1. Insuring Against Cargo Theft

    October 19, 2009 by admin

    The problem of cargo theft is a growing one costing carriers billions of dollars each year. There are many financial problems associated with cargo theft including the loss of the trailer, the cost of stolen freight, the cost of the subsequent investigation, and the immeasurable cost of the loss of trust with a dissatisfied customer whose product or goods were stolen. Though the statistics are on the rise, there are a number of steps that you can take to prevent what could be a catastrophic loss. If you follow some simple tips you can better avoid or deter cargo theft and insure yourself adequately.

    In 1999, the Department of Transportation released the Volpe report. This report stated, among other statistics, that if both the direct and indirect costs of cargo theft were included, the losses from this crime would run between $20 and $60 billion dollars per year.  More recently, according to LoJack Supply Chain Integrity, the second quarter of 2009 showed a 300% increase in the number of thefts that occurred at carrier facilities and drop yards. Based on additional information reported to LoJack’s SCI Supply Chain Information Sharing and Analysis Center (SC-ISAC), vehicles and their cargo were stolen within 4 hours of being parked. Almost half of these stolen vehicles had only been parked for less than an hour.

    As a commercial truck driver, it is your responsibility to take the right steps to avoid theft and carry the appropriate amount of insurance to avoid huge personal losses. Following these few simple steps can be invaluable to avoiding or deterring cargo theft. When you are hauling cargo, always lock your vehicle. Be sure to use high quality locks on the trailer especially those locks that have multiple pin tumblers, dead locks, or those with interchangeable cores. Lock the power unit and remove the keys when the vehicle is left unattended. Do not discuss your freight, its value, or its destination with anyone during transport and delivery of the shipment. This practice also includes not discussing this type of information on the radio while in transit. Consider having a planned route with scheduled stops, but also varying the route or the stops so as not to establish a “routine run.” Finally, always identify your vehicle with a prominent name and identification number.

    Are you also sure that you have the appropriate insurance coverage to survive cargo theft? It is up to you to do the due diligence needed to find the right coverage. Many companies will severely limit the amount of coverage for theft. Or, they might have exclusions such as for theft when your vehicle is unattended or for unknown disappearance of cargo. You may even have limits placed on the amount an insurance company may pay for high value items such as alcohol, computers, or electronics. To obtain the best coverage, consider an insurance carrier who specializes in your business. When you negotiate a policy, require your insurance company to put all the coverage details in writing, In particular, ask the all exclusions or limits on coverage be fully detailed and explained. Ask your insurance agent to review the insurance requirements of any shipper with whom you are considering entering into a contract.

    Taking a few steps ahead of time can significantly reduce your liability and loss from cargo theft. Contact your commercial trucking insurance company for more specific information.


  2. Laws and Regulations for Truck Cargo

    September 8, 2009 by admin

    As a trucking transportation professional, knowing pertinent regulations and laws specific to transportation not only makes your trucking company successful, but gives you additional tools to choose the most appropriate truck cargo insurance. While there are many regulations that critical to your business, the most basic, yet most important is a Bill of Lading.  In addition, there are many laws that govern motor carriers. However, knowing the importance of the BMC 32 Endorsement for semi truck insurance is necessary for your success. Reliance Partners provides this information for you so that you can be better informed. We want to educate commercial trucking companies and partner with you.

    The essential components to understand about a Bill of Lading include what it is, what it entails, and how it applies to motor truck cargo. A bill of lading is a type of document that is used to acknowledge the receipt of a shipment of goods. A transportation company or carrier issues this document to a shipper. In addition to acknowledging the receipt of goods, a bill of lading indicates three things:

    •    the particular vessel on which the goods have been placed
    •    their intended destination
    •    the terms for transporting the shipment to its final destination

    The bill of lading will specify the liability of the carrier and will be obtained by a commercial insurance claims adjuster.

    There are many names given to bills of lading, but the most pertinent to the commercial cargo carrier are the inland bill of lading and the through bill of lading. An inland bill of lading is a document that identifies the agreement between the shipper and the transportation company to transport its goods. This bill of lading is necessary for the domestic transportation of goods. An inland bill of lading may by negotiable or non-negotiable. When an inland bill of lading is negotiable, the person who owns the bill has certain rights. This person has the right of ownership of the goods and the right to re-route the shipment. When an inland bill of lading is non-negotiable, the carrier is required to provide delivery only to the consignee named in the document. The other type of bill of lading, the through bill of lading, covers the specific terms agreed to by a shipper and carrier. It covers the domestic and international transporting of merchandise. The through bill of lading gives the specific details about the cost to transport between specific locations.

    The law that truck cargo carriers should be most familiar with is the BMC 32 Endorsement. This endorsement, which is a provision added to a carrier’s insurance contract, was created to protect shippers against unrecoverable transit losses that occur when shipping by way of motor carriers. According to William J. Augello, author of the book “Transportation, Logistics and the Law (www.transportlawtexts.com) and executive director of the Transportation Consumer Protection Council Inc. (www.tcpcinc.com), the BMC 32 is one of the most valuable protections that the Congress and the Interstate Commerce Commission (ICC) ever established to safeguard the shipping public. The most important features of this endorsement are:

    •    the cargo insurance coverage pertains to all losses or damage for which the carrier is liable up to certain limits without regard for any deductibles or exclusions that may be in the policy
    •    the coverage remains in effect until the insurer files a notice of cancellation or modification with the Department of Transportation’s Federal Motor Carrier Safety Administration

    Armed with this information, you improve the efficiency and success of your trucking company.