Defects, breakage and shortages: who is responsible for what
Three different problems get called by one word — “defects” — and they are dealt with in three different places. The goods turned out to be poor quality: that is the supplier. Fewer boxes arrived than were sent: that is the shipment. The goods were broken in transit: that is the packing, and almost never the insurance. Below: what covers what, and when it is too late to think about it.
Three different things called by one name
| What happened | Whose area | Where it is settled |
|---|---|---|
| Goods are poor quality, do not match the sample | supplier | before shipping: inspection, specification in the contract |
| Less arrived than was shipped | shipping and carriage | at the warehouse on receipt, after that through the carrier’s documents |
| Goods were broken in transit | packing | before dispatch: crate, corners, pallet |
Mixing them up is expensive. A complaint that says only “we got defects”, without separating these three cases, goes nowhere with anyone: the supplier says “we shipped it fine”, the carrier says “we carried it sealed”, and both are right.
Insurance does not cover damage to cargo
This is the main thing to know before dispatch, and we say it plainly rather than in small print. Insurance cover applies to loss, theft and non-delivery. Breakage and damage to cargo are not covered.
And yet damage during reloading is one of the most common complaints in this business. Cargo is moved several times on the way from the factory to the consignee’s warehouse, and every reload is a risk for a weak box.
The company sets aside no separate reserve for breakage, and an insurance payout for broken goods is not something to count on. Liability of the carrier and the freight forwarder for damage is a separate matter, settled by the contract and the applicable convention rather than by an insurance policy. The only thing that genuinely works against breakage is packing: a crate costs $15–25 per package, a pallet in a crate $30 per cubic metre, and that is almost always cheaper than a damaged consignment. What is available at what price — packing at the warehouse and insurance and packaging.
What compulsory insurance covers
Compulsory cover is provided by the carrier and differs by route. It is not our rate but the carrier’s condition, so the figures are quoted per route rather than as an average.
| Route and mode | Compulsory cover |
|---|---|
| Russia, road TIR | $3 per kg |
| Russia, air express | $10 per kg |
| Kazakhstan, road | $5 per kg |
This is worth working out in money against your own cargo, not in percentages. A 200 kg consignment of electronics worth $40,000 travelling road TIR is covered for $600. Formally there is insurance; in practice, if it is lost you receive one and a half per cent of the value.
Voluntary insurance: when it is worth taking
Above the compulsory cover, cargo is insured at the client’s discretion, and the rate depends on the declared value per kilogram. We keep the current rate table in one place — on the page insurance and packaging: three copies of one table on this site once drifted apart, and clients were quoted a rate the carrier does not have.
What matters here is the rule for deciding. Divide the value of the consignment by its weight. If the result is well above the compulsory cover on your route, insuring is worth it. If it is below, the compulsory cover is enough.
Voluntary insurance is arranged only when the client takes it. Decline, and nothing is insured above the compulsory cover on the route, and the gap between the value of the cargo and that cover stays with you. We are obliged to say this before dispatch, not after.
Shortages are caught at the warehouse, and only there cheaply
The only moment when a discrepancy in quantity costs an exchange of messages with the factory rather than the consignment itself is receipt at the warehouse in China. After that the price rises at every step: once shipped, you need the carrier’s documents; once cleared, you also need to explain to customs where the discrepancy with the declaration came from.
That is why checking and recounting is done by agreement: free of charge, or charged by labour if counting has to be done piece by piece. This has to be agreed before the cargo is received, not afterwards.
What can be inspected: the number of packages and the weight against what the supplier declared, a recount inside the packages, the condition of the packing, the labelling. What the warehouse does not do: test quality or compare the goods with a sample — that is inspection, separate work.
What to do before shipping so there is nothing to argue about later
- put the specification and tolerances into the contract — without them “the quality is wrong” cannot be proved by anything; see contract with the supplier;
- work out the value per kilogram and compare it with the compulsory cover on the route;
- choose packing by fragility rather than by price — breakage is not covered;
- agree a recount at the warehouse if there are many line items or the supplier is new;
- treat all of this as mandatory rather than excessive on a first consignment with a new supplier — the first shipment.
Frequently asked questions
Does insurance cover damage to cargo from China?
No. Insurance cover applies to loss, theft and non-delivery; breakage and damage to cargo are not covered.
The only thing that works against damage is packing: a wooden crate at $15–25 per package, a pallet in a crate at $30 per cubic metre. We set aside no separate reserve for breakage, and liability for damage is settled by the contract and the applicable convention, not by an insurance policy.
What is cargo insured for by default?
Compulsory cover is provided by the carrier and depends on the route: Russia road TIR — $3 per kg, Russia air express — $10 per kg, Kazakhstan road — $5 per kg.
Compare that with the value of your own cargo per kilogram: if it exceeds the cover on your route, the consignment is only partly insured.
When is it worth paying extra for insurance?
Divide the value of the consignment by its weight and compare it with the compulsory cover on the route: $3 per kg on road TIR to Russia, $10 on air express, $5 on road to Kazakhstan. Cargo worth more than the cover is only partly insured.
The current voluntary insurance rates, and the ceiling above which carriers will not insure at all, are covered on the insurance and packaging page.
What if less arrives than was ordered?
The cheapest place to catch it is on receipt at the warehouse in China: there a discrepancy costs an exchange of messages with the factory. Once shipped, you need the carrier’s documents; once cleared, you also need to explain the discrepancy against the declaration.
So a recount at the warehouse is worth agreeing in advance, particularly with a new supplier or a long list of line items.
Who is responsible if the supplier shipped poor-quality goods?
The supplier. Logistics has no bearing on it: the carrier moves what is sealed and does not assess quality.
The only thing that works here is what was written down before shipping: the specification and tolerances in the contract, and, on an expensive consignment, an inspection before dispatch.
Do you check the goods at the warehouse before dispatch?
By agreement: free of charge, or charged by labour if counting has to be done piece by piece. We look at the number of packages, the weight, a recount inside the packages, the condition of the packing and the labelling.
We do not test quality or conformity to a sample — that is inspection, and calling it goods receipt would not be honest.
Tell us what the goods are, what they are worth and what they weigh — we will say whether the compulsory cover on your route is enough and what packing this particular cargo needs.