ITC | Cargo Insurance | Train Theft

Los Angeles Train Robberies Accentuate Need For All-Risk Cargo Insurance

Young Company FTZ News

Masked train robberies are typically thought of as a representation of a bygone era. In coordinated attacks, bandits and thieves would identify specific areas where trains could be stopped or slowed down, leaving them vulnerable to attack and ripe for the picking.

There was a time when a famous individual or group, like The Wild Bunch in the late 1800’s, would be held responsible for these types of robberies, creating headlines and front page images across the country.

But these robberies aren’t taking place in the 1800’s or even that millenia.

Train robbery is happening right now and unfortunately, the parties responsible aren’t as easy to spot as an outlaw wielding a Colt .45 on horseback.

Governor of California, Gavin Newsom, recently stated, “These images look like a Third World Country.” The images he was referring to were visuals depicting and exposing the growing problem of train theft in Los Angeles county. “What you saw here in the last week is just not acceptable.” Newsom stated as he surveyed the damage in disappointment. He’s right, and while corporations and governments attempt to find the responsible parties so they can be brought to justice and governance can be achieved in these areas, experienced and knowledgeable experts like ITC Diligence International Inc. are constructing solutions for businesses who are dealing with this very real problem.

One of the most classic forms of robbery still runs rampant today, highlighting the need for awareness, preparedness, and risk mitigation. When it comes to risk mitigation, businesses are required to bear the burden, which means either reimbursing or covering theft losses out of cash reserves, or finding solutions to offset potential losses as a result of these railway robberies, for example, all-risk cargo insurance.

Cargo insurance provides benefits to companies who understand there are risks with importing goods, distribution and delivery, and function management of the global supply chain. When a container on the railroad is robbed, all-risk cargo insurance is there to provides financial reimbursement of lost goods.

Using a specific example, it becomes much more clear how cargo insurance provides this benefit. The General Average is a principle that governs cargo loss during maritime, and states that all companies shipping goods in a container that sustains loss must split the cost evenly. Suppose there are 3 companies using shared space in a container, one shipping TV’s, another importing bikes, the third bringing car tires into the US, and the total value of all these goods is 1 million dollars. If this container is robbed only of it’s TV’s and the cost of the stolen goods is 250 thousand dollars or 25%, these 3 companies must now split this cost as a principle under the General Average, regardless of the bikes and car tires being untouched.

This is why all-risk cargo insurance is a necessity for any business that operates as a function on the supply chain. ITC Diligence International Inc. has been partnering with companies like Avalon Risk Management and working with the Customs Border Patrol (CBP) to build a 4th party logistics (4PL) program that has the importers, manufacturers, and business owners peace of mind as the primary focus.

Getting goods through customs and into the US is troublesome enough. With the added risk of theft constantly looming, it’s easy to see the need for risk mitigation and a cargo insurance solution.

Contact ITC Diligence International Inc. today to discover how the solutions they’ve developed over 30 years directly affect the supply chain with the implementation of cargo insurance, 4th party logistic management, and understanding changing tariff environments.