INSURANCE\\\ Sales boost or


administrative burden? Offering the customer a one stop shop can bring you closer to your customer – and improve your bottom line, says Peter Lole & Co’s Rodd Bankier


At this time of year, many freight forwarders experience a short lull in activity which is oſten used to reflect upon the current state of their business and make plans for the new year. Frequently, these thoughts centre around how the forwarder can increase sales or offer added value to his customers and make more profit. The idea assails him that by offering by offering the second, he could achieve the first which, with proper management, would result in the third. But what else can he offer his customers over and above arranging safe and reliable transportation of their goods


ByRodd Bankier


from A to B, including Customs clearance, licences where required, documentation collection and so on?


These days, the concept of the


‘one-stop shop’ is increasingly popular, both with the general public and in industry, where many companies are happy to entrust all their logistics management to a


single provider. This should be a happy situation for the forwarder able to land such a contract since, generally, the expectation for both parties involved is that this will be a longstanding arrangement lasting several years and giving the forwarder a continuing stream of business. One implication of such an agreement is likely to be


Issue 1 2012


a service contract of some sort between the forwarder and his customer and I discussed these documents in an earlier article. Certainly, I feel strongly that the forwarder should consult his specialist insurance broker, or his insurer, before signing such a contract to ensure that his freight liability policy extends to protect him for the commitments he will make. One topic the service agreement


should deal with, I would suggest, is cargo insurance. The safe transit of cargo around the world by sea and air has improved enormously since I began my career in marine insurance many years ago, thanks mainly to containerisation and the common use of pallets for the transport of manufactured goods, but accidents still occur and the risk of theſt is ever present. The sea itself must not be forgotten - a mighty friend but a severe and unsparing mistress in adversity - storms and consequently heavy seas account for many casualties each year. Thus, marine cargo insurance, though oſten overlooked, is essential, in my view, and is another service that could


be provided by the enterprising freight forwarder. But, why should the forwarder


let himself in for more paperwork and administration, when his customer can arrange his own insurance? The answer is threefold. Not only does it relieve his customer of another burden but the more services the forwarder performs, the closer these tie him in to his customer and, while no one is


truly indispensable, you


can give a good impression of so being. The third reason is more mercenary - providing insurance can be another source of income. In providing an insurance facility for his customer and issuing certificates of insurance where required, the forwarder is providing a service and, therefore, entitled to charge for it. So, how do you go about putting the arrangements


in place? It’s


really easy. If you are a freight forwarder and your insurance broker has done a proper job, he (or she) may have already provided you with an open cover facility, along with a declaration pad for advising shipments to be insured. You agreed to this policy because


17


the broker told you it would cost you nothing to set up and you could insure goods if anyone asked you to, passing the cost on to your customer. No one has asked so far this year, so you haven’t sent in any declarations but now all that will change with the new service you propose to offer - the ‘one stop’ shop. While you have the policy in


your hand, go through it to see what rates are being charged, whether a minimum premium applies and what goods are excluded or if special conditions apply in some circumstances and compare these to what you normally ship for your customers. Then, call your insurance broker or, if you have no open cover, a broker who specializes in cargo insurance for the freight industry and tell him about your plans, asking also if his company can assist in arranging a seminar for your staff to educate them in


selling insurance to


customers. Training your staff and customers can be the key to better business prospects.


Rodd Bankier is a director of


specialist broker Peter Lole & Co Ltd www.peter-lole.co.uk


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