Freight damage and loss is a reality of shipping. It’s not a matter of if it will happen to you; it’s a matter of when. When damage or loss occurs, your first thought is often, “how will I be compensated?” To answer the question, you need to understand the difference between carrier liability and freight insurance.

Carrier Liability

Every freight shipment is covered by some form of liability coverage, determined by the carrier. The amount of coverage is based on the commodity type or freight class of the goods being shipped and covers up to a certain dollar amount per pound of freight. 

In some cases, the carrier liability coverage may be less than the actual value of the freight. It’s common to see liability restricted to $0.25 per lb. or less for LTL or $100,000 for a full truckload. Also, if your goods are used, the liability value per pound will be significantly less than the liability value per pound of new goods. Liability policies can vary, so it’s very important to know the carrier’s liability for freight loss and how much is covered before you arrange your freight shipment.

Freight damage and loss is a headache. In order to receive compensation, a shipper must file a claim proving the carrier is at fault for the damaged or lost freight. Carrier liability limitations include instances where damage is due to acts of God (weather related causes) or acts of the shipper (the freight was packaged or loaded improperly). In these cases, the carrier is not at fault. Additionally, if damage is not noted on the delivery receipt, carriers will attempt to deny liability. 

If the carrier accepts the claim evidence provided by the shipping customer, then they will pay for the cost of repair (if applicable) or manufacturing cost, not the retail sell price. The carrier may also pay a partial claim with an explanation as to why they are not 100% liable. The carrier will try to decrease their cost for the claim as much as possible.   

Freight Insurance

Freight insurance (sometimes called cargo insurance or goods in transit insurance) does not require you to prove that the carrier was at fault for damage or loss, just that damage or loss occurred. Freight insurance is a good way to protect your customers and your business from loss or damage to your freight while in transit. There is an extra charge of course, and it is typically based on the declared value of the goods being shipped. Most freight insurance plans are provided by third-party insurers.

As mentioned earlier, your freight might have a higher value than what is covered by carrier liability, such as shipping used goods. Another example is very heavy items. Carrier liability may only pay $0.25 per pound for textbooks that have a much higher value. This is a great example of when freight insurance is extremely helpful in the event of damage or loss.

Carrier Liability vs. Freight Insurance in the Claims Process

If your freight is only covered by carrier liability coverage:

·         Your claim must be filed within 9 months of delivery

·         The delivery receipt must include notice of damage

·         Proof of value and proof of loss is required

·         The carrier has 30 days to acknowledge your claim and must respond within 120 days

·         Carrier negligence must be proven

If your shipment is covered by freight insurance:

·         Proof of value and proof of loss is required

·         Claims are typically paid within 30 days

·         You are not required to prove carrier negligence

Deciding which option is best for your shipment

Anything that comes at an added cost needs to be evaluated critically and freight insurance is no different. There are a few things to consider as you weigh the potential cost and risk of damage and loss versus the cost and benefit of insurance. You'll need to think about the commodities you're shipping, how time critical your shipment is, and if you'd be able to weather the financial burden that comes with a denied or delayed claim payout. 

Understanding your carrier's liability coverage and knowing the ins and outs of freight insurance can be tricky. If you have questions like “how much does freight insurance cost?” or “what does freight insurance cover?” the team at PartnerShip can help. 

Let's face it: ship happens. Even though many shippers prepare for the worst and do their very best to protect their freight, loss and damage are an unfortunate reality of the business. Freight insurance is a vital tool that business owners can use to offset the costs of freight damage and limited carrier liability. Unfortunately for many shippers, freight insurance coverage can be complicated to understand and is often misunderstood. How do you know if you should be using freight insurance?

First and foremost, it is important to understand the difference between freight insurance and carrier liability. Carrier liability is an industry term used to describe the responsibility of the carrier as it relates to losses, damages, and delivery delays to compensate the shipper. Of course, exceptions are put in place by the carrier, such as whether the damage or loss is a result from the action of a shipper (ex. improper packaging), an act of God, public authority, or due to the inherent nature of the goods.

It is the responsibility of the shipper to prove that the damage or loss of their shipment is a direct result of the carrier's own negligence. To accomplish this, it is important to take pictures of your packaged freight before the pick-up is completed, and inspected thoroughly once it is delivered. Any damage or loss MUST be noted on the delivery receipt. If your shipment does not encounter any issues, it is important to properly follow the claim filing process within 9 months of the delivery date. You have even less time with a concealed claim. At 5 days max, it is extra crucial to get the process moving along promptly.

