A freight forwarder job is not just a job - it is a lifestyle.
Those who work in this industry probably know what we are talking about.
The job of a forwarder is to be on the phone all the time because unexpected incidents are the standard fare. It is constantly adapting to new requirements - evolving night and day technological progress and changing market requirements that you must keep abreast of.
It is a great commitment to problem-solving and continuous learning.
It is openness to new people, their cultures, and different personalities. It is adapting to the client in many ways.
Today, let's look at the common myths about freight forwarder insurance.
➡️ Shipping risk clause.
Often considered as a good insurance solution for freight operators.
Nothing could be more wrong!
Forwarding clauses only give a false sense of security.
In practice, only the liability insurance of the forwarder is pertinent. But it is worth taking care of the appropriate clauses in the insurance - if the freight operator becomes the contractual carrier - who undertakes to perform the transport contract. In the standard scope of that insurance policy, the forwarder's liability for acting as a contractual carrier is not covered by insurance.
➡️ If there is a provision in the agreement's title - "forwarding order" - it is precisely that.
Another mistake.
The nature of any agreement is determined by its content, purpose, and the agreed intention of the parties. Determining what kind of agreement we are dealing with requires analyzing this information and assessing it in the light of specific regulations. It means that the name of the contract (e. g. forwarding contract) does not indicate its type.
Let's look into elemental differences in agreements:
“by a freight forwarding contract, the forwarder undertakes, for remuneration, within the scope of the activities of his undertaking, to send or receive the consignment or to perform other services connected with its carriage. ”
On the other hand, “by the contract of carriage, the carrier undertakes, within the scope of its business activities, to carry people or goods for remuneration. ”
➡️ Liability insurance of the carrier is the same as cargo insurance.
We should also add this to the list of myths.
Liability insurance of the carrier does not protect the cargo in transit. The purpose of this insurance is solely to protect the carrier's liability. So - only Cargo insurance protects your shipment in domestic and international transport.
Protection includes loading, unloading and temporary storage if it is a part of transport.
In addition, it may also include the lost margin (profit) of the cargo owner (up to 10% of the shipment value) and additional costs – insurance, transport, taxes (VAT and excise) and customs duties.
➡️ If the Carrier has confirmed having a liability insurance policy (policy suitable for the Carrier), the Forwarder will not be considered guilty.
Another important non-negotiable issue.
It is within the scope of the forwarder’s obligations to check the validity of the carrier’s policy, payment, or scope. Incorrect subcontractor policy or its complete absence will be considered a fault in the selection of the forwarder. It is his competence to choose a suitable, reliable subcontractor if he improperly performs his duties - a burden may be inevitable.
What would you add to this list?
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