Is Intermodal Trucking Insurance Necessary? And Who Pays It?

Insurance is all about reducing the negative consequences of risk. 

Consider how many people insure their homes or hold renter’s insurance, for example. A small payment each month offers protection from the costs of repairing or replacing a house if it’s damaged.

You can’t always avoid risk. But, you can put safeguards in place to protect your finances and support faster recovery.

Insurance can also be a requirement for some other agreement to move forward or needed to comply with the law. Home insurance is commonly required by a lender when a mortgage is involved in the purchase. And auto insurance is needed to legally operate a motor vehicle for personal use in 48 out of 50 states.

With these common examples in mind, it becomes a little easier to start understanding intermodal insurance.

Intermodal trucking insurance plays a key role in intermodal freight transportation. It doesn’t protect the contents of a shipping container from damage, of course. However, intermodal insurance compensates the owner of those contents if damage covered by the policy occurs.

This type of insurance also protects the professionals transporting those goods from liability. Intermodal insurance also helps intermodal trucking companies align with requirements set by the US government for working in port areas.

Let’s take a closer look at the key concepts related to intermodal trucking insurance. We’ll start by defining intermodal trucking, then dive deeper into the concept of intermodal trucking insurance.

Intermodal Trucking Definition

What is intermodal trucking? In simple terms, intermodal trucking is the use of a tractor-trailer to carry shipping containers (also called intermodal shipping containers).

Container trucks, which use a special chassis designed to safely carry these containers, are a key part of this activity. Because shipping containers and chassis are standardized in their dimensions, they can lock together for safe transport.

The term “intermodal” refers to the use of more than one mode of transportation for moving a shipping container. The number, types, and order aren’t important. if a shipment is in a container, it’s intermodal.

Intermodal containers are all sealed before they start the first leg of their journey. This helps transporters know that the contents haven’t been tampered with. It provides a similar benefit for the intended recipient. The seal also supports a faster trip through customs, although some crates will be inspected by officials. 

There’s plenty more to consider, of course. Investopedia offers a thorough explaination about intermodal freight that can help answer many common questions.

The intermodal containers might be carried a short distance to another form of transport, like a railyard. They may also be carried to a nearby final destination — a warehouse or similar facility. 

When the container truck covers only a short distance within a single city or metropolitan area, it is called drayage.

Containers may also be carried across longer distances by a container truck to another port, railyard, or final destination. This over-the-road activity is distinct from drayage, but still a key concept in intermodal trucking.

Intermodal Trucking: Part of Much Larger Shipping Processes 

Moving freight in containers with trucks is one part of the much larger intermodal freight transport cycle.

Intermodal freight transport centers on the movement of shipping containers via aircraft, ships, trucks, and rail transport. The contents never exit the container until reaching their final destination, making transport simpler and faster. Intermodal shipments are a common way for goods to travel across the globe, especially when crossing large bodies of water.

Intermodal freight transport is itself a significant part of the much larger global supply chain. We won’t go in-depth on that topic (we still need to share important information about intermodal trucking insurance). Iit’s worth noting that every shipment carried by a container truck is part of a much larger supply chain.

A bird’s-eye view of a large intermodal terminal, with boats, cranes, containers, and more visible.
Container terminal with gantry cranes

Learning More About Intermodal Trucking Insurance

With a better understanding of what intermodal trucking is, it becomes a little easier to discuss the specifics of intermodal insurance.

Let’s quickly look at the insurance policies that most or all trucking companies carry. It will help us better understand where intermodal insurance fits in. Then, we’ll dive deeper into intermodal trucking insurance itself.

Common Insurance Policies Held by Trucking Companies

Trucking companies constantly transport valuable cargo on public roads. There are plenty of risks involved and many potential scenarios to consider. These can vary greatly from one trucking company to the next.

However, many trucking companies purchase certain types of coverage from insurance agencies. These include commercial (i.e. for a business, not an individual) policies for:

  • Automotive liability
  • Cargo liability
  • General liability
  • Physical damage

Now, we’ll review some foundational points related to intermodal trucking insurance. After that, we’ll see how one of these policies connects to the much more specialized concept of intermodal insurance. 

What is Intermodal Trucking Insurance?

Intermodal trucking is an especially complex part of the larger freight transportation industry. Ports are restricted areas. Ownership of containers, their contents, specialized chassis for carrying them, and the tractors that pull them is complex. Who owns what can change significantly from one job to the next.

Protecting the assets involved in intermodal trucking is important for all stakeholders. Intermodal trucking insurance helps to limit risk in this unique environment. 

As we pointed out previously, intermodal truck insurance accomplishes a few key goals. In the big picture of freight transport and business operations, this insurance:

  • Protects the investment of the owner in the goods or raw materials held in the shipping container, should they become damaged
  • Helps guard the trucking company against liability.
  • Meets legal requirements that allow a container truck and its driver to enter a port and carry out their duties.
A ship moves into the harbor in front of a large intermodal terminal.

How Does a Company Purchase Intermodal Trucking Insurance?

Intermodal trucking insurance isn’t a single policy that covers all needs related to intermodal trucking. Instead, the term refers to a rider — an addition to (or modification of) a standard policy. In general, riders help tailor insurance coverage to be more effective and useful for the policyholder.

