Why LTL shippers need additional insurance coverage

Claims are a common source of frustration for most regular less-than-truckload shippers. Due to LTL carrier limitations and exclusions, shippers with damaged cargo often recover from $5 per pound down to as little as 10 cents per pound and are left without any viable avenue to recoup their losses.  

The nature of LTL makes preventing cargo damage difficult. Shipments are touched and transferred between trailers via forklift often, creating the potential for mishaps at every turn. 

“[Shippers] need an understanding of how often the freight is moving on and off a trailer. If you don’t have your freight protected appropriately, you’re opening yourself up to issues,” according to Molly Mangan, senior vice president of sales at Echo Global Logistics. “In defense of the carriers, they’re not necessarily doing anything wrong. The normal rigors of transportation can often lead to claims.”

Each time a shipment goes through a terminal, the potential for cargo damage grows. This is an unavoidable part of less-than-truckload transportation, and it is the reason LTL carriers are so methodical in their approach to covering freight. 

The limitations on a carrier’s liability for cargo, referred to as released values, are established in the service agreement and exist to protect carriers from the financial burden associated with covering damaged freight. Released values are typically on a per-pound limit of liability, so even when a carrier accepts liability for a claim, the shipper will not receive the full value of the damaged goods.

That is where EchoInsure+ comes into play. 

EchoInsure+ provides LTL shippers with an extra layer of cargo protection, allowing them to receive compensation for lost and damaged shipments beyond what released values cover.

With EchoInsure+, shippers pay a small fee to access full value coverage on every shipment. This is starkly different from the limited carrier liability most shippers have experienced in the past. Additionally, EchoInsure+ provides up to $10,000 in coverage with no deductible. 

By opting into this coverage option, shippers also enjoy a quicker, less complicated claims process. While shippers still have to file a formal claim, there is less paperwork and substantially less wait time involved.

“With full shipper insurance, all we really need to know to substantiate [the claim] is what happend and the value of the goods,” Mangan said.

According to Mangan, most claims are paid within 10 days, and some claims are paid in as few as 48 hours. This means shippers get their money back faster, reducing the toll that lost revenue can have on a business.

For shippers that use EchoShip, it is easy to automatically opt into EchoInsure+ during the quoting process. For others, an Echo representative can easily add the coverage to shipments.

At the end of the day, additional coverage like that offered through EchoInsure+ is one of the most surefire ways LTL shippers can protect their bottom lines. Not only does it provide shippers with peace of mind, it shortens the window between losing money and getting it back. This can make all the difference in today’s market.

“EchoInsure+ is an easy way to get an extra layer of freight protection,” Mangan reiterated.

Click here to learn more about Echo Global Logistics.

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Source: freightwaves - Why LTL shippers need additional insurance coverage
Editor: Ashley Coker Prince