18 Nov

Cargo Insurance: LTL vs Truckload

Each time you send off a new truckload shipment, you trust the carrier to get your product from point A to point B seamlessly. But, that’s not always the case. In fact, about $1 billion of damage loss occurs every year in the United States alone. This damage can often result in delayed timelines, upset customers and a hurt reputation.

It is because of this potential damage that protecting your product is so important. Most companies know they need cargo insurance, but don’t really know which type is needed and what is covered under each. As a trusted advisor to our clients, Ground Force helps to guide the companies with work with towards the right type of insurance so they can rest assured that their cargo is in good hands – and, is completely protected in case of any issues!

What is cargo insurance?
Cargo insurance is a policy that covers product loss due to accidents, “Acts of God” (natural disasters), unattended vehicles, theft, or loss from a delay in transit. It typically only covers product while it is in transit, in the case of trucking, on the road. For more protection, shippers can use additional insurance to cover their product while in different stages and for different transit options.

For now, we will breakdown the difference between LTL Cargo Insurance and Truckload Cargo Insurance.

What is LTL Cargo Insurance?
LTL means “less than truckload.” It is a shipment that is usually combined with other shipments to fill a semi-trailer truck. The truck typically makes multiple stops along the route to pick up other cargo and then stops at a terminal, where the entire trailer is unloaded so that the cargo can be loaded onto different trailers that will be routed in the direction of the deliveries.   Because of this, these types of shipments may be loaded and unloaded several times. This leads to more handling and can often result in a part of a shipment being damaged or lost. This is a major reason why shippers want to get the right insurance in place.

LTL freight insurance is typically provided on a per pound basis since it does not fill an entire truck. A key part of LTL insurance is the National Motor Freight Classification (NMFC) number. This number is a combination of a shipment’s density, stowability, ease of handling, and liability. It determines the rate that is charged for shipping and the amount of insurance that is included for that specific shipment. This generalized insurance value is another major reason to look into the insurance needs of each shipment, as many LTL shipments do not come with proper coverage should there be substantial loss or damage before delivery.

What is Truckload Cargo Insurance?
Truckload cargo is just that, a semi-trailer truck full of product. Unlike LTL cargo, this product is the only product on the truck. The truck can go straight to its destination without stopping for more cargo. This reduces the amount of handling the product goes through and thus less opportunity for damage than LTL shipping. Although this type of shipment may only be loaded and unloaded once, upon pickup and delivery respectively, there is still a chance of transit damaged freight from natural disasters, a theft, or a delay in transit since it’ll be traveling on ground by truck. Make sure you insure as much as you can!

The rate of insurance for truckload shipments is not on a per pound basis; however, the industry-standard coverage limit is $100,000. Many companies carry a higher limit, but often, a shipper must declare a value before the cargo is tendered to be covered.    This is an important item to note as many shippers see a limit on a trucker’s insurance certificate and believe they are covered to the amount listed on that document.  That can be a costly mistake.

Why You Need An Expert
Although we’re not an insurance company, Ground Force offers both LTL and truckload services, along with several other modes of transportation, so making sure your items are protected is a priority for us.

In addition to assisting our clients in choosing the right carrier to better eliminate the chance of damage or a claim, we work to ensure our clients’ cargo is protected with the right coverage for their specific needs. In the case there are any unforeseen or unfortunate events, our team can provide extra coverage, assist with the claims process, and work to resolve all disputes should any arise.

Contact us today to schedule your next shipment!

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