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Believe it or not, product in the care of a driver does not necessarily place all liability for freight in the hands of the carrier. There are exemptions to liability within the Carmack Amendment, and even when everything is correct on paper and goes smoothly at the place of origin, Mother Nature may have other plans. Shippers need a way to mitigate risk of full truckload shipping, regardless of what promises a driver makes in casual conversation.

The Problem: Full Truckload Carries Less Risk, So Shippers Forgo Cargo Insurance

Risk exists in all transportation modes, and failure to consider risk in full truckload shipping is a poor strategy that will result in loses. Some shippers operate under assumption, but assumption will not pay for damages.

As explained by Lisa Terry via Inbound Logistics, transportation liability grew more complex with economic growth and an increasing number of contracted drivers and carriers. Under federal transportation law, and the Carmack Amendments, carriers traditionally held liability for freight until delivery, with four specific exclusions, but individual contracts may make liability unclear. Meanwhile, the Amendment and the Federal Motor Carrier Safety Administration’s (FMCSA) Compliance, Safety, Accountability (CSA) program enforcement leaves shippers and carriers dazed. As a result, shippers may assume carriers retain liability. False assumptions about outside entities also leave carriers under a false sense of protection from damage and liability.


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Outside entities are just that, outside, and they are focused on their own interests, as well as the interests of their clients. As a result, carrier contracts may carry high deductibles, limitations, or exclusions, even when carrier liability is stipulated in a contract. Therefore, shippers should review existing policy or contract liability and opt for additional cargo insurance to reduce risk, depending on freight fragility.

The Solution: Cargo Insurance Reduces Full Truckload Risk, Covering Declared Full Value

Upon review of existing policies and strategies to mitigate risk of full truckload shipping, shippers should look at all available options. This includes purchasing freight or cargo insurance.

Cargo insurance literally insures freight against damage or loss, provided such losses are within policy limits. While carriers may offer a certain amount of “given” coverage for full truckload shipments, the independent nature of full truckload opens the floodgates to risk. An overlooked detail could result in losses exceeding $100,000. Remember full truckload requires a full van or trailer, and damage to small items adds up quickly when expanded to 42,000 pounds of merchandise. Thus, shippers should consider purchasing additional cargo insurance when using full truckload.

For example, Cerasis Cargo Insurance insures freight from “warehouse to warehouse,” covering transitions between carriers, if applicable. Although most full truckload freight has a single pickup and drop point, on occasion freight may change carriers. Cargo insurance serves to reduce risk associated with such transitions and covers carrier limitations too.

The Reward: How to Optimize Use of Cargo Insurance

Cargo insurance may seem like an unneeded feature, but imagine how a sudden storm in the Midwest could popup without warning. Tornado Ally is littered with the memories of entire truckloads tossed aside like matchboxes. Even when purchasing cargo insurance, shippers should follow a few tips to help mitigate risk in transit.

  • Use an automated system to review cargo insurance offers for all shipments. Automated systems can generate immediate pricing for cargo insurance and ensure all relevant information is passed along to the driver. Having information available is crucial to preventing delays if an unforeseen events occurs.
  • Integrate cargo insurance in freight management technology. Integrating cargo insurance within freight management technology is key to making automation successful. An automated system is great, but it lacks value if not connected to the system scheduling freight for pickup. For reference, Cerasis Rater integrates cargo insurance information and processing within the system.
  • Retain cargo insurance documentation to streamline claims’ processes when needed. Sometimes, freight itself carries risk. Lithium-ion batteries have some pre-charge, and the last year bore witness to dozens, if not hundreds, of instances of poor design in electronics. An instance of overheating could result in a fire within a van, and this risk could be present when using freight consolidation with other shippers. As a result, any system used to buy cargo insurance should enable shippers to retain and access copies of documentation and claims’ information. This is also critical to maintaining compliance with international shipments, including retaining information relevant to the importer or exporter of record (IOR & EOR).

In a Nutshell

Cargo insurance must never be an afterthought. Full truckload freight can represent millions of dollars of product, and the risk, even when it is an unforeseen risk, will always be present. Shippers can mitigate risk of full truckload shipping by purchasing cargo insurance for any and all shipments. The curve ball is coming. If your organization has never lost product, nor purchased cargo insurance, it could be amazing luck. Then again, it could be your turn…