How unrecovered cargo claims impact the stakeholders?

Unrecovered cargo claims pose a significant threat to the financial well-being of everyone involved in the global supply chain – exporters, freight forwarders, and even marine insurance companies alike. When cargo is lost or damaged during transport, the responsible party is obligated to compensate the owner for the full value. Unfortunately, many claims go unrecovered, leaving all parties to absorb the losses.

Just take a look at the image above. In a recent Recoupex study conducted, respondents have been asked the question: How much is cargo damage costing your business annually? 35% has answered they lose 0 to 10,000 USD; 39% answered they lose 10,000 to 50,000 USD; and 26% lose more than 50,000 USD in a year, alone! The truth is, no matter how small your loss is, it is still a loss and will hurt your bottom line. 

What is the impact of unrecovered cargo claims on each stakeholder?

• Cargo Exporters: Unrecovered claims translate to a direct financial blow. Exporters rely on successful deliveries to maintain operations. Lost or damaged cargo means lost revenue, reduced profits, and potential reputational damage.
• Freight Forwarders: As the party arranging transportation, freight forwarders can be held liable for unrecovered claims. This can lead to significant financial losses if exporters pursue compensation. Or even a loss of clientele if clients seek alternative providers.
• Marine Insurance Companies: Unrecovered claims can force insurers to cover losses, impacting their bottom line through increased premiums and reduced profitability. Poor claim recovery directly affects underwriting decisions and makes customer retention more challenging.

The Path to Loss Prevention

The good news is that proactive measures can significantly reduce the impact of unrecovered claims. Here’s how all parties can benefit:

• Preventative Measures: Implementing effective loss prevention strategies is crucial. This might involve proper packaging, clear documentation, and choosing reliable carriers.
• Claim Recovery Experts: Consulting specialists like Recoupex can help navigate the complexities of claim filing and recovery, maximizing the chances of a successful outcome. We understand your business is complicated enough, when you partner with experts like Recoupex, we take the stress of the cargo claims and you can focus on running your business.
• Internal Systems: Establishing in-house systems to track and manage claims efficiently can minimize losses and streamline the recovery process.

You can turn the tides and instead of an annual loss report, why not an annual increase in revenue? It’s a much better option. Exporters, freight forwarders, marine insurers, you don’t have to be absorbing these losses. Let Recoupex help you get the compensation you deserve!