Let us picture the following scenario. We have got one sealed cargo container filled with bottles of cooking oil. The container is cleared by the customs in Houston, Texas and is then taken over by a trucking company which delivers it to a warehouse belonging to the buyer. Upon delivery, the cargo container is no longer sealed. Moreover, it is no longer filled with bottles of cooking oil, but with something else instead. However, the bill of lading is clean. So, who is to blame for the cooking oil going missing: the shipper or the carrier? Can insurance be claimed?
For starters, we know who is not to blame and that is the shipper or the shipping line. It is not their job to make sure that the buyer receives the right cargo as per the bill of lading. This responsibility is the seller’s. The seller is the one making a commitment to sell and deliver cargo of any kind to the buyer and therefore, they are to blame for failing to deliver on their commitment.
However, the buyer can choose from a number of options when it comes to protecting their cargo against such unfortunate events. Out of these, cargo insurance stands out as the most commonly preferred solution. According to the stipulations of the Interstate Commerce Commission (ICC) with regard to the Cost, Insurance and Freight terms, the seller also claims insurance coverage for cargo that is lost or damaged during shipping. However, as per the aforementioned terms, the buyer can only be provided minimum insurance coverage. Should they opt for additional insurance coverage, they must agree with the seller on the exact insurance coverage needed. Otherwise, they can opt to handle the insurance on the cargo themselves.
Cargo insurance plays an essential role in this entire equation, providing a highly convenient solution for the buyer in the event of cargo losses or damage to the goods being shipped. Proper extra cargo insurance should enable the buyer to find solutions to these problems through the insurance company.
Many of the first-time transactions made within the shipping industry are based on trust, a sense of trust which is developed based on assessments on the seller’s credibility, on their presence and position on the market, on their reputation and other similar factors. However, it can only be relative in the context of these transactions constituting a first step in the potential development of future business partnerships between the two parties. In other words, it is possible, if not even likely, that the buyer will come to nurture some sort of doubt at some point as regards the seller. Should this be the case, it is best that they hire a surveyor or an inspector to monitor the cargo at all times between its being packed and its being sealed. Thus, the buyer can rest assured that the cargo they receive is the same as the one they have purchased and paid for.
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