How do I insure my cargo/freight?

In transit cargo insurance is something that not all shippers / consignees consider. You can these days insure your goods for a relatively low fee for the duration of their transit meaning that you can recover the bulk of your expenditure if anything does go wrong on route.

There are a few questions that we usually hear from clients regarding insuring their cargo. Hopefully the below will be of assistance.

Q: Can I insure my goods for part of the journey and my supplier / buyer cover the rest?

A: No! If this were to be allowed then there would be too many disputes between insurance companies as to where damage / loss happened and who is responsible for paying out. Always insure goods from warehouse country of origin to warehouse country of destination. Your insurance company should be happy to do this.

Q: What are my goods insured against?

A: Insurance policies will vary on exactly what they cover, however if you take out goods in transit insurance  you will usually be covered for loss and damage. A claim for damage can be affected if goods are not packed suitably for the method of transport, so always make sure that your packers comply with industry standards. If a container is swept overboard, vessel sinks, aircraft crashes your goods should be covered. If your goods are dropped or damaged during loading your goods should be covered. However if your goods are affected by rust or mechanical derangement then you may find that this is not covered in your policy. Always check the terms / small print or ask the insurer / agent if unclear.

Q: How much should I insure my goods for?

A: Any payment of a successful claim will be subject to the insurance company substantiating the value of the goods. So if you insure for way over real the value of the goods you may find that the pay out of a successful claim will be for considerably less money. As a general rule it is considered prudent to insure your goods for the price that you pay to the supplier (if you are the supplier the price you sell goods for), plus the shipping costs + 10%. As in many cases damage will only be noticed after final delivery you need to make sure you are covered for the shipping costs  / duties etc. which you can not otherwise claim back.

Q: When should I insure my goods?

A: Always try and insure your goods once sale of goods is completed and schedule for shipment is known. This means that in event of a cancelled order you wont have to cancel insurance etc. and also that you will have sufficient information for the insurers to complete Insurance Certificates etc.

Some insurers will allow for goods to be insured once conveyance has departed but it is pertinent not to take this for granted and to get everything in order prior to vessel / flight departure where possible.

Q: How can I insure my goods?

Your insurance company may offer Goods In Transit Insurance on a case by case or blanket policy. At Mannson Freight Services we can offer you door to door insurance between most areas globally. Please contact us via www.mannson.com for more information....

How Do I Ship My Goods - What are Incoterms?

Making your first booking to ship goods from overseas can be very daunting. It isn't surprising the number of people trading internationally that do not know the basic meaning  of Incoterms. Incoterms are a set of international terms of sale that all shippers and consignees should be aware of. If you know what the term you are buying under means you will also know what else you will be responsible for in terms of transport costs, and will be able to avoid any nasty surprises. We are seeing an increasing number of people getting caught out by this, being told a value of their shipping and not being aware of costs at the other end. As a importer, you have a right to be able to arrange your own shipping of the goods.

The most common terms and their meanings are listed below...

CIF / C&F

Under the terms (CIF - Cost, Insurance, Freight) and (C&F - Cost and Freight) the shipper will be responsible for paying freight and charges up to an agreed point. For example if you are shipping goods from China to Belgium you may agree with your supplier your purchase goods under Incoterm "CIF Antwerp". In this case the supplier will nominate their own carrier and will ship goods to arrival Antwerp port. Supplier will include costs to get goods to Antwerp in his price to you under this term. If "CIF Antwerp" then supplier should also include cargo insurance (this should always be on door to door basis).

The tricky element of purchasing under CIF / C&F terms these days is that when goods arrive at destination port you have no idea what the carriers destination charges will be, and nowadays they can be much higher than the freight cost etc. We would always advise you when getting a CIF / C&F price for your goods to also press supplier to check with carrier and advise what the corresponding destination charges will be.

FOB

FOB means "Free on Board", which is to say that if you purchase from your supplier under this Incoterm your supplier will pay all charges at origin to the carrier. You will be responsible for paying the freight element (port to port or airport to airport), and the destination charges.