But here's the thing about carrier liability: even if you can win a claim against the carrier, the payout often doesn't cover the total cost or value of your freight shipment. Every carrier has an established payout amount, usually per pound and depending on the fright class and limit of liability. Additionally, there are many exceptions and limitations as well as restricted types of freight that are compensated for even less, such as some electronics, artwork, and furniture types. The good news? Freight insurance does not require the shipper to prove that the carrier was at fault for the damage or loss, simply that the damage occurred. It's a great way to protect you and your customers and to be sure your shipment can be covered for its full value. Freight insurance is often offered by third-party insurers at a fee on top of your carrier rate for transit. So how do you know if it's worth the extra cost?

Fragile Shipments

If you are shipping products that are fragile and may break easily, it's a good idea to seek out additional freight coverage. Most carriers have their best interest in mind, and only offer limited coverage on these types of shipments, knowing there is a higher potential that they may break in transit. So if there is damage, it's unlikely you will get the full value of what has been lost. Proper packaging can help mitigate the likeliness that damage may occur, but the loading and unloading process doesn't always go as planned. Damage can occur at pick-up and destination delivery, as well as the many times your freight may be loaded at various terminals throughout transit. There are carriers who specialize in the transport of fragile shipments, commonly referred to as white glove service providers, but this alternative can be costly and still may have limited coverage. Freight coverage purchased through an insurance provider is typically based on the declared value of your freight and can help give shippers peace of mind.

High Value Freight

Similar to those who ship fragile products, businesses who are transporting high-value goods need to be mindful of how much coverage they receive through limited carrier liability. Just because your shipment isn't particularly breakable, doesn't mean your freight is protected in the event that it can go missing or may be delayed. While unlikely, it's always a good idea to have a plan that will cover your back, and your bottom line. Carriers typically pay out by the pound. For example, it's not uncommon to see a pay out of $0.25 per lb or even less on restricted items for less-than-truckload, with a max cap of $100,000 per truckload. With many types of freight insurance coverage through different providers, the total value of the shipment is covered, despite whether the carrier accepts responsibility or not. Of course, it's always crucial that shippers are diligent and fully understand the terms of their third-party insurance coverage, no matter which provider they go with.

Inbound Shipments

Another important consideration for businesses concerns their supply order or inbound shipments. Typically, a vendor will determine this portion of the shipping process- choosing carrier, service type, and rate. Taking control of your inbound shipping is crucial, both in reducing costs and selecting the carrier that best suits your needs. But, apart from that, how can you better protect your inbound shipments against damage during transit, especially when as the receiver, you aren't even there to check on proper packaging and material handling? Enrolling in an inbound freight insurance coverage plan can help mitigate the cost of damage and help business owners take back control on their inbound freight.

It's safe to say that if you are shipping high value freight, fragile products, or receive inbound shipments, it is crucial to take a look at supplemental freight insurance options. At PartnerShip, we want to offer better coverage than the typical limited liability offered by the carrier because "one size fits all" just doesn't cut it. The shipping experts at PartnerShip can help you decrease your risk and increase your peace of mind. Contact us at 800-599-2902 or email sales@PartnerShip.com for more information about freight insurance, or get a quote today.

Halloween season is here! As pumpkins are being carved and candy bowls set out, it’s also just the right time to discuss some scary mistakes made by shippers. Let’s take a look at the top 5 errors commonly made in freight shipping, so we can be sure your fall business is full of treats, not tricks!

Mistake #1: Improperly Packaging Your Shipment
The first mistake freight shippers make happens even before a pick-up is scheduled and the load is in transit! Packaging your product critically protects from damages both during the move and unloading at multiple terminals. Whether you are shipping in boxes or on a pallet, it’s important that both are sized just right, and in solid condition. In fact, a box can lose up to 50% of its structural integrity after a single shipment. Too much space can allow your product to shift, which can increase opportunity for damage. Use proper cushioning and foam inserts, as well as exterior wrapping especially if you have multiple pieces. Be smart, try to group multiple units into a single load so they do not get separated during the move.

Mistake #2: Bill of Lading (BOL) Errors
Another scary shipping mistake concerns paperwork errors. These include details such as entered weight, freight class, and shipping addresses provided on the BOL. All three are elements that help determine a freight rate for your shipment. Any errors made on these factors will most likely cause a discrepancy and an increase in rate due to re-weigh fees, adjusted classes, and re-delivery charges if an address is invalid or incorrect. Holding a shipment at a terminal for any length of time while determining the appropriate address can incur holding fees as well. Often, shippers will intentionally use a lower class than what is accurate for their shipment, hoping to slide by inspection. If flagged, the shipment will be billed at the higher actual class, and the shipper will be responsible for the difference. Guessing approximations for weight is risky too, because if the discrepancy is caught, the shipper will pay a re-weigh fee and the difference in weight. Having accurate details on your shipping paperwork is key in avoiding unplanned shipping costs.

