Cargo theft is a daunting challenge within the transport sector, with freight trucks being prime targets for thieves. These criminals employ a variety of methods, from slashing tarpaulins to vandalizing trailers. Regrettably, stolen cargo is often unrecoverable, triggering a series of procedures to assess the damage, establish liability, and uncover the circumstances surrounding the incident. This involves cooperation among insurance companies, cargo owners, carriers, and law enforcement, all driven by a shared goal: minimizing the material consequences and ensuring swift compensation. At Cargofort, we recently managed a case involving the theft of nice pallets, and here’s how we successfully resolved it.
The Facts
Our client, a transport company, was tasked with transporting goods from Bulgaria to England. After the mandatory rest break for the driver in England, he made a shocking discovery the next morning: a gaping hole in the tarpaulin and all nine pallets of cargo were gone.
The Challenges
In such thefts, a common tactic is to drug the sleeping driver, allowing thieves ample time to make off with the cargo. In this case, the driver remained oblivious during his break, raising questions about his account of events.
Action
We promptly informed all stakeholders in the transport chain about the incident. Since the cargo was insured by its owners, the cargo insurer was obliged to compensate based on the invoice value and then file a recourse claim against the responsible carrier. At this stage we’ve informed the claimant and his cargo insurer that our insured’s liability is limited and that higher claims won’t be accepted. We also notified the “Carrier’s Liability” CMR insurer on behalf of our customer. Given the complete theft of the goods, an immediate inspection wasn’t necessary. Our next step was to engage the English police to obtain an official police report (which is mandatory document for every insurer).
Rules
According to the CMR Convention Art.17.1, the carrier is responsible for cargo from pickup to delivery. Together with that, according to Art. 23. 3, when the carrier is at fault for the total or partial loss of goods, a liability limit applies, calculated at 8.33 SDR per kg. of the missing cargo’s gross weight. However, if the damage results from the driver’s gross negligence or willful misconduct, the carrier is liable in full (according to Art. 29 CMR Convention). Moreover, the claimant is entitled to claim the transport cost reimbursement proportional to the missing/lost goods (according to Art. 23. 4).
Results
After supplying all the necessary documentation, the cargo insurer sent a recovery claim to our insured client and its CMR liability insurer, seeking compensation within the stipulated limit, which basically was half of the invoice value of the goods. The transport freight amount was claimed as well, since the freight charge was previously paid by the claimant. As an insurance broker, our role is to maintain clear and transparent communication with all parties involved, leading to a well-justified and legally sound resolution. Thanks to these qualities, Cargofort achieved a positive outcome in this case—the CMR liability insurer approved the claim value and paid the sought compensation.
Conclusions
This case study underscores the importance of understanding and correctly interpreting the regulations governing the road transport sector. Insurance companies must gather comprehensive information to objectively analyze incidents and earn the trust of their clients. Having insurance brokers with an open-minded approach, adept at guiding the process to an effective resolution, offers peace of mind for every transportation company. With Cargofort at your side, you can concentrate on your core business while we safeguard your material interests.