Why do business FOB? How do I organise my own shipment?

Due to the above mentioned problems with CIF / C&F terms FOB has become increasingly popular The main reason is that it is not open ended. You pay the supplier an FOB price in which they include the price for the product plus origin charges, then you pay the carrier a set price from port / airport of loading to your door. The only charges that are not covered are usually duties, taxes and any form of customs intervention which as the importer of the goods you should be aware of anyway.

With FOB you also nominate the carrier that the supplier uses giving you control over your shipping. 

Ex Works

Ex works is as it sounds a price that the supplier will give for products only, meaning that you will pay the full cost of shipping the goods from the factory at origin to your door. The down side of this Incoterm is that on every occasion your nominated carrier / freight forwarder will have to revert to their origin partners for clarification of local charges for your specific order. This can often cause a delay of 1-2 days while you wait for a price to approve prior to arranging shipment. Remember with FOB your suppliers price already includes local charges at origin and your carrier / freight forwarder  should be able to quote you a price from FOB to your door (port to door) straight away.

There are more terms of sale (Incoterms) out there, above are just the main three in use today. For a more complete listing please feel free to visit our website www.mannson.com and go to the resource centre where you will find "A rough guide to Incoterms".

Bills of Lading, Telex Releases, Sea Waybill - What are the differences?

Bills of lading, we have been using these documents for sea freight shipping for over 100 years and they are a legal document and title documents to ownership of goods in transit. However there are other options available and this can cause some confusion. Hopefully this brief explanation of the difference between original bills of lading, telex release bills of lading and sea waybills will give you more of an insight into the advantages and disadvantages of each document and allow you to make a more informed choice in the future.

What Are Original Negotiable Bills Of Lading?

With original bills of lading there will be a stipulated number of original bills of lading issued which should be stamped and signed by the carrier and show the laden on board date for your shipment.

The holder of the original bills of lading has legal title to the goods and therefore controls the release of said goods. 

Without at least one original bill of lading correctly endorsed by parties shown on the bill of lading and handed to the carrier at destination the goods will not be released to the consignee.

This serves as protection for the shipper at port of loading who can proceed with shipment knowing that he will be able to hold onto the original bills of lading and therefore the goods until he has received payment from the consignee at port of destination.

What To Do If The Shipper Sends You ALL The Original Bills of Lading?

If the shipper sends you all original bills of lading then make sure that you only send one to the carrier at port of destination (duly endorsed).

One original bill of lading and payment of any outstanding local charges to the carrier should be enough to gain release of your cargo, however if you send all originals and they are lost in the post / courier you and your supplier may need to complete indemnities and have them counter signed by your banks so that the carrier can discharge responsibility if they release the goods without any original bills of lading.

Telex Release Bills Of Lading

The term "Telex Release" may be slightly antiquated these day's, but for some reason it stuck.

This machine was the prequal to faxes and emails and I guess was the first automated delivery method for advising of a surrendered bill of lading so the phrase "Telex Release" was coined back in the day and has never changed.

All that "Telex Release" means is that your supplier has received original bills of lading form the carrier and as opposed to sending originals to you he has returned them to the carrier (endorsed) and asked them to make bill of lading "telex release".

You now do not need to present any original bills of lading at destination to get release of your goods. 

Payment of any outstanding local charges to the carrier should suffice. Important to note that if supplier is asking for a telex release to be issued he must return all the original bilsl of lading that carrier issued and not only one, this is so that there are no original bills of lading in circulation which may create issues if there is also a telex release.

Also worth noting that nowadays many carriers charge a fee for issuing a "Telex Release". These fees vary from carrier to carrier but in China for example is usually between US$ 50.00 - 75.00 at the time of publishing this blog.

What is a Sea Waybill?

For two parties who are conducting regular Intl business together and have credit line in place etc. the Sea Waybill would be obvious choice, A Sew Waybill is a non-negotiable document and is issued by the carrier without any originals. This means that the supplier does not have to arrange or pay for a telex release or send original bills of lading forward by courier and the consignee does not need to worry about presenting endorsed original bills of lading to the carrier at destination.

