When you move goods across borders, a lot can go wrong. Freight damage, delays, theft, and loss aren’t rare events. They’re common risks faced by importers and exporters. Without marine cargo insurance, your business could face serious financial consequences.
So why are some Australian businesses still operating without proper cover?
This blog explains what’s at stake if you skip cargo insurance, common gaps in outdated policies, and how to reduce exposure with the right strategy.
We’ll also include a real example showing how Midas Insurance Brokers helped a client avoid major losses.
Quick Overview
Here’s what we’ll cover below:
- What freight risks Australian businesses are facing today
- Why many assume they’re covered when they’re not
- The financial consequences of shipping uninsured
- What typical cargo policies miss
- How to review your current coverage
- A real example of how the right cover made a difference
Keep reading as we explore each of these risks and how cargo insurance can protect your business.
Why Shipping in 2025 Comes With More Risk Than Ever
Australia’s trade landscape is extensive, with large volumes of goods moving across international borders each year. According to the Australian Bureau of Statistics’ latest international trade report, total goods and services exports in the 2023–24 financial year were valued at $659.4 billion, while imports reached $604.6 billion.
These figures highlight how exposed Australian businesses are to freight disruptions.
Why are freight risks increasing?
- Port disruptions and labour shortages impacting vessel turnaround times
- Global shipping delays caused by congestion and bottlenecks
- Weather events like cyclones interrupting scheduled routes
- Rising theft rates at storage depots and in transit
- Customs complexity leading to shipment holds or rejections
These aren’t theoretical problems – they impact cash flow, client relationships, and supply chains.
Real-World Problems Businesses Are Facing During Transit
If you import delicate goods, even a minor mishandling can cause major loss. Common incidents include:
- Water damage during storms
- Improper stacking or handling causing breakage
- Theft from shipping containers in port
- Perishable goods spoiling due to refrigeration failures
- Customs seizures due to missing paperwork
All of these examples have one thing in common – they can lead to major losses. And unless you’re covered, the financial impact is yours to absorb.
Why You Can’t Rely on Freight Companies for Cover
Many businesses assume their carrier or freight forwarder is liable for damaged or missing goods. But that’s not how it works.
Under international agreements like the Hague-Visby Rules, the carrier’s liability is limited. In many cases, compensation is capped at a value far below the actual cost of goods. For instance, the payout might be limited to about $1,000 per shipping unit – even for goods worth tens of thousands.
Proving the carrier was at fault is difficult, and the claims process is slow. Without your own cargo insurance, recovering losses can be close to impossible.
The Hidden Gaps in Many Cargo Insurance Policies
Having a cargo policy is a good start. But if it’s outdated or too generic, it might not cover what your business actually needs.
Here are common gaps we see:
- Coverage limited to port-to-port rather than door-to-door
- No protection during storage at warehouses or depots
- No cover for delays due to customs or inspection
- Exclusions for high-risk destinations or goods
- Inflexible cover that doesn’t adapt as your logistics change
If your logistics or supply chain has changed recently, your policy should be reviewed to match.
Financial Risks of Being Underinsured
When something goes wrong and you’re not covered, the costs can add up quickly. Here are real examples from local businesses:
- $48,000 loss due to electronics stolen during transfer at Singapore port
- $22,000 in spoiled goods from refrigeration failure mid-journey
- $70,000 loss after a customs misunderstanding led to goods being seized
These are avoidable losses. With tailored cargo insurance, businesses can recover fast and protect their operations.
What the Stats Say About Australia’s Trade and Freight Exposure
Australia’s freight and supply chains have faced significant disruptions in recent years. According to the Australian Competition and Consumer Commission (ACCC), global and domestic disruptions have led to congestion, delays, and higher costs in the container freight supply chain. Some importers have had to pay four to eleven times as much for ocean freight compared to the previous year.
Additionally, the Australian Bureau of Statistics (ABS) reported that in the September quarter of 2023, there were 67 industrial disputes, involving 18,800 employees and resulting in 37,100 working days lost.
These disputes occurred across various industries and states, highlighting the widespread impact on the workforce.
These statistics underscore the increasing risks associated with freight and supply chain operations in Australia. Businesses involved in importing and exporting must proactively manage these risks to ensure continuity and resilience in their operations.
A Real Example: How Midas Helped an Electronics Importer
A Melbourne-based electronics importer suffered major losses after water damage ruined a shipment worth $85,000. Their freight provider offered compensation capped at just under $6,000 due to limited carrier liability under international shipping rules.
They contacted Midas Insurance Brokers after the incident.
We assessed their full transit process and identified key gaps, including lack of door-to-door coverage and no protection for environmental damage.
Their new tailored marine insurance policy included:
- Full-value coverage for all shipments
- Door-to-door protection across multi-leg journeys
- Specific clauses for weather-related damage
Six months later, another shipment was exposed to similar risk. This time, they were fully reimbursed – avoiding what would’ve been another five-figure loss.
Questions to Ask When Reviewing Cargo Cover
Start by reviewing your current policy. Then ask:
- Does it cover all shipping methods I use (air, sea, road)?
- Is storage during transit included?
- Are both imports and exports protected?
- Do I have options for single shipment and annual policies?
- What are the specific exclusions that might impact my cargo?
If you can’t answer these clearly, speak to your broker. Your coverage might need an upgrade.
Final Thoughts
Transit risks aren’t going away. If anything, they’re getting more unpredictable. Without the right cargo insurance, a single incident could leave your business exposed to major losses.
The good news is the solution is simple.
Work with an insurance broker who understands your operations, routes, and risks. That way, you get protection that fits your business, not just a checkbox on a shipping form.