U.S. Inventory Supplies Around the U.S. See Effect Due to New Tariffs
Cargo steamed into U.S. ports at a rapid rate this past June as importers stocked up inventory to stay ahead of new tariffs between the U.S. and China. In L.A./Long Beach alone, container volume rose 8.4% in June compared to the same month a year ago reaching 767,059 TEUs. On the flip side, retaliatory tariffs from countries abroad have caused some exporters to be sitting on higher-than-normal inventories while they await buyers’ orders to clear. The net result is a higher quantity of static cargo than usual around the country.
At IB&M, we have seen a noticeable uptick in requests for storage coverage from warehouse operators. We regularly hear about the potential risks for cargo in transit. However, cargo that isn’t moving poses another set of dangers, including theft, flood, earthquake, and fire. In the shipping business, there are many grey areas regarding who is responsible for loss or damage to cargo stored in a warehouse. A few coverage options available to protect these goods are as follows:
- Warehouse Legal Coverage
- Bailee Coverage
- All-Risk Coverage
These policies all react to cargo claims and cargo liability in different ways. For instance, all-risk coverage would be purchased by the cargo owner. In contrast, warehouse legal coverage and bailee’s policies are written for warehouse operators that could be held liable for cargo that is damaged while in their care, custody, or control. Each policy type has a different set of limits, deductibles, and exclusions.
As a warehouse operator or freight forwarder, be sure to speak with IB&M and educate yourself on the differences in each. It’s generally good practice to offer your customers the broadest coverage available for their cargo in storage. Should the customer reject that offer, document the file accordingly. Importers and exporters usually assume their cargo is covered no matter what or where, but that simply isn’t the case. IB&M offers several options for cargo in storage. Speak with your local IB&M representative to learn more.