How are your shipments covered during transport?
If your shipments are damaged or lost during transport, who covers the loss? Many mistakenly believe that the carrier covers the full value of the shipment, but this is far from the truth, a research from Consignor shows.
In 1956 the UN formed the international CMR Convention, which deals with legal issues concerning international road transport. All European countries have adopted this legislation when it comes to international road transport.
This means that if the carrier is responsible for damaged or lost parcels during international road transport, he covers, according to the CMR Convention, up to 8.33 SDR per kg damaged or lost goods. This equates to around 9 EURO. This means, if an iPad with a value of 540 EURO, weighing 650 g, gets completely damaged during transportation, the compensation will be to: 0,650 kg x 9 = 6 EURO. The consignor’s loss will then be 534 EURO.
However, some countries have a different law, when it comes to national road transport, ie road transport within a country’s borders.
Where is the worst place to lose a parcel?
Norway, Sweden and Finland each have their own national transport legislation, which states that the carrier at national road transport covers up to 17 SDR per kg damaged or lost goods. This corresponds to about 19 EURO. The iPad will thus be covered by 13 EURO at national road transport in Norway, Sweden and Finland, and the consignor’s loss will be 527 EURO.
Denmark has no national transport legislation and Danish carriers are therefore, in fact, unlimited liable for damages or lost parcels during national road transport. Unless the carrier chooses to use the rules from NSAB2000 or the CMR Convention, in which the compensation amounts to 8.33 SDR. Not surprisingly, most Danish carriers use NSAB2000 or the CMR Convention at national road transport.
In Britain, damaged or lost goods during national road transport are according to RHA2009 covered by up to £1.3 per kg damaged or lost goods (about 1.8 EURO). This means that the iPad in Britain is covered at a record low amount of only 1 EURO, and the consignor’s loss here is the highest at 539 EURO.
Compensation at national road transport thus depends entirely on the legislation of the country, where Britain here is the biggest loser. Fortunately, companies can hedge against low compensation.
Parcel insurance saves you money
It is as a company worth considering whether you can afford possible losses from damaged or lost goods during transport, if an accident occurs.
In order not to suffer financial losses, a solution could be to insure the shipments. This can be done either through an annual agreement or on special occasions, when shipping goods of particular high value.
- SDR (Special Drawing Rights) is the International Monetary Fund’s unit of account. It is among other things used for the settlement of financial matters. SDR is based on the currencies: EURO, Japanese Yen, Pound Sterling and US dollar.
- NSAB2000 is an agreement between the Nordic Association of Freight Forwarders and national transport organizations in Denmark, Norway, Sweden and Finland. NSAB is not a legal framework but a contractual basis, as carriers may choose to follow.
- Road Haulage Association is a trade association for British road transport and freight logistics operators, and has more than 100,000 UK registered HGVs. Members of the association carry goods under Conditions of Carriage in RHA2009 for national road transport.
- Read more about on-demand parcel insurance here.
Text by: Consignor, firstname.lastname@example.org