Whenever the holiday season approaches, you know it is time to ship new products and gifts to and from any part of the world. It is this time when shipping industries encounter the biggest traffic in the year.
Recent data shows that FedEx is among the shipping companies that receive most parcels during this season, receiving about 280 million parcels between Thanksgiving and Christmas. However, for these shipping companies, the process is not always smooth sailing. Sometimes, things can go awry.
With these packages changing so many hands, customers might wonder whether it is necessary to incur insurance costs for their parcels. Some considerations have to be made before making this decision. The two most important factors to consider are:
1. The value of the parcel.
2. The shipping company’s tolerance to risk.
FedEx Shipping Insurance Options
Declared Value Advantage
FedEx offers a wide range of insurance options to ensure the safety of a customer’s parcel. To most customers’ relief, the company can declare a value of up to $100,000 for any shipment of high-value items such as gemstones, jewelry, and even precious metals. This gives customers peace of mind whenever they are shipping high-value packages to international destinations or whichever zip code area in the US.
However, this cover is not insurance for your package. They refer to it as declared value coverage. This represents FedEx’s maximum liability for a parcel in the event of damage or loss. It is, therefore, necessary to declare the value of your package before shipping so that you are advised by the shipper on how to insure it.
FedEx Declared Value Advantage is offered to select customers as it is a contract-only service. For customers to qualify for this service, they must satisfy the required qualification variables which include:
- Length of relationship with FedEx
- Package volume
- Shipping history
- Commodities requested
- Loss and revenue history
International Support Policies
FedEx also supports exporting options for their customers from the US to 58 destinations worldwide. The declared value advantage service also governs these services. Customers who wish to ship to foreign countries are expected to comply with the international laws of the destination country.
For the FedEx Declared Value Advantage to apply, shippers are expected to have a valid FedEx account and the Declared Value Advantage agreement as proof. When shipping to international destinations, customers are also expected to give a full description of their commodities by answering the following questions:
- What is your commodity?
- What is it made of?
- What is the value of each item?
- Is the commodity a precious jewel or a semiprecious jewel?
- Is the jewel a necklace, ring or earring?
Customers are expected to file a Shipper’s Export Declaration whenever they are shipping jewelry with a value of more than $2,500.
Pros of FedEx
With so many shipping companies available today, shippers will choose a shipping company that suits their needs. FedEx offers many options for shippers, most of which accrue benefits to the customers. Here are some of the advantages of shipping with FedEx:
- Easy checking and calculation of rates from their site
- Automatic updates on your packages and real-time tracking
- On-time parcel delivery or money back option
- Reliable customer care services worldwide
- Paperless billing which is securely done through their website
- Proof of package delivery on the invoice
Cons of FedEx
As you choose FedEx for your shipping needs, keep in mind its downsides. Here are some of its disadvantages:
- Higher shipping insurance rates
- No provision for the free package pickup service
- Slow claims process, usually takes 120 days or more for resolution
- Can only ship with FedEx in order to use their insurance
Cabrella Insurance Options
With 25 years of experience under their belt, Cabrella is a third-party shipping insurance company that offers similar services to FedEx. They partner with other shipping carriers such as FedEx, USPS, and UPS. Their insurance policies cover any company: from a small business to a Fortune 500 company.
Declared Value Coverage
Cabrella offers arguably the highest coverage per package. We are talking about up to $150,000 for any parcel whose value has been declared. This coverage will cover high-value goods such as jewelry and precious metals.
Small Parcel Shipping
Cabrella stamps affordable insurance prices on small packages. They also provide insurance policies that cover parcels falling under this category, which usually weighs less than 150 pounds and can measure up to 108 inches in length.
For parcels exceeding the weight and size restrictions of small packages, Cabrella offers policies to cater to the freight shipping service. This service entails methods of shipping such as truckload (TL), less-than-truckload (LTL), rail, and vessel transportation.
Pros of Cabrella
Cabrella shipping results in many benefits for its customers, some of which include:
- High insurance limits: Up to $150,000 coverage per parcel
- Customization to cater to unique insurance requests
- Less international restrictions and can insure to 182 countries
- Greater saving: Up to 90% saving compared to other shipping companies and therefore fewer insurance costs
- Easy tracking of information such as your insurance history
- Lower average monthly premiums for your insurance policy
- Paperless claim filing
- Claims under $20,000 are resolved in 30 days
- Can choose nearly any carrier to ship with, Cabrella will insure it
Cons of Cabrella
There are some reasons why FedEx may be better for your situation, with some of the scenarios highlighted below:
- If you are shipping one item only (unlike e-commerce businesses that have to regularly make shipments) it may be more convenient to purchase insurance through the carrier
- If you are shipping items that are lower value, purchasing a small amount of additional coverage from FedEx (who is liable for up to $100) may be the best option.
Though the two companies may have some similarities in their operations, their differences are quite visible. Cabrella offers higher coverage limits for valuable packages (up to $150,000), FedEx’s declared coverage for valuable parcels is $100,000, which is considerably lower than Cabrella’s.
Cabrella insures to more countries (182 as compared to FedEx's 58) and has a faster claims resolution time (30 days opposed to 120 with FedEx).
However, Cabrella works best for e-commerce businesses with regular, high-value shipments. If you are just sending a one-time package or packages on the lower spectrum of value, FedEx is a great solution for you.
Discover how much Cabrella can save you on shipping insurance rates by getting a quote today!