Do you need insurance when shipping to Mexico?
Young entrepreneurs consider the option of having a logistics business, because they are aware that shipping companies are quite successful. A logistics business is a company that stores and delivers goods from other firms. The manager of the company is the one who decides if the company will ship products nationally or internationally. It is advisable to specialise in importing and exporting goods in and out of the country, because it will bring your business more income. In order for the business to be successful, it should have various means of freight transportation. In order to succeed in this industry, you need to be patient, persistent and to have a plan. The greatest challenge shipping companies face is coordinating the inventory, warehousing and the security requirements of their partners. Logistics companies need to collaborate with other firms in order to have shipments.
Logistics companies expose themselves to great financial loss, and the best way to protect yourself from this case is to have cargo insurance. Why do you need cargo insurance? Well, first because you are running a logistics company that is shipping goods in Mexico. You expose yourself to risk daily, when you import and export goods. If this reason is not enough for you, then below are some others. Make sure to read them before deciding to skip this from your business plan.
Cargo theft cases are happening often
Studies show that the cases of cargo theft are in a great rise lately. One of the major problems people face nowadays is identity theft. Identity theft can affect your business, because people with mischievous intentions can get involved in fictitious pickups. Another case of cargo theft implies counting piracy. These cases are happening quite often when shipping companies are delivering goods internationally.
Insurance experts state that they have seen countless cases of cargoes being stolen from the drivers on the road to Mexico. Cargo theft is one of the main factors that should make you consider the option of getting insurance for all your shipments.
Containers are lost at sea regularly
Shipping companies state that every year they experience cases of containers lost at sea. Nowadays, logistics companies have to consider the option to ship at sea if they want to deliver to Mexico. If you want to collaborate with companies that need to transport a huge number of goods, and they have to ship them to Mexico, then having your own megaships can be highly profitable for you. But this action comes with great risks. Statistics show that around 800 containers are lost at sea every year. You can count on your luck, or you can have an insurance. Do not put your business at risk, because this type of incident can be catastrophic even for a well-established business. If you are running a start-up, you have two options, you either collaborate with companies that do not need overseas shipping, or you get insurance for all your shipments.
Cargoes get damaged
It is something common a cargo to get damaged during transportation. These situations are even more common than the ones when shipments are lost at sea, or they are stolen. Statistics say that there are numerous factors why shipments get damaged or deteriorated. In 30% of the cases the damage a cargo experiences is physical, in 15% of the situations the temperatures are the ones that create damage. Also, there are situations when containers are lost overboard, or they get infested. These situations are quite often and there are so many factors that cause them, you should not risk the success of your firm. One way to prevent these situations is to collaborate only with reliable warehouses. When you run a logistics firm that is shipping internationally, you will have to collaborate with warehouse providers worldwide. Make sure you check the facilities and safety options they offer, when you choose the Mexico warehousing option.
Companies require you to have an insurance when transporting their goods
Your partners will definitely want to know that you have insurance for the shipments you make. When choosing a logistics company to import or export goods from Mexico for them, the first factor they check is insurance. Having an insurance guarantees them that they can recover their money in case of an incident. An insurance does not protect only your business, but also theirs. When you will sign contracts with partners make sure that you read carefully all their stipulations, because you do not want to get involved in an unfavourable situation.
The cases of non-compliance with the terms of the contracts you sign are catastrophic for your business. You can experience great financial loss and even legal issues.
Catastrophic events can happen daily
When shipping internationally, cargoes cross the territory of multiple countries. This means that they are exposed to numerous weather conditions, and as you already know, the weather is unpredictable. Other catastrophic events can include, explosions, shipwrecks and pirate attacks. Catastrophic events caused the loss of around 3000 containers last year. One famous case is the one from the Tianjin explosions in China. Pirates have taken all the containers.
You decide what the insurance policy terms are
When you choose an insurance policy it is important for you to decide the terms, because it is essential they to be favourable for you. There are numerous options when it comes to insurance policies, because providers are aware that different logistics companies have different requirements. Make sure that you are satisfied with the limits, terms and valuation established by your provider. Do not leave the insurance up to your partners, because they will choose one that is favourable for them. In this situation, you are at the risk of not being properly protected, and this can be dangerous for your business. In case you collaborate with Mexican businesses, it is advisable the insurance to be translated, because the terms can differ and they need to know exactly what cases are covered.
Keep in mind that your partners count on you to ship their good at the destination, so in case an incident happens, you can use the insurance to cover the losses.