Any party shipping goods, product, or commodities by any means of transportation.
As corporate activities become increasingly globalized, the need to conduct efficient logistics operations and to comprehensively manage the logistics risks in logistics networks that span wide areas is rising. In response to these needs, increasing numbers of companies are building and operating global logistics systems that provide integrated support including export control and inventory control. The logistics insurance (such as transport insurance and marine insurance) arranged to cover logistics risks is often individually secured on the company or business unit level or on the regional or national level, and as a result, many complex administrative procedures such as providing shipping and inventory notices and issuing transport unit certificates are often required.
Marsh Japan sees insurance for corporate global logistics risks as a single item and can provide global one-stop/one-package insurance solutions that seamlessly cover all aspects from processing and storage to delivery and greatly reduce insurance procedure workloads. As a result, we can reduce complex administrative procedures and support the streamlining of logistics risk management for many Japanese companies.
By making customer logistics risk visible and adopting a logical approach to the insurance market as an insurance company broker, we seek to reduce insurance premium costs of domestic and overseas subsidiaries and affiliates. We contribute to advanced logistics risk management to cover the costs of risks that are difficult to insure (such as earthquake risks in Japan and the risks of transport stoppages), logistics accident prevention (loss prevention), and countermeasure expenses.
What are Advanced Logistics Insurance and STP?
Stock throughput (STP) insurance comprehensively covers domestic and international logistics from corporate procurement to processing, storage, and delivery. Previously, STP insurance was obtained primarily by European and American multinational companies, but recently, it is being increasingly adopted by Japanese businesses that are conducting business globally and require centralized management including overseas logistics risks conducted under the leadership of the head office.
All raw materials, semi-finished goods, products, samples, exhibit items, and so on for which companies need insurance arrangements are comprehensively covered. It is a rational insurance program that covers distribution and logistics, which are diversifying on a daily basis, as well as changes in inventory without the need, in principle, to provide notice on each occasion.
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FAQs
Cargo insurance pricing is calculated based on a valuation of the goods being transported and the perceived risk. The valuation of cargo is customizable based on the desire of the cargo owner and how it calculates values. For example, the insured value of your goods can be determined by adding the commercial invoice value of the goods (how much you are receiving in payment from your customer) to the cost of freight transport, with an additional 10% charge to cover additional expenses. Alternative valuation options are replacement cost, agreed value, and selling price.
Logistics is the arrangement and/or transportation of goods in the global supply chain. The exact insurance coverage requirements must be tailored to the activities of each operation. However, as the principal activity for logistics providers is the care, custody, and control of the goods of others, a core insurance coverage is cargo legal liability.
Logistics insurance products offer protection to any party involved in the transport, storage, or arrangement of such activities. These include trucking companies, freight forwarders, warehouse operators, non-vessel owning common carriers (NVOCC), customs brokers, and freight brokers.
This can vary greatly depending on each activity, limits, losses, contractual liability, applicable conventions, domestic or international movement of goods, and size of operation. Gross freight receipts of mileage are always used for rating purposes in conjunction with all other relevant exposure information.
A “general average” is a loss arising from the voluntary sacrifice of any part of a ship or cargo, or an expenditure to safeguard a ship and the rest of the cargo. When the vessel owner declares a general average, the vessel owner and all the cargo interests will share the expenses associated with the loss on a pro-rata basis. These expenses are typically covered under your cargo insurance policy. Such losses can be significant and may require letters of guarantee to have the cargo released. A letter of guarantee would be issued by the insurance company and is an agreement to meet an insured’s liability for contribution.