Cargo insurance

RAMCO insures its cargo in accordance with the specifics of the delivery and legal regulations, and offers consultations on preferrable insurance methods.

In accordance with existing conventions regulating freight and government legislation, the liability of freight forwarders during transportation is limited. This means that, in the case of loss, the forwarder does not cover the full value of the cargo, but only the amount set in conventions and law. When transporting valuable cargo, the owner must evaluate the risk of damage, theft and other incidents, and must decide whether to fully insure their cargo.

In international freight conventions, freight forwarders are liable for the following:

Land freight liability is 8.33 SDR per kg of cargo.
Sea freight liability is 2 SDR per kg of cargo.
Air freight liability is 19 SDR per kg of cargo.

SDR are Special Drawing Rights, and 1 SDR is ~1.19185 EUR. The up-to-date SDR value can be found on the IMF website.

Land freight example: for international land freight, forwarder liability is set at 8.33 SDR per kg of cargo. The CMR convention states that, in case of accident, the forwarder is liable for a maximum of ~9.9 EUR per kilogram of cargo being transported.

A more detailed land freight example: 100 mobile phones are transported from Germany to Latvia in accordance with the CMR convention. The invoice covering the cargo values it at 20,000 EUR. At the same time, 100 mobile phones weigh just 17 kilograms. In case of theft, the forwarder is liable for loss of goods to the following amount: 17kg x 8.33 SDR = 168.3 EUR.

To avoid risk, RAMCO suggests that its clients fully insure their cargo, using one of two insurance methods:

Annual insurance.
This insurance is given based on the value of cargo transported over one year. The insurance policy is issued once and covers the risk of loss for all deliveries within that year. This insurance is suitable for those transporting goods regularly.

Single consignment insurance.
This policy is issued for a specific delivery, insuring the goods based on the value of the invoice covering the cargo. This insurance is suitable for those not transporting goods regularly.