Beware! 27% of Land Shipments End in Huge Losses!

The Indonesian logistics industry is facing significant challenges. According to a recent report from the Ministry of Transportation and the Indonesian Logistics Association, approximately 27% of land shipments are damaged, lost, or significantly delayed each year. This figure demonstrates the vulnerability of land transportation to operational risks, particularly given the high volume of shipments involving heavy vehicles, container trucks, and long-distance expedition fleets.

Many logistics and shipping businesses still believe the greatest risks lie solely at sea or by air. However, land transportation contributes to the majority of national distribution activity, with over 70% of goods in Indonesia being shipped by land. With varying road conditions, heavy traffic, and increasing theft rates, the risk of financial loss on land routes can be just as devastating as on cross-border shipments.

Damage to high-value items such as heavy equipment, generators, electronic devices, and industrial materials often results in billions of rupiah in losses. Unfortunately, many companies still don’t realize the importance of comprehensive protection through cargo insurance. This article will discuss land logistics risks in detail and outline protection solutions from professional insurance brokers. Before the risk becomes a reality, Contact L&G Insurance Broker now at 08118507773 for a free consultation and recommendations for the best protection for your business.

Why Land Routes Are the Main Choice for Indonesian Logistics

Indonesia is an archipelagic nation with a continuously developing road infrastructure. Land routes serve as the backbone of national distribution due to their flexibility and efficiency. For manufacturing, construction, and retail companies, shipping by truck or trailer is more practical and economical.

However, despite its efficiency, this route carries a high potential for risk. Vehicle accidents, cargo theft, extreme weather, and even human error are real threats that can disrupt the supply chain. In a modern business context that demands speed and accuracy, freight insurance plays a vital role in protecting assets during the distribution process. Protection products such as cargo insurance for land shipments are designed to compensate for damage, loss, or delays that occur during transit, making it an integral component of logistics.

Risks of Shipping Goods by Land That Are Often Ignored

Freight trucks are the lifeblood of land logistics. However, the higher the volume of shipments, the greater the potential risks. Some common risks in the field include:

• Traffic accidents — trucks overturning, crashing, or skidding on difficult terrain (major factors causing financial losses).
• Damage from shock or severe weather — especially to electronics and high-precision machinery that are susceptible to corrosion or internal damage.
• Truck theft and hijacking — often occurs on interprovincial routes or rest areas with minimal supervision (a risk that increases by 38% in hub areas).
• Human error — loading errors, driver negligence, or incomplete documentation leading to rejection at the receiving warehouse.
• Infrastructure Damage — Bridge collapses, landslides, or roads are cut off causing significant and costly delivery delays.

As a real-life example, a truck carrying heavy equipment recently overturned on a construction site in West Java, causing losses of up to Rp 8.5 billion. The incident occurred due to a slippery uphill road and an improperly secured load. Cases like this can have fatal consequences without proper cargo insurance coverage.

Financial Impact for Companies Without Insurance Protection

When an incident occurs in the distribution channel, the damage goes beyond lost goods. Reputation, customer trust, and even the smooth running of projects can be impacted.

Without freight insurance, companies must cover all replacement costs themselves—from physical damage to project delays. In the construction and logistics industries, shipments can cost billions of rupiah per load. A single accident can wipe out an entire year’s profit margin.

Furthermore, public liability can also arise if an incident causes damage to a third party (for example, a truck overturns and lands on a resident’s property). This is where the role of cargo insurance and professional insurance brokers becomes crucial in managing business risks and preventing lawsuits worth billions of rupiah..

Why Insurance Claims Are Often Rejected by Logistics Entrepreneurs

Not all property owners understand the details of the clauses in their insurance policies. Choosing the wrong coverage often leads to claim denials. Some common reasons for claim denials include:

1. The policy only covers basic risks (Institute Cargo Clause C) even though the loss is caused by internal factors such as shocks or driver negligence.
2. There is no complete shipping documentation (invoice, delivery note, bill of lading), so the claim is considered administratively invalid.
3. Goods are not packed according to transport safety standards (improper packing), violating policy conditions.
4