In this case, the intermodal trucking insurance is a rider added to cargo insurance coverage. Kelly Teg, of insurance company Reliance Partners, explains to industry publication FreightWaves that cargo insurance is the base policy.

While all trucking businesses need insurance to protect the cargo they transport, only some need specialized coverage for intermodal freight work. Having intermodal insurance as a rider make insurance more flexible. It’s easy to enhance coverage for the companies that need it with a rider. At the same time, nothing about the base policy has to change.

Additional Options and Choices for Intermodal Trucking Insurance

Kelly Teg, mentioned above, also highlights the options that can be included as part of a larger intermodal trucking insurance package.

Hired and non-owned coverage is important because many trucking companies rent their chassis on a short-term basis. Having coverage for all assets in use, whether owned or not, means avoiding paying the full price should an accident occur.

There is also trailer interchange insurance. This is used to protect against damage to the intermodal containers themselves. Those containers generally aren’t owned by trucking companies. And the last thing a drayage company wants is to have to pay for a replacement container.

The Importance of the Uniform Intermodal Interchange and Facilities Access Agreement Certificate

We’ve looked at how intermodal trucking insurance helps trucking companies. We’ve also reviewed the benefits for owners of the containers, and owners of the goods inside them. There’s a clear practical benefit that comes from carrying this type of insurance. Companies don’t have to assume huge financial risks just to transport a container full of goods.

Intermodal insurance also plays a key role in compliance with the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA). Why is that important? Without a UIIA certificate, a truck likely won’t be allowed to enter a port or railyard.

Why is the UIIA Used Across so Many Ports?

The Intermodal Association of North America (IANA) oversees the UIIA program. They work with many businesses in intermodal shipping to set common standards. The certificates they issue verify that each truck (and business behind it) entering a port has the needed insurance.

The full set of requirements to earn a UIIA certificate are long and detailed. Perhaps not surprisingly, they focus on appropriate insurance coverage.

The items included as part of an intermodal insurance rider are crucial for trucking companies that want to receive a certificate. These businesses must also carry the right amount of coverage. The minimum requirement for general liability insurance, for example, is $1 million.

A row of intermodal containers sit at a loading dock.

Is Intermodal Trucking Insurance Necessary?

In short, yes. Trucking companies that carry intermodal containers need this insurance. We’ve already highlighted the reasons why: reducing liability and complying with port requirements.

Is your business looking for a drayage and intermodal trucking partner? You must make sure they carry the right types of insurance. On a practical level, they may not be able to access a port without it. While the insurance itself doesn’t grant access, it leads to a UIIA certificate, which does facilitate entry.

A container full of inventory stuck in a port is the last thing your business needs. Especially if it has perishable goods or time-sensitive cargo inside. Be sure that your trucking partners have the right insurance in place, as well as valid UIIA certificates.

You can count on top intermodal trucking companies to make sure they have the right coverage in place. Removing obstacles to entering a port is just as important for them as it is for your organization. However, if you’re working with a new intermodal partner, it’s important to make sure they have the needed coverage.

Who Pays for Intermodal Trucking Insurance?

Intermodal shipping is a complex process. Many different businesses and organizations have to work together for the process to work as intended. There are plenty of compromises and cooperative agreements that go into intermodal trucking and freight transport.

Sometimes, those compromises will go your way. When it comes to intermodal insurance, your business doesn’t need to worry about paying for a policy. Or spend time double-checking that coverage is up to date. 

That responsibility falls on the trucking company. However, your business still benefits from the insurance covering the contents of each container.

Make sure that any trucking partner you work with has the right insurance in place. Then, you can rest easy. Your business doesn’t have any other obligations when it comes to intermodal trucking insurance.

A Dependable Intermodal Trucking Partner for the Port of Oakland — and Much More

There are plenty of companies that take on drayage and intermodal trucking jobs. How can you be sure your organization finds the right one?

The ability to take on a variety of work is important, especially for companies with import and export needs. At Iraheta Bros, we offer a full range of drayage services for import and export at the Port of Oakland. We also capably handle food-grade bookings.

Considering services provided beyond the pick-up and delivery of shipping containers is a good place to start. There’s more value in this type of business partnership when the trucking company can take on other tasks.

We connect our customers with a variety of helpful support services. As food-grade refrigerated and frozen container specialists, we have the training, tools, and facilities to keep containers functional and sanitary. That includes a secure, monitored, and temperature-controlled warehouse facility.

We own and operate both 20ft and 40ft triaxle chassis. Additionally, we maintain specialized equipment for heavy container drayage. Our team can bring containers beyond the Port of Oakland across longer distances, too. We can deliver your container over the road within California and, in some cases, to Nevada.

When you partner with us, you can count on:

  • Competitive rates
  • Transparent and efficient billing
  • An innovative digital transportation management system
  • Screened and certified employees and drivers

We’re ready to help you with all of your intermodal trucking, drayage needs, and more! Work with Iraheta Bros – Request a Quote Today!

Is Intermodal Trucking Insurance Necessary? And Who Pays It?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.