What Is All-Risk Coverage for Cross-Border Shipping?
Shipping across borders can be a very tricky prospect. This is especially true when companies are dealing with shipments crossing the U.S.-Mexico border. These businesses have to consider language and cultural barriers, as well as varying liability rates between the countries. All of these factors, and many others, make cross-border shipping to Mexico a sometimes daunting idea.
Luckily, with all-risk coverage, many shippers can have peace of mind that they are getting great coverage to keep their goods safe without expanding their spending.
What Is All-Risk Coverage?
All-risk coverage is insurance protection against things your contract doesn’t specifically mention.
For instance, a shipping insurance contract may not explicitly say that the company is protected in the event that lightning strikes the truck and renders it useless. But an all-risk policy would still cover this unusual event.
Along with all-risk coverage, shipping companies will often elect to employ usage-based insurance. Usage-based Insurance is a shipping insurance program that allows companies to implement flexible coverage on their cross-border shipments.
For example, a shipper might decide to purchase coverage for an individual load, an entire shipping project spanning a few loads, or in some other way.
A Few Reasons You May Want to Consider All-Risk Coverage When Shipping to Mexico
There are a few major risks to consider with regard to cross-border shipping to Mexico. Luckily, careful planning and problem-solving help mitigate many of these risks.
In both the U.S. and Mexico, cargo theft is a major problem. Thieves focus on trucks that seem like easy targets. Unfortunately, as our awareness of the problem has increased, so has the sophistication of the thieves. Cargo thieves now use high-tech equipment to take down trucks and can finish robbing a truck in a very short period of time.
Through the use of technology, shippers can mitigate this issue to a degree. A good example is the use of surveillance devices that monitor potentially significant points of entry to the cargo.
While technology can sometimes serve as a deterrent, this is not always a reliable strategy. It is best to take as many proactive measures available against issues such as cargo theft. Backing this up with all-risk coverage insurance is a wise idea.
Quality of Roads and Highways
Within Mexico, and near the Mexico-U.S. border, there are serious problems with the infrastructure of the roads and highways. These roads experience heavy daily traffic and are well-maintained. This makes shipping items by truck an arduous process, as truckers are forced to avoid numerous breaks in the road, navigate giant potholes, and deal with other over-the-road issues.
Truckers need to allow extra time for shipments and carefully plan out routes before turning onto a dangerous and poorly maintained highway during their delivery. Effective GPS systems and transportation management services come in handy for dealing with this issue, as truckers and logistics teams can get a visual of their planned route before they even begin the journey. Identifying and avoiding problem areas during transit helps trucks save time as well as wear and tear.
Issues at the Border Itself
While both the U.S. and Mexico present their own share of unique problems for shippers, the border itself can make things difficult. There are various loading companies, carriers, and other interested parties all packing in together at the border. This creates a buildup that results in shipping delays and money lost with every hour.
During this transition period, goods are at risk of theft and damages while stalled. Whether the damage comes from temperature-sensitive goods being ruined or from thieves along the road, it is a very real risk for many shipments crossing the border every day. Further, truckers at the border can expect to wait for, at minimum, a few hours for their shipment to be processed and allowed to move on to the next step. Sometimes, these wait times are much longer.
Varying Coverage Requirements
Across our two countries, the liability requirements are very different. Specifically, shippers in the United States are subject to up to $1,000,000 in protection for lost cargo. This is in stark contrast to the Mexican requirements, which require only about 2 cents per pound of cargo in liability protection.