Cargo Insurance | AllGreen Supply Chain

Shipping High Street Value Commodities can be Risky Business

Robert Kostelny — Thu, 22 Aug 2019 16:39:02 +0000

Shipping High Commodities

In 2018, a little over 293 million Samsung smartphones were shipped while Apple was not far behind with approximately 212 million of its smartphones distributed across the globe. These tech industry giants seem to have mastered shipping high street value commodities, which is not an easy accomplishment today. However, the category of high risk commodities encompasses many types of merchandise, from everyday items, such as smartphones, televisions and refrigerators, to one-of-a-kind artwork, fine wines and pricey watches. These products are not only expensive, but also often fragile in nature; therefore, further complicating the shipping process. There are shippers who specifically cater to transporting exclusive items, such as antiques, while many other shipping companies deal with the bulk of items classified as high street value commodities.

Threats

High street value commodities are particularly susceptible to risks. Many of these threats have existed for years while others have come into play more recently. Below are two major threats that shippers are concerned about today:

Piracy

Piracy has been around for centuries, and in recent years it has staged a comeback. Ships traveling through the waters around Asia and West Africa have experienced the largest number of pirate attacks. However, not only are ocean carriers impacted by piracy, but also air freight companies experience this same issue, which is called air piracy.

Cyber-Attacks

Cyber-attacks are the newest form of piracy that is hitting ocean and air freight carriers. Today’s cargo ships and aircraft are more connected than ever because of new IoT (Internet of Things) applications. However, this enhanced connectivity has made it possible for hackers to re-route shipping vessels, resulting in changes in delivery times and locations of containers. Sophisticated cyber-attacks are the second major risk for airlines. Only natural disasters surpass it to top the list. These types of attacks can interfere with aircraft systems, (in flight or on the ground), control the airplanes, and even ground entire fleets.

Packaging

When shipping high street value merchandise, packaging is particularly critical not only to ensure its good condition, but also to help protect it against the types of threats mentioned above. Labeling is a crucial aspect of packaging. According to transportation consultant, Jeremy Carley, “When transporting high street value commodities, many companies, such as Apple, conceal the contents of their packages. This is particularly critical when crossing the belts and delivering these valuable items.”

Since many products are shipped overseas, crating and binding merchandise on a pallet is important. Technology products, such as televisions, have many components inside. The tiniest bit of jostling during transit could prevent it from working.

RFID – Radio Frequency Identification, plays a critical role in the packaging of high street value commodities. In particular, larger carriers are utilizing this technology. By incorporating RFID tags into shipping container pallets, or other reusable assets, shippers have immediate, real-time information regarding not only a product’s location, but also its quantity, history and destination. Not only are logistics simplified, but the safety of the shipment is further enhanced.

Adequate Insurance Coverage

With high risk commodities, it is particularly important to select the right type of insurance company and coverage. Just like specialized shippers, there are insurers that deal specifically with high risk commodities. It is key to select a rated A insurance carrier. And, in terms of coverage, consider an all-risk policy, which ensures there are no gaps in insurance. Also, full replacement value on a high risk shipment should be taken into account. This is especially important if you are using one of the major shippers, such as FedEx or UPS, because the maximum declared value per package is $50,000.

Worried about Shipping High Risk Commodities?

When managed properly, shipping high risk commodities should not keep you up at night. As a 3^rd party logistics company, AllGreen, has the proven track record and professional experience to help ensure your high street value items are shipped correctly. Our team has worked for national shipping carriers; therefore, we created a solution that takes care of any gaps in coverage. Plus, our policy underwriter is rated A++ by A.M. Best, making it at the top of its class.

For further information about our services, contact us today at info@ag-sc.com or 847-531-2209.

The post Shipping High Street Value Commodities can be Risky Business first appeared on AllGreen Supply Chain.

The Ins and Outs of Declared Value

Robert Kostelny — Wed, 07 Aug 2019 13:31:08 +0000

The Ins and Outs of Declared Value

Shipping is big business. In fact, just UPS, FedEx and USPS (United States Postal Service) combined shipped over 16 billion packages in 2017. When shipping a package, the term, declared value, is commonly used. Often, senders mistakenly think declared value and shipping insurance are the same thing. However, this is quite a misconception. It is key to understand the definition of declared value and how to overcome coverage gaps to ensure your shipping needs are adequately met.

The Definition of Declared Value

Declared value is optional coverage businesses can place on a specific shipment in the event of loss, damage or theft due to carrier negligence. The level of protection is based on that stated value. However, as mentioned above, declared value is not insurance; therefore, there is no guarantee you will receive funds if something does happen to your goods. To be clear, declared value does not cover Acts of God, War or Terrorism.

Coverage Hurdles

If your package is not delivered in good shape or is not delivered at all, an investigation will occur based on the declared value. However, there are many hurdles that must be overcome before any funds are sent to you. The largest hurdle entails packaging. It is critical to ship any items in the prescribed and tested packaging offered by the shipper. Even if you pack an item in a shipper’s package, it is best to take it to a shipper’s facility and have it tested prior to shipping. This will help ensure maximum reimbursement in the event of an investigation.

Claim approval for damaged packages is very low. If a package is stolen, there are many hurdles that you must go through to prove the theft happened. However, claim approval is a little higher than for damaged packages. When a package is classified as lost, claim approval is even better. If you do receive funds for the package and it is found within three to six months, the package will be shipped to you and the carrier will request the money be returned to them. However, this does not apply to perishable items.

Alternatives to Declared Value

If you have a business that ships packages frequently, it is critical to consider alternatives to declared value. Below are four shipment insurance options:

Packaging Insurance

The first option is transit insurance offered through a packaging insurance company. Typically, a business client pays an annual premium that is based on their history loss for the previous three to five years. If there are any losses, the types of claims will be taken into account. Next, the insurance provider will consider the packaging that is used and the type of merchandise that is being covered. There are various freight alternatives, ranging from air and ocean to LTL (less than truckload), small package and cargo.

General Liability Insurance

A general liability insurance policy can incorporate transit insurance too. This type of insurance is typically for ocean or air freight. It usually covers a large value, but also comes with a big deductible, which can be as high as ten thousand dollars.

Transit Insurance

Transit insurance is provided by a third-party company outside of the types of policies mentioned above. The previous two options may be more cost effective because transit insurance is just one component of the policy.

According to transportation consultant, Jeremy Carley, “Transit insurance companies such as UPS Capital, bring their own set of merits. For example, when working with other types of insurers, they first must rely on the approval process of the carrier before they can approve a claim for their client. Transit insurance companies can bypass this step.”

Self-Insure

The last option is to self-insure, which many companies are now implementing. “Companies conduct an analysis and put aside into a reserve an amount that is equal to merchandise that gets lost, damaged or stolen in the course of a year. These companies then pay themselves when merchandise falls into one of these three categories,” explained Jeremy.

We can Help You Navigate the Shipping Maze

Declared value is just a small component of today’s complicated shipping industry. It is key to consider the alternatives to declared value and implement the solution that best suits your business. As a 3^rd party logistics company, AllGreen, can help you navigate the complexities of insuring your goods.

If you’re ready to discuss the best approach for insuring your goods, contact us at info@ag-sc.com or 847-531-2209.

The post The Ins and Outs of Declared Value first appeared on AllGreen Supply Chain.

Why Ocean Containers Get Lost at Sea?

Robert Kostelny — Wed, 27 Jul 2016 21:15:03 +0000

Why Containers Get Lost at Sea?

The post Why Ocean Containers Get Lost at Sea? first appeared on AllGreen Supply Chain.