The current low-risk transportation landscape prevents profit maximization for many companies seeking to gain an advantage. It makes sense that shipping high-value merchandise generates more revenue, but the risks involved often keep carriers and brokers away from transporting these loads to locations around the Mexican border, creating problems for all parties. stakeholders in these regions.
Trucks massively transport the majority of high-value products such as electronics, motor vehicles, pharmaceuticals, gasoline and machinery; 47.6% of North America’s cross-border road freight includes computers and parts, electrical machinery, vehicles and parts, making these high-value goods estimated at $ 29.1 billion a prime target for the market. flight.
In addition to the threat of hijackings and other violent crimes, gaps in insurance coverage have also dissuaded many logistics providers from bidding for these loads. But the tide is turning in favor of carriers and owners of goods.
Mark Vickers, executive vice president of international logistics at Reliance Partners, recognized a trend among brokers and motor carriers to win new, higher-margin business on high-value domestic and cross-border freight. He attributes this increased confidence to Reliance Partners’ global insurance solutions.
“Over the past three years, Borderless Coverage, powered by the freight brokers and motor carrier customers of Reliance Partners, aspired for an insurance solution that would allow them to continue to offer competitive prices while providing them with insurance. all risk on higher margins, enjoy the domestic and cross border freight they want to be able to transport, ”said Vickers. “The obvious reason for these demands is due to the higher margin opportunities for brokers and carriers.”
A one-size-fits-all solution for these staples sounds too good to be true, but Borderless Coverage’s shipper interest program is just that.
High value domestic and international shipments are excellent candidates for shipper interest freight insurance because coverage is broad and can be used for all goods, even the most expensive shipments.
This relatively inexpensive coverage, which can be obtained per load, per project or on an annual basis, provides an unparalleled level of flexibility for the transportation industry, handling claims in the United States and Mexico.
Typical insurance solutions in the Mexican market are pale compared to solutions from Reliance Partners, as policyholders only pay up to $ 1,000 in deductibles compared to the $ 20,000 many are subject to. Additionally, the limits are set at $ 1 million per shipment, but can be increased up to $ 10 million with an additional subscription. The shipper’s interest also allows shipments to be multimodal and goods involving multiple carriers to be transhipped at the border.
It goes without saying that transport south of the border poses security concerns, but many are unaware of the other risks associated with cross-border trade. Vickers told FreightWaves in a previous article that shippers often have the impression that a $ 100,000 carrier’s cargo insurance policy extends across the border and that carriers will also be liable under Mexican law for lost or damaged goods, but this is often not the case. In addition, Mexico requires carriers to be responsible for only 7 cents for each pound carried.
The shipper’s interest transfers all risk from the owner of the cargo to the insurance company, unlike traditional third-party insurance which leaves carriers liable for any damage or loss incurred. This first party coverage minimizes coverage gaps and ensures that cargo owners will be reimbursed for losses in transit.
“This is a true national and international freight insurance product that brokers and carriers are now using to earn the highest margin freight and strengthen ties with their current customer base,” said Vickers.
Click for more FreightWaves content by Jack Glenn.
More from Reliance Partners:
Above-average hurricane season near peak months
Security control: better to be proactive than reactive
Cross-border counseling helps manage the ups and downs of the USMCA