For a sea waybill to be issued the carrier may impose certain conditions such as the shipper . consignee having a valid credit line with the carrier and the completion of an indemnity.

If you need any further advice or assistance please contact us via our website www.mannson.com .

Port of Felixstowe Tour

I have always resisted the urge to visit ports or to go aboard one of the mega container vessels that navigate our seas these days. Somewhat arrogantly I always thought that my trade is to load mixed containers, negotiate rates for full containers and air freight and that by visiting a port or a vessel I would be no more ready to ply my trade or to improve the knowledge that I can pass on to my customers. How wrong could I be!

I recently visited the port of Felixstowe in Suffolk, UK at the request of one of our clients using our LCL import services from China. I made the arrangements with Evergreen Shipping Lines and the Port of Felixstowe, both of whom were very helpful.

The day started with a visit to our Felixstowe warehouse, the ever reliable drizzle falling down from on high did little to stir the sinew and get me ready for a day of looking at containers, cartons and ships... The guy's in the warehouse were doing a great job and everything was dry, clean and working like a well oiled machine as usual. We then took a trip to that old Felixstowe favourite, "The Ferry Boat Inn", for some triple cooked chips and a piece of fish more akin to a particular Herman Melville novel than a light lunch. Fed and watered we were ready to head for the largest container port in the UK and third largest in Europe, still I was not feeling butterflies in my belly or daydreaming of captaining a vessel on the high sea's.

On arrival at Felixstowe port we were met by the delightful Debbie Coe who took us to a conference room for refreshments, a short film and an informative tutorial on the Port of Felixstowe computer system which tracks every movement of each container, where each commercial driver and straddle carrier driver are in the dock, which job they are on now and next etc. etc.  This was very big brother, but a thoroughly impressive and useful tool nonetheless. If it could make a good cuppa and rustle up a couple of Jammy Dodgers it would be the near perfect companion for a dock worker.

Next Debbie swung into action and whisked us all off around the terminals of Trinity and Languard. The sheer scale of the operation and the vessels in dock is mind boggling. When I started in this industry some 25 years ago the largest class vessels were carrying up to 4500 TEU's (Twenty foot equivalent units), these are now dwarfed by the current range of 14,000 - 22,000 TEU vessels that dock at the port of Felixstowe on a daily basis. For the port to keep up with the growing scale of these monstrous vessels they are constantly having to invest in new dock side cranes and infrastructure.

We also toured the X-ray park where Customs scan containers pulled for examination at their own leisure and the rail terminal which was complete with a very modern sliding turntable to take an engine from one track to another without having to move further along the sidings. The reason for this addition to the rail terminal was that due to a preservation order the port were not able to extend the tracks. All very impressive and ecologically friendly I am sure you will agree.

All present noticed a few damaged containers that had been pulled aside for insurance assessments, 36 in total. This may at first seem alarming, however when you consider the many thousands of containers in the port and the two very heavy storms over the prevailing weeks it seems more palatable. Also when we all moan regarding port closures due to high winds we need to remember one thing. These containers were all blown off the top of land side stacks. They were all in stacks no more than four high and locked together with the twist locks provided, so all procedure had been followed. When a commercial driver calls at the port to collect a container the port will sen the driver to the stack where the container is sitting and a straddle carrier will meet him there and lift the container onto his / her vehicle. If the dock is open and operating in high winds then how many of these 36 containers may have fallen onto a vehicle / driver who was waiting below? This is something that I had never considered before my visit to the port and immediately made me accept the closures at the port when the wind reaches a high and sustained level.

Our visit was completed with some photo opportunities, a great cup of strong coffee complete with biscuits and a goody bag from the lovely Debbie.

My company, "Mannson Freight Services Limited" bring in 85% of our shipping via the port of Felixstowe and after my visit to this incredibly impressive facility I can say that our freight is in safe hands, and I was glad that I had seen the workings of this mega port and taken some inspiration from it. My eyes are now much more open and bring on the next port tour, wherever it may be!