To most shippers, an LTL carrier’s ability or willingness to cover the value of their product in the event of loss or damage, is secondary. Secondary, that is, to cheap rates, fast transit and/or great service (most LTL carriers are geared for a combination of two out of these three). However, somewhere in the race to find a low freight class for a product and the cheaper rates that go along with it, lost is the thought of checking the carrier’s standard liability coverage for a given freight class. The truth is, the lower the freight class, the less liability coverage per pound an LTL carrier will offer, so as to offset the cheaper freight rates.
Different carriers will have different brackets, most will start coverage with a maximum of $.50-$2.00 per pound for class 50 freight, then in a graduated fashion up to a maximum of $15.00-$25.00 per pound for class 500 freight. One thing they all share is a liability coverage of $.10 per pound for used machinery and equipment and most used articles that fall in the category of “one man’s trash is another man’s treasure”.
While thought of damage or loss is not foremost when negotiating rates with LTL carriers, a point should be made to check the liability coverage of a carrier against known value of expected future freight. If the LTL carrier cannot or will not cover the value of the merchandise (though most common carriers will extend extra coverage at rather high rates), outside cargo insurance providers will step in to insure such freight. If a company routinely sends out high value freight, the best thing to do is to seek an open cargo policy with an outside insurer that will automatically cover all freight this shipper has for full value. A 3rd party logistics provider usually borrows some aspects from both worlds. As a general rule, they bear no direct liability in case of damage or loss by carrier (unless gross negligence is proven), but most are able upon request to provide cargo insurance from outside insurers, at rates lower than common carriers would offer.
To sum it up, shippers have multiple choice to make sure their freight is covered for its full value, whether it be from the carrier directly, or by undertaking and maintaining an open cargo policy themselves with outside insurers, or by going through a 3rd party logistics provider who has established relationships with outside insurers. There should be no reason why freight should travel on a wing, a prayer, and two crossed fingers.