What is Shipping? Shipping Contract and Insurance

Shipping is the physical act of transporting a product or products. From this perspective, shipping is only a part of logistics. Because logistics covers the entire process of a product or service until it reaches its final destination.

However, careful planning of shipping is crucial for an effective logistics process. In addition to having different types, shipping involves contracts and various insurances. To learn more detailed information about shipping, you can scroll down the page and quickly find answers to the questions in your mind.

What is Shipping?

Shipping refers to the transportation of goods by sea, air, or land. The process is completed by transporting products or raw materials from one place to another using ships, airplanes, trucks, trains, or other means of transportation. Shipping is a vital part of the global supply chain and is critical for moving goods and materials between countries and regions.

What are the Types of Shipping?

Shipping types have evolved to keep pace with the times and, with the advancement of technology, have begun to operate in different transportation areas. We can divide shipping types into 4 groups: air, road, sea, and rail:

Air

Air freight is the process of dispatching products using air transport. Air shipping is advantageous because it is the fastest method, but disadvantageous because it is the most expensive transportation method.

Road

Road transport is a shipping method in which the cargo to be transported is delivered to its destination using only roads. This method is the most widely used type of shipping in the world.

Sea

This is the type of shipping where overseas voyages are organized to dispatch products from port to port. The increased speed of modern ships boosts the demand for sea freight. Moreover, it is the most cost-effective method among shipping types.

Rail

The cargo to be transported is loaded at train stations and delivered to the recipient at domestic or international destinations using only rail systems. After sea transport, rail is the most cost-effective type of shipping. However, rail transport takes longer compared to road transport. Therefore, rail shipping is not chosen very frequently.

What is a Shipping Contract?

A shipping contract is a mandatory agreement made between the party sending the goods and the carrier(s) transporting them. Under this contract, it is mandatory to include information about the goods to be transported, the number of packages, the net weight, the vehicle performing the transport, and the loading/unloading locations and dates. Shipping contracts also differ according to the types of transport.

• In Sea Freight: Marine Bill of Lading

• In Air Freight: Air Waybill

• In Rail Freight: Railway Consignment Note

• In Road Freight: Road Consignment Note (CMR)

This contract, signed between the consignor and the person receiving the goods for transport, indicates that the carrier has taken control of the cargo. The shipping contract, which is a contract that should be made even during home-to-home moving processes, protects the legal rights of both parties. In the event of a potential grievance, having a shipping contract plays a major role in resolving this grievance.

What is Cargo Insurance?

Cargo insurance is a type of insurance taken out to protect products against any damage or accidents occurring during transportation processes. Shipping insurance is divided into four different categories depending on the type of product being transported:

Commodity Cargo Insurance:

Commodity, meaning 'goods', is a type of insurance provided during the transport of goods such as gold, silver, sugar, coffee, and natural gas. With commodity cargo insurance, cargoes transported by air, road, sea, or rail are insured, thereby securing the goods.

Freight Insurance:

When your transported items suffer any damage under freight insurance, this damage is covered by the transportation company. However, for the transportation company to cover the damage, negligence or errors must be proven.

Valuables Transport Insurance:

This type of insurance is generally used for transporting jewelry, papers, or money. Under valuables transport insurance, the transport company bears full responsibility for the goods from the moment they are loaded until they reach their destination. In the event of any theft, accident, or loss, the grievance is resolved by the company.

Vessel and Yacht Insurance:

This is a type of insurance made against the possibility of physical damage to boats and yachts during their transfer, whether they are cruising at sea or moored to land.

Even though it has various types, making the right decision and obtaining the necessary contracts and insurances for shipping, which is an indispensable part of the logistics process, is highly important. Thus, by securing yourself and your products, you can minimize potential problems. If you want to take safer and more solid steps regarding the shipping of your logistics processes, you can consult Navlungo and obtain the support you need immediately.