One of the dirty little secrets that your freight broker may not reveal is that in negotiating the low prices they offer, many times the brokers give the carriers low liability limits in the event of loss or damage.
For example, an LTL carrier’s tariff might say that they will only be responsible for a valuation that corresponds to the class of the freight as billed. This is important. Here’s why:
You ship a pallet of plastic articles at Class 250. Normally the carrier will have liability, for example, of $20 per pound. HOWEVER, you or your 3PL has negotiated an FAK 100 so your class 250 articles ship at Class 100 – its a huge discount. That $20 per pound valuation can suddenly turn into $4-5 per pound. If its a volume rate it could be $1-$2 per pound. We’ve even seen pallet rates at $0.50 per pound!
So should you insure? It depends on the value of your shipment and your tolerance for filing freight claims.
Give your Fenichey rep a call to discuss. We’ll be happy to provide a full coverage, low deductible insurance certificate if necessary.