3 Types of Freight Transportation That Require Insurance

Whether your business offers or uses freight transportation services, your business is prone to risks and liabilities that can cause huge setbacks down the road.

Luckily, multiple types of insurance can protect your business from potential setbacks caused by theft, accidents, or perils. However, with all the types of insurance in the market offering different coverages, you might wonder, “which insurance is the best type for my business?”

This article will help you understand the different types of freight transportation insurance, who can benefit from it, and how it can protect your business.

Let’s begin!

What Is Freight Transportation?

According to Canada Revenue Agency, freight transportation is a service that transports tangible items like mail and other property, such as merchandise, goods, and cargo.

Whether the recipient pays a separate fee for the item or service, the mode of transportation used to deliver said item is considered a freight transportation service. However, it does not include transportation of personal belongings by passenger transportation services.

Now that we've defined what freight transportation is, let's discuss the three major types of freight transportation.

3 Major Types of Freight Transportation

Over the past two years, the freight transportation industry has evolved drastically. Business owners heavily rely on this type of service. And if you offer any of these types of freight transportation, you must have insurance to operate legally.

Ground Freight

Ground freight refers to vehicles and conveyances transporting tangible property from one point to another on land. Domestic shipping usually uses ground freight transportation. These include but are not limited to:

• Trucks;
• Articulated trucks trailers;
• Cage trucks;
• Low bed trucks;
• Refrigerated trucks;
• Tractor-trailers;
• Trains; and
• Vehicle carrier trucks. 

There are two types of ground freight:

• Less-Than-Truckload - property and goods that do not fill the truck entirely (shippers often share one truck to cut shipping costs); and
• Full-Truck - a truck filled with property and goods by one shipper. 

Sea or Ocean Freight

Sea or ocean freight pertains to containers and ships transporting tangible property and goods from one point to another via sea and ocean. These include but are not limited to:

• Bulk carriers;
• General cargo ships;
• Container ships;
• Barges; and
• Tankers. 

There are four types of sea or ocean freight:

• Full Container Load (FCL) - a container filled with property and goods by one shipper; 
• Less than Container Load (LCL) - a container filled with property and goods by several shippers; 
• RORO (Roll On, Roll Off) - usually used for vehicle shipping; and
• Dry Bulk Shipping - used for dry bulk cargoes that need to remain dry at all times. 

Sea or ocean freight consumes the most time when transporting tangible property and goods. But compared to air freight transportation, sea or ocean freight transportation is cheaper and more flexible for international shipping.

Air Freight

This type of freight transportation refers to planes transporting tangible property and items from one point to another via air. These include but are not limited to:

• Airplanes;
• Helicopters;
• Airships;
• Blimps;
• Gliders;
• Paramotors; and
• Hot air balloons. 

There are two types of air freight:

• General Cargo - property and goods that do not require precautions or special handling during air transport; and
• Special Cargo - property and goods that require proper packaging, labelling, handling, and documentation. These include wet cargo, dangerous goods, live animals, and other sensitive goods. 

These days, people opt for air freight transportation to expedite transport, whether it’s for domestic or international shipping. However, compared to sea freight, there are limitations to air freight transportation, such as the weight and size of cargo.

Types of Services That Are Considered Part of or Incidental to Freight Transportation

Whether your business offers packing, towing, loading and unloading, storing and warehousing, or even refrigeration services, if it concerns transporting a good from one place to another, it can be considered part of or incidental to freight transportation. Below are some examples:

• Reload centres;
• Shunting services;
• Stevedoring;
• Towing services;
• Packing services;
• Deadheading and empty mile charges;
• Pilot car services; and
• Driving services. 

Types of Insurance That Can Protect Your Business

Now that we have discussed the types of freight transportation and services, it’s time to choose the right insurance to protect your business!

Freight Forwarder Insurance

This insurance provides additional coverage for companies that use freighters to transport tangible property and goods. Types of insurance that also fall under this type of insurance are:

• Marine insurance: protects ship owners, cargo companies, and any business on the sea.
• Cargo insurance: coverage for damages to your cargo if it gets lost, stolen, or damaged in transit, whether you are the recipient or shipper. Below are some examples of cargo insurance:
  • Land cargo
  • Marine cargo
  • Open cover cargo
  • Specific cargo
• Shipping insurance: coverage for your parcel shipped by a carrier that is damaged or lost in transit. 

Transportation Insurance

This insurance provides coverage for damages to goods in transit. It also protects companies involved in hauling cargo by ground or air in case something happens that leads to losing money and a negative reputation.

Heavy Trucking Insurance

Heavy trucking insurance provides coverage for companies that use heavy vehicles (26,001 to 33,000 pounds) to transport tangible property and goods from one location to another. This policy includes commercial truck liability, physical damage, uninsured/underinsured motorists, and truck cargo coverage.

Personalized Insurance Bundles for Your Business

If you are looking for a trusted insurance partner, KASE Insurance can help personalize your insurance policy according to your needs. We also offer personalized insurance bundling if you are considering multiple types of policies. This way, you only pay for what you need.

With our award-winning services and dedicated assistance, you will experience what it means to be truly insured—safe and protected. 

Entrust your business’s success with us. Contact us today to get started!