During transportation and storage, all cargo is vulnerable to a range of risks, such as damage, pilferage and theft, breakage, non-receipt of part or an entire consignment. Cargo insurance thus provides protection against potential financial losses resulting from such risks. Business Units should ensure the following: a. Protection for goods subject to risks, including war, strikes, riots and civil commotions.; b. The duration of insurance coverage is sufficient for the period of transportation from “warehouse to warehouse,” including a minimum of 30 days, estimated for storage at the destination site; c. Goods are insured for the cost, insurance and freight (CIF) value plus an agreed percentage, generally 10 percent, to reflect the indirect cost to the Business Unit incidental to cover, or replace goods.
Forwarding agents, known also as freight forwarders or freight brokers, act as international freight forwarders, clearing agents or custom brokers to carry out the formalities and operations of consignment. Generally employed to receive consigned goods where UNDP staff may not be physically present, forwarding agents engage in the prompt clearance and collection of goods vulnerable to loss and pilferage. Business Units should forward to the respective forwarding agent all necessary documents (i.e., bill of lading, shipping instructions) for the release of goods in transit.
Five basic modes of freight transportation – sea, rail, road, air and parcel post – are used, either individually or in combination, in international transportation. Business Units should consider modes of transport that are both economical and efficient. In general, rail, road and air transport costs are comparatively higher than freight by sea, thus UNDP recommends sea transport. To ensure sound delivery however, it is advisable to select a conference liner, which operates along definite routes and pre-determined ports of call.