Cargo Signal Blog

Reduce the Risk of Insuring Freight with Sensor-Based Logistics

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Do you have the information you need from your carrier and freight forwarding companies to accurately determine their rates? Product travels a long way–from manufacturer to warehouse, from warehouse to distribution center, to storefront and beyond. It can be difficult to get a clear picture of whether or not a company is shipping that cargo responsibly.  

If they’re being careless about the security and quality of their cargo in transit, and they’re insured by you, you could end up footing a big bill.  Recent statistics from the logistics space demonstrate just how vulnerable cargo is in transit and how costly it can be when companies don’t take the proper precautions to secure their goods: 

  • About 1 out of every 10 shipments arriving at distribution centers is reported as damaged 
  • Every year $30 billion of cargo is stolen or lost while in transit 
  • 14% of the world’s food ends up spoiled during the shipping process 
  • Companies shipping temperature-sensitive product such as pharmaceuticals lose $35 billion annually due to inadequately climate-controlled transit 

Loss control consultants do their best to determine insurance rates, but evaluating customers through questionnaires and loss histories is sometimes the only option. Not only is it tedious and time consuming, the information is often reported straight from the shipping companies and can prove to be unreliable or unrepresentative of their daily practices.  

Other insurance industries are already getting their information straight from the source. Take car insurance companies, for example. They incentivize customers to place sensors in their personal cars. When the customers do so, insurers gain insight into the real-time behaviors of those drivers and calculate their final rates from there. Don’t you deserve the same quality of data when you’re insuring companies who ship high-value freight all around the world?


Why Looking at Past Behavior May Not Be Indicative of the Future 


Even if a shipping provider has a clean and well-documented history of maintaining cargo security and quality (locking truck doors, partnering with reliable carriers, avoiding dwell times and high-risk zones, etc.) what guarantee do you have that they’ll do the same today once you’ve insured them, or tomorrow, or the next day, for that matter?  

What’s true today may not be tomorrow. What if management changes? What if new, more inexperienced teams are hired? What if all along they’ve been mishandling cargo and it just hasn’t become a problem…yet? 

There are too many variables and unknowns to account for. All it takes is one minor slip-up on behalf of the shipper you insure to cost you thousands of dollars. While it’s entirely possible that a company’s reputation is reliable and their assurances honest, there is always some amount of risk taken when you base your decision on historical precedent alone.  


The Cargo Signal Solution 


The IoT-powered sensors that Cargo Signal attaches to global freight track real-time data about shipments, providing end-to-end visibility, security, and quality control. Our technology is supported by a Command Center staffed by logistics professionals who monitor your shipments around the clock, 7 days a week, 365 days a year.  

If your freight forwarders are using Cargo Signal, you gain real-time visibility into how shipments are traveling and being handled, from origin to destination. Instead of trusting the past to indicate future behavior, requiring your shippers to place Cargo Signal on their freight lets you see straight into their daily business practices.  

If they start leaving trucks unlocked, expose temperature-sensitive freight to unfavorable climates, or move freight through high-risk zones, you’ll know, and our Command Center will intervene to solve the problem before the situation worsens and you end up taking a loss.  


Gain Actuarial and Real-time Data about the Shipping Companies You Insure 


When shippers use Cargo Signal, information about shipments is continuously collected, creating a store of historical data that tells an objective story about their security and quality control performance. When you motivate a company to use our sensors, you have continuous access to that data, enabling you to automate your loss investigations and determine their accurate insurance rates.  

Additionally, our sensors keep you informed in real time of how that company is performing, so you don’t have to continue to calculate rates based on self-reported histories alone. Cargo Signal’s customizable alerts will notify you if: 

  • Shipments are tampered with, mishandled, or experience shock and tilt  
  • Container or trailer doors are opened or closed 
  • Temperature-sensitive goods like agricultural product or pharmaceuticals fall outside acceptable ranges
  • Shipments pass through high-risk zones
  • Carriers remain stationary for prolonged times or make unauthorized stops 

This unprecedented level of oversight ensures not only that you’re delivering fair rates to your customers, it gives you real-time protection against loss. If your customer suddenly starts cutting corners and taking new risks with their freight, you’ll know about it right away. Better yet, you’ll have the actuarial data to back it up when you’re renegotiating rates.  

Getting started is easy. Once your customers place Cargo Signal’s devices on their freight, you have instant access to reliable, rich data sets about the risks they’re taking.  


Cargo Signal Can Help You: 

  • Automate the collection of historical actuarial data about companies that you insure 
  • Implement turnkey technology granting you access to real-time information about shipment location, quality, and security 
  • Limit the number of theft and damage claims and reduce proceed payouts by troubleshooting vulnerable shipments in real time before they result in a loss 
  • Back up your insurance rates with verifiable data that helps explain cost to your customers

If you want to improve your supply chain performance using sensor-based logistics, Cargo Signal is a great option. Contact a representative today and request a demo to get started. 

Download Cargo Signal's free Guide to IoT E-book here.