Learn How to Calculate Marine and Cargo insurance in International Trade and Logistics

Do you add the cargo insurance for your shipment?

Dangers are hidden everywhere in international transport. If your shipment is not properly insured, your shipment will not be guaranteed for any damage.

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I sometimes here news that a vessel has been burned.

Some people who are not used to international logistics tend to neglect this security issue. They think that it is natural that things arrive normally.

But the truth is like this; goods are transported relatively safely if they are transported in Japan, but it is not so easy if they are transported internationally across countries.

We need to understand the risks, especially when transporting foods, fragile goods such as glass, and expensive cargo.

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Be careful because there are sometimes equipment problems when transporting food using refrigerated containers.

That’s right. Not only equipment troubles, but also there are dangers of being shaken on ships, accidents during land transportation, and rough handling of workers depending on the country.

This time, I will explain how to add insurance in case of an accident and how to calculate the insurance as well.

What are Cargo and Marine insurance?

Marine insurance is the insurance that mainly covers the cost of damage incurred when shipping cargo to foreign countries.

Although you may think that “only marine transport” is covered by marine insurance, there is also comprehensive insurance that also covers air and land transportation.

If you want to have marine freight insurance, you just need to ask your forwarder, “Insurance, please.”

Please consult with your forwarder to determine the range to cover your insurance.

Do we need to insure all shipments?

If we add the insurance on the cargo, there is a cost, of course. It is depending on the commodity and the condition of the packing, it is not always necessary to have insurance.

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Even some of our customers don’t have marine insurance and sometimes send them by CFR.

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But in that case, the insurance may be on the importing side.

How much is marine insurance?

The amount of marine insurance depends on the insurance company and depends on the type of insurance to be paid, but generally it is like this:

Invoice Value × 110% × 0.2%〜0.3%
* Minimum amount about USD28 〜 USD30 / time

How to calculate Marine insurance

Now, you know the interest rate of insurance. Then, I’ll show you a specific calculation method.

Example: frozen mango

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You definitely insure this.

Insurance Company: Marine Insurance Company A
Insurance interest rate: 0.3%
Invoice Value: USD 10,000
Security application ratio: 110% of Invoice Value

Security application amount: USD 10,000 × 110% = USD 11,000
Insurance amount: USD 11,000 x 0.3% = USD 33

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It’s not so expensive, is it?

Should we get Marine Insurance?

As an international logistics company, we import and export more than 2,500 containers every month, but troubles due to cargo damage are still constant.

The most serious problem at this time is in the case the customers haven’t got insurance.

Cargo damage is not guaranteed by shipping companies, of course. Trucking companies in Thailand often have insurance that covers THB 1 million to THB 3 million (about 3.5 million yen to about 10.5 million yen).

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Well, it’s in the case at Thailand… Truck companies can’t control the driver’s risk either…

* In the case of Thailand, truck companies already have insurance so that you do not need to add the normal insurance.

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Also, the shipping company never guarantees…

You should add Marine insurance as much as possible

As mentioned above, there is little control and there is a possibility of accidents and problems. The insurance amount itself is generally about 0.2% to 0.3%, and the minimum amount is around USD28-USD30.

Because it is insurance, it is a cost just in case, but it is important to understand and control risks as much as possible.


On the contrary to domestic transport, which ends at loading on a truck, international logistics involves risk of various cargo damages before the cargo arrives at the customer.

It is not easy to control all risks in such a situation.

You feel much secure if you have insurance, when you consider troubles caused by cargo damage and the effort and time to deal with it.