The Importance of Cargo Insurance or Shipping Insurance for International Freight

Updated on November 08, 2022

cargo and shipping insurance

For international shippers, recent upticks in shipping delays have caused headaches beyond long delivery times. Days-long waits outside of ports can mean spoilage of food and agricultural products, as well as extended exposure to the elements. A snail's pace supply chain, paired with the unpredictability of ocean shipping, has many international shippers and freight forwarders reconsidering the importance of good, reliable ocean freight insurance.

In 2021, the Bureau of Transportation Statistics released a staggering report: in 2017, at the end of a five-year analysis period, the bureau found that $19 trillion in goods were moved along U.S. transportation networks alone. Broken down into days, the impact of this annual value becomes clear: “The annual numbers mean that on average 54 million tons of goods valued at $52 billion a day moved throughout the country on all transportation modes.” As we near the end of another five-year period, logistics experts predict that this number has only continued to grow.

In other words, having good ocean freight insurance is often the difference between whether a multi-billion dollar industry investment is protected or not. In a time of logistical uncertainty, the risks of operating without ocean freight insurance are too hazardous for almost any business. By considering the importance of ocean cargo insurance, shippers can better understand that planning for the inevitable isn't an option but a necessity in today's competitive logistics marketplace.

What Is Ocean Shipping Insurance?

Before understanding the benefits of ocean freight insurance, businesses need to understand what ocean freight insurance is. Ocean freight insurance, also known as marine cargo insurance, ocean shipping insurance, sea cargo insurance, or sea freight insurance, refers to a wide range of insurance policies and plans designed to protect shippers from the inevitable. Whether weather damage or theft, ocean cargo insurance can provide the coverage shippers need to face logistics disruptions whenever and wherever they arise.

However, the coverage provided by a sea cargo insurance policy can differ significantly between providers. Regardless of the provider, the cost to add insurance for individual shipments usually ranges between 1.5–4% of the item value. Generally, this rate is subject to change based on the type of freight insured and the shipment method. Depending on the ocean freight insurance policy a shipper selects, they'll receive a smaller or larger compensation package when accidents inevitably occur. By investing in an extensive ocean cargo insurance policy, shippers can avoid the massive expenses of lost cargo, regardless of the claim size.

In an unpredictable post-COVID-19 trade environment, accidents are inevitable. Staffing shortages can gum up ports, and unpredictable scheduling can result in spoiled goods and missed deliveries. Ocean freight insurance, in short, is a way for shippers to protect themselves from these inevitable, costly logistical hiccups.

Types of Insurance Coverage Seen With Freight Transport

There’s no one-size-fits-all logistics, so why should shippers settle for one-size-fits-all ocean freight insurance? Through careful consideration of the different types of sea freight insurance policies, businesses can choose a policy that reflects both their logistics needs and the changing rules of an evolving logistics landscape.

 

How Shipping Insurance Protects Shippers and Customers

Ocean shippers are facing a costlier, more uncertain logistics environment than ever. However, with ocean freight insurance, they don't have to face it alone. Facing massive ocean crossings and sky-high fuel prices, ocean shippers must consider the key benefits of ocean cargo insurance.

Find the Best Ocean Cargo Insurance For Optimal Protection

Optimal protection means insurance against the inevitable. For shippers handling sensitive items or working in fast-paced shipping seasons, ocean cargo insurance provides the security customers want and the security shippers need.

Protect Your Cargo With the Right Marine Cargo Insurance With FreightMango Today!

Without marine cargo insurance, shippers are vulnerable to being blind-sided by inevitable logistics mixups. In worst-case scenarios, these mixups can quickly turn into bottom-line busting disasters, resulting in lengthy litigation and bankruptcy. Luckily, ocean freight insurance can protect businesses from the inevitable and ensure smooth sailing through even the roughest logistical waters.

By bookingwith FreightMango, the first-ever full-service freight marketplace, businesses can find the ocean freight solutions they need such as ocean freight insurance, to survive and thrive, regardless of what an unpredictable logistics environment brings. Get started with FreightMango, and see what simplified shipping can do for your business.

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