods. Damage of goods in transit can be caused by a variety of elements including weather, shock, compression and damp from moisture or humidity. Proper packaging solutions can help to prevent damage but it is impossible to completely alleviate the risk that something may happen to your goods. Making certain appropriate insurance cover is in place offers you reassurance that you won’t find yourself out of pocket should you face the misfortune of being presented with part of full damage of a consignment.
So when importing and exporting goods, ensuring that there is sufficient insurance in place to cover the cost of the goods gives you peace of mind should anything unexpected happen. As they say, it’s better to be safe than sorry!
A common misconception amongst importers and exporters is that, should they be faced with the scenario of lost, stolen or damaged goods within the supply chain, that the carrier will be responsible for the financial reimbursement of any losses.The truth is, contracts with carriers, including shipping companies, air freight operators, rail operators, road hauliers and freight forwarders are subject to limited liability. The element of cover offered within these contractswill be insufficient to cover the value of the goods being transported. This means additional insurance cover is required to ensure you are able to retrieve the full value should the worst happen.
Whether the seller or buyer is responsible for insurance is a matter that needs to be decided between both parties at the outset of the contract, this should then be incorporated within the ‘Terms of Sale’.
Although it is advisable to undertake sales negotiations using ‘Incoterms’ which outline the responsibilities of the parties involved in the contract, the insurance provision under CIP (cost insurance paid) and CIF (cost, insurance and freight) will be set to the shipper or sellers valuation, which may not be sufficient to the buyers requirements, meaning additional insurance may be required.
For further advice or to arrange insurance of your goods, please do not hesitate to contact us.