Businesses are always trying to cut costs and save money. While there’s nothing wrong in this, sometimes, you need to let go of this philosophy in certain things.
For example, shippers may be wondering why they would need cargo insurance and decide not to go with it. This could end up being incredibly costly. Many shippers import and export goods with no cargo insurance. Many of them have also paid a huge price as a result. Here are some of the top reasons why a shipper needs to get cargo insurance.
It is rather unfortunate, but cargo theft appears to be on the rise. These criminals are getting more sophisticated. They are using identity theft and fictitious pickups, something that was rare years ago.
There is also the threat of piracy, which still happens today. It may sound like a movie script, but these are all very real and still happening in the modern world.
2. Lost Containers
There appears to be a rise in containers being lost at sea. With the unpredictable nature of the oceans, containers going overboard have increased. Catastrophic events have also occurred.
Since the turn of the century, studies have shown that containers lost at sea in the decade after 2010 have increased dramatically when compared to the decade before 2010. It would be wise to get cargo insurance.
3. Cargo Damage
Cargo damage is quite a common occurrence. It’s considered more common than theft or loss at sea. It is thought that the most common insurance claim is that of cargo damage. These include physical-and-temperature-related damage. Infestation is also another cause for cargo damage. The problem with trying to keep cargo safe is that there are so many opportunities for cargo to get damaged. Bad stowage is one reason, as is shore error.
Other reasons include overloading, condensation, ineffective sealing, poor temperature monitoring, badly distributed weight, poor ventilation, wrong container and bad packaging. These are just a few, but there are many more. So, as you can see, damage can occur from any direction. You succeed in four areas only to have another nine coming at you with a vengeance.
4. Collision Risk
Accidents happen and the ocean is no different. There is always the possibility of a collision which can result in tremendous loss. If two ships collide, imagine how much damage that could cause, not to mention the possible loss of life as well. Things like bad weather, congested shipping lanes and fog all add to the risk of a nasty collision.
Fire is another risk on cargo ships. These could be caused by any number of reasons. Some of these include smoking in forbidden areas and not disposing of butts properly, electrical damage to equipment and cables, thunderstorms and fire caused in the process of repairing something using welding.
The best advice anyone can give you is to never overlook cargo insurance. There are so many things that can go wrong. Speak to someone about your options regarding insurance. Some things may be covered while others may not. Get all the information and advice from an experienced insurance broker so you can make the best decision, otherwise, you could end up with huge losses.