The high cost of diesel fuel has introduced significant new risks to the transportation costs involved in bringing goods to companies for their inventories. Higher diesel prices put real pressure on the operating budgets of transportation companies.
Higher Fuel Prices Drive Up Other Costs
Fuel costs aren’t the only expense rising, since the higher total value of cargo being transported increases related costs as well. More investment tied up in inventory affects commercial insurance needs, and the potential financial impact of a business interruption is greater than it was when fuel prices were lower.
Higher Transportation Expenses Change Shipping Practices
Transportation carriers may respond by changing routes, reducing shipment frequency, consolidating loads, or more tightly managing fleet utilization. Shipments may be delayed due to these logistical adjustments.
Increased Expenses May Cause Coverage Restrictions
Transportation companies are evaluated on several factors, including financial stability, cash flow, and claims history. Companies that are financially weaker or considered riskier to insure may find it harder to secure adequate commercial coverage for their loads.
Work with your agent at Amerisent Insurance in Las Vegas, NV, to help manage the commercial insurance needed to protect your company’s inventory during transportation.
Things to Consider When Choosing a Carrier
For critical inventory deliveries, here are a few things worth considering:
- Look for a carrier with a strong safety record, which reflects their ability to manage transportation risk effectively.
- Work with your insurance agent to understand premiums, deductibles, liability limits, exclusions, and additional coverage options, such as business interruption insurance.
- Have a contingency plan in place for rising fuel costs, and understand any pass-through charges or fuel surcharges that may apply.
Reach out to Amerisent Insurance in Las Vegas, NV. We can help with all your commercial, business interruption, and transportation insurance needs.
