If your business ships goods to buyers via one or multiple modes of transportation, it’s likely you’ve encountered issues with damaged or lost shipments. After all, as many as 1 in 10 shipped items are damaged in transit. Worse, half of carrier liability claims are denied and shippers recoup zero costs for lost or damaged goods.
What happens to items once you ship them is out of your control. How you insure shipments is not.
The business impact of damaged goods
The cost of damaged goods can have a ripple effect across your organization and down to your customer base.
On average, it takes two hours to file a freight claim. That’s two hours spent putting out fires instead of building business value. If you are sending a replacement, a new order must be filled, items pulled, inventory records updated, and invoice collection waived. That’s more lost productivity.
You may also need to spend time and resources to salvage, repair, or dispose of the damaged product.
Then there is the risk of reputational damage and lost business. If you fail to meet the needs of your down-chain partners, they may take their business elsewhere.
Why carrier limited liability might not cut it
By law, carriers have a minimum financial responsibility to shippers when items in their care are lost or damaged. This coverage is automatically included in shipping consignments. However, carriers only need to cover damage in certain circumstances and only for certain minimum amounts. Coverage is based on the shipping method or load weight, not the value of goods. For expensive items like machine components or medical equipment, the shipper would only be compensated for a small fraction of the actual value of lost assets.
For a claim to be approved, shippers must prove the loss was directly caused by carrier negligence. Carriers will not make any payout for Acts of God (flood, storms, earthquakes, etc.), theft, third-party reckless driving, or spoilage.
Revenue not recovered from damaged or lost goods and can jeopardize the long-term profitability of your business—and your short-term ability to cover operating expenses.
Carrier limited liability vs. shipping insurance
At Inxeption, we want to help businesses minimize shipping risks and potential business disruptions. That’s why we offer all-risk full-value shipping protection to close the gaps left by carrier limited liability.
Inxeption’s door-to-door coverage is built into our logistics service. While hopefully rare, accidents happen—-and regardless of fault, time, or location, Inxeption covers the full value of your goods and shipping costs. In the event of a shipping mishap, you can file a claim online in a few simple steps and receive a payout in 10 days or less.
After over 20 years in the financial services industry, my advice is this: If the average cost to insure an item is less than the cost of replacing lost, damaged, or stolen items, insure the item. Especially for businesses shipping high-value goods, relying on carrier limited liability is simply too risky. If 10% of shipments are damaged, how much could your organization stand to lose?
With Inxeption Shipping Protection, we offer highly competitive rates to help make your decision easy. Learn more