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Freight Forwarders and Hauliers

Published: 30/06/14

Zurich – an insurer partner provides advice for importers and exporters on choosing the right haulier or freight forwarder.

If you wanted to send a Rolex watch from the UK to the US you wouldn’t just entrust the job to some stranger. This, essentially, is how importers and exporters should view their goods when they are weighing up which haulier or freight forwarder to use, according to Brendan McCarthy, Zurich’s UK Marine Development Manager.

Cargo fraud can be a problem, especially when goods are moved internationally, and it is also important that any freight forwarder entrusted with goods has the relevant experience and correct equipment to move the shipment. The fine print of a carrier’s contract, chiefly around sub-contracting, should be scrutinised.

“It’s just like when you move house; background checks, references and customer testimonials are all essential when picking a freight forwarder,” said Brendan.

Importance of packing

Goods are vulnerable to damage when they move along the supply chain and much of the damage generally occurs as a result of the cargo being dropped when it is loaded or unloaded.

Road traffic accidents or a stormy sea voyage can also cause breakages, which emphasises why goods should be packed in a professional manner and, if appropriate, instructions given on how to handle the shipment.

But even then, there is only so much control an importer or exporter can have in the process.

“If we assume that our client has manufactured something in the UK and wants to send it abroad to a customer in San Francisco, they would firstly need a UK courier to take it to the port via professional packers,” said Mike Hall, Marine Cargo Business Manager at Zurich.

“It then goes by sea to the eastern seaboard of the US, before going by rail or truck across the US to get to its final destination of San Francisco. “However, our client doesn’t have control over the land transit in the US at all. Their freight forwarders will have arranged for the goods to be taken on.”

Value of insurance

That is why one of the most dangerous things an importer or exporter can do is fail to properly insure their goods in transit. Firms should never assume that another party has made the necessary insurance arrangements.

Most people in the supply chain who facilitate the movement of goods operate under conditions limiting their liability in cases of loss, damage or delay.

“With cargo insurance, you should never rely on anyone else and always insure the goods yourself,” said Brendan.

“Freight forwarders’ trading conditions will almost always limit their liability to a monetary value per tonne and they can give various defences such as they weren’t negligent, acted prudently and they did everything a professional haulier would do if something happened completely out their control, so they are not liable.”

Theft is also an issue, especially for high-value commodities. In the last decade, Zurich has seen the value of theft related cargo claims increase from an average of $5,000 to $1 million.

A marine cargo policy is there to protect companies against physical loss or damage to their goods during the ordinary course of transit by land, sea and air. We have access to insurers that can put together bespoke policies for cargo owners, such as for frozen foods and high limits for goods that attract thieves.

Finally, it must be noted that arranging insurance for cargo doesn’t mean that firms can then neglect their normal duty of care regarding its transportation. Goods must still be packed safely and securely.

Top tips for moving goods

• When selecting a freight forwarder, check the company website. Conduct background checks, gather references and source customer testimonials.

• Pick up the phone and insist you speak to the haulier on a landline.

• Make sure the haulier has a business email, not a generic one such as Gmail or Hotmail.

• Once you commit to a freight forwarder, get the registration details of the vehicle and name of the driver before they pick up the cargo.

• All collections should be pre-alerted and any discrepancy in the driver name and plate or trailer number should be immediately reported.

• Make sure you get the ID of the driver, with a photo.

• Watch out for sub-contracting.

• Check VAT numbers and company registration numbers.

• Make sure they are members of bona fide international trade bodies, such as the UK Road Haulage Association, the British International Freight Association or the International Federation of Freight Forwarders Associations.

If you would like to talk to us about marine cargo or goods in transit cover please speak to Dawn Charlesworth on 0845 371 1452 or email: dawncharlesworth@flintinsurance.co.uk

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