Mistake #3: Forgoing Additional Insurance Coverage 
A third scary shipping mistake refers to insurance and liability. This becomes extremely important in the unfortunate case that your shipment should become lost or damaged. Each carrier offers limited liability on freight shipments, with the amount of coverage set at a fixed dollar amount per pound of freight determined by carrier and commodity. It is the responsibility of the shipper to prove that the shipment was in good condition and packaged correctly at pick-up. The carrier will then attempt to prove that it was not negligent or responsible for the damages incurred in transit. The final approval or denial of the claim can take some time, and you cannot always count on getting damages paid out, no matter how thorough you are. Your best line of defense is looking into supplementary insurance. Freight insurance acquired on your own or through your shipping partner provides more protection than relying on the carrier alone. Even if you do win a claim and get paid out by the carrier, liability may be limited, and you may not get the full amount of your claim. Purchasing additional insurance can help, and it’s important to understand your policy before you ship. PartnerShip understands you need peace of mind, and we offer supplementary freight insurance at a minimal additional cost as an option on all freight quotes.

Mistake #4: Choosing the Incorrect Service/Accessorials
Most carriers offer different time-sensitive service levels depending on the urgency of your freight shipment. Expedited, guaranteed, time-critical, and truckload are a few. Guaranteed services help you stick to a delivery schedule with a specified on-time delivery, by either 12 PM or 5 PM. Expedited and Time-Critical services offer faster transit times and a more urgent delivery. All of these services tend to be costly, so it is important to determine what your transit time needs are, well in advance. Delivery schedules can be delayed due to inclement weather, missed pick-ups, and a heavier shipping season. Building extra time into a delivery deadline can help avoid unnecessary expedited costs that add up, especially as we head into the holidays.

Another common error that shippers make is neglecting to add-in the cost of additional services, or accessorials, when they get their freight quotes. Be mindful of what is needed at the shipment's origin or destination. Does the shipper need a lift-gate at pick up? Do they have a dock? Is it being delivered to a residential location, or at a school or construction site? Chances are, there's a fee for that. It's important to learn everything you can about pick-up and delivery services that may be required, and inform your carrier or service provider before you get a rate for your freight.

Mistake #5: Leaving Inbound Shipping to Vendors
A final, costly error that many shippers make is leaving inbound shipping decisions completely up to their vendors. Commonly, businesses may allow the vendor shipping your order to arrange with their own carrier choice, marking the freight charges as "Prepaid," and then including those charges in your invoice. Taking control of your inbound shipping is one of the easiest ways to cut your shipping expenses, and working with a 3PL such as PartnerShip is one way to make sure you are saving on your inbound freight.

At PartnerShip, we can provide an inbound shipping analysis by looking at what you pay and whether we can save money on your shipping costs. Our team can contact your vendors on your behalf, create updated routing requests, and inform them of your specific shipping instructions. We offer consolidated invoicing and audit all of your inbound freight bills for accuracy. Think you might be able to save on your outbound shipment? We've got your back on those, too.

Keeping your shipping costs low and your freight safe may seem intimidating, but it doesn't have to be scary. When you work with PartnerShip, our shipping experts will double check shipment details, compare your pricing, and make sure you are covered from pick-up to delivery. Take your freight shipping from spooky to stress-free and contact us for a free shipping analysis!

The LTL shipping industry has been reducing its shipment liability to the point where recovery for lost or damaged freight is pennies on the dollar. As recently as 15 years ago, carriers agreed to be liable for the full cost of any freight lost or damaged. But as their insurance costs increased, carriers began decreasing their liability to keep costs low. Today, it’s common to see liability restricted to $0.25 per lb. or even less.

In our relentless effort to help customers ship smarter and stay competitive, PartnerShip is now offering freight insurance. We’ve teamed up with Roanoke Trade (a division of Roanoke Insurance Group, Inc.) to offer coverage to shippers against physical loss or damage, providing them a better option than relying solely on a carrier’s liability coverage.

This high quality, competitively-priced and easily-managed freight insurance will pay to repair or replace the cargo regardless of if the carrier is found liable.

We’re logistics experts and our customers rely on us to help them safely and efficiently move their freight. LTL carriers want shippers to bear the risks of in-transit loss or damage, but freight insurance helps mitigate the risks inherent with the shipping process.

Benefits of freight insurance include:

·         Affordability. Minimum premiums as low as $20 per shipment

·         $0 deductible. Approved claims are paid from $1 (maximum liability of $100,000)

·         Claims typically paid within 30 days

·         Pays to repair or replace the cargo whether or not the carrier is found liable

Of course, some restrictions apply. Your PartnerShip account representative can give you a complete explanation of freight insurance from Roanoke Trade.

The shipping experts at PartnerShip are here to help you ship smarter and stay competitive. Contact us at 800-599-2902 or email sales@PartnerShip.com for more information about freight insurance.