When moving goods, whether within your state or across the country, you face significant risks, particularly concerning the cargo you transport. Cargo damage, theft, or loss during transit can result in costly claims against your trucking company.
According to Overhaul Risk Advisory Services, in 2023, there were 1,183 reports of cargo thefts, each averaging a loss of $586,917, for a total of $694,327,811 in stolen goods. The average loss per theft in 2023 represents a 67% increase over the average of $351,556 in 2022, with expectations that the cost per loss will rise again this year.
Most thefts are by organized professionals with electronics the most stolen item.
Following are several strategies to employ to mitigate the risk of cargo theft:
- Use contractual agreements to limit liability: You can use bill of lading agreements and other contracts to limit your liability for cargo. A bill of lading is a legal document between the shipper and the carrier that outlines the shipment details. It can include terms that limit the trucker’s liability for certain kinds of damage or set a maximum dollar amount for any loss. In addition, work with your shippers to negotiate terms that limit your responsibility for specific circumstances or types of cargo, especially high-value goods.
- Purchase insurance protection: Cargo insurance protects you from your responsibility as the transporter in the event of damaged or lost freight. The policy is purchased with a maximum load limit per vehicle. Under-insuring the load can prove catastrophic to you in the event of a claim. Make sure you understand the concept of co-insurance.
- Implement proper handling and documentation procedures: Employ best practices in the handling and documentation of cargo. Ensure all drivers follow industry standards for securing and transporting goods, such as using proper tie-downs, pallets, and protective packaging. Failure to take these steps can lead to negligence claims, making it difficult for truckers to limit liability. Also, document the condition of the cargo before and after transport. Taking photographs and obtaining written acknowledgments from the shipper can be evidence if a dispute arises.
- Communicate and collaborate with your shippers: Maintain open lines of communication with shippers, clearly outlining expectations, discussing potential risks, and agreeing on protective measures upfront. This will help reduce the chances of disputes over damaged or lost cargo. Immediately notify the shipper if issues arise during transport, such as delays, accidents, or adverse conditions. By communicating immediately, you further demonstrate you are acting in good faith and following proper protocols.
About Western Truck Insurance Services
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