Why Cargo Insurance Matters in Global Freight Forwarding
When it comes to shipping goods internationally, cargo insurance often gets overlooked. Many importers and exporters assume their freight is covered automatically, but this is rarely the case. As a freight forwarder, Future Forwarding understands the real risks involved in moving cargo across air, sea, and road. That’s why we always recommend that our clients seriously consider cargo insurance, including for air freight and sea freight, as part of their supply chain management plan.
What is Cargo Insurance?
Cargo insurance protects your goods while they are in transit. Whether you are using air freight, sea freight, or road freight, cargo can be exposed to a wide range of risks. These include theft, damage due to handling or weather, accidents, container loss at sea, fire, and even delays that cause time-sensitive goods to spoil. Cargo insurance is your safety net, helping to reduce financial loss in case something goes wrong during freight forwarding.
Why Cargo Insurance Is Essential
When using freight forwarding, it’s important to understand that carriers have limited liability. For example, shipping lines, airlines, or trucking companies often pay compensation based on weight, not value. If you are shipping high-value goods, the standard compensation will likely fall far short of covering your actual loss. Freight forwarding with robust cargo insurance is crucial.
Imagine your container of electronics is lost during ocean transit. If the container weighs 1,000 kg and the carrier’s liability is £2 per kg, your maximum compensation is £2,000, even if the goods inside are worth £50,000. Without cargo insurance, you absorb that loss entirely.
Common Misconceptions
Some importers believe their suppliers are responsible for insurance. Others assume that their general business insurance covers goods in transit. However, in most cases, neither is true. Insurance needs to be arranged separately, and it’s best done before the shipment leaves its origin.
Another common myth is that damage or loss rarely happens. While freight forwarding is generally reliable, things can and do go wrong. Ships face rough seas, trucks can be involved in accidents, and airports can misroute or mishandle cargo. In our years of experience, even with careful planning, we’ve seen everything from water damage to stolen pallets and delayed goods due to natural disasters. Air freight, sea freight, and road freight all have risks that cargo insurance can mitigate.
Real Examples
A company shipped food products from the UK to the Middle East via air freight. A delay at the airport due to a customs hold caused the goods to spoil. Luckily, they had taken out cargo insurance that covered spoilage due to delays. The claim was processed, and the client was reimbursed quickly.
In another case, a container shipped by sea freight from the USA to South Africa was affected by a fire on board the vessel. The ship declared General Average, meaning all cargo owners had to contribute to the losses. Those who had no insurance had to pay a share out of pocket to recover their goods. Our insured client avoided these costs entirely.
How We Can Help
At Future Forwarding, we offer cargo insurance as part of our freight forwarding services. We ship globally by air freight, sea freight, and road freight, and we know the importance of protecting your cargo through every stage of the journey.
Our logistics services also include customs brokerage, warehousing, online tracking, and full supply chain management tools. We make it easy to integrate insurance with your shipping plan, helping you reduce risk and protect your bottom line with reliable insurance options for air freight and sea freight, as well as road freight.
Final Thoughts
No matter how experienced your freight forwarder is, accidents and delays are a part of global logistics. Cargo insurance is a simple, affordable way to give yourself peace of mind and avoid major financial loss.
If you are an importer or exporter and want to know more about protecting your goods in transit, speak to the team at Future Forwarding. We are here to help with everything from air freight to road freight, and offer support every step of the way. Cargo insurance is key in ensuring the protection of your shipment.
To request a quote or speak to one of our freight specialists.