I was asked by multiple clients in the past month ,” Why do you always ask for the value of my shipment? Is it really that important.” The answer is an astounding YES this is extremely important. Asking for the value of a shipment should be as natural as asking what the commodity that is being shipped by a freight broker. It is part of the 4 Golden Rules of a Freight Broker :
Rule #1: A good freight broker/ freight consultant makes sure that your freight is always insured and moving with a carrier that has sufficient liability coverage.
Many people are given false pretense or not given the details of a carrier’s liability coverage. Here are some truths:
1. All carriers do not have the same liability coverage regardless if the shipment is volume or LTL
2. LTL carrier’s liability coverage is not one flat rate per lb. It can range anywhere from $0.50lb – $25lb depending on the carrier.
3. Some LTL carrier’s liability coverage is based on density and the lower the density the lower the coverage.
4. Just because a volume carrier’s liability is $ 750,000- $100,000 does not mean that your entire shipment is covered. Coverage for volume shipments is determine by how much space the shipment is taking up.
Matt briefly touched up on this subject in a previous blog and I want to end with his advice:
– If when you ask for a freight quote from your current freight broker or carrier and they do not ask you for a value for your shipping property and give you a price instead, then this is a definite red flag. This broker is only concerned with selling price, and not service. Each carrier has specific Liability coverage that depends on factors such as: class, value, commodity etc…The only time this may be negated is if you have a good broker that knows your products well and already knows what the value of each shipment is and chooses a carrier with correct liability.
***Suggestion: If possible always supply your freight broker a value of the shipment, and if you do not know what the value of the shipment ask your broker what is the coverage for this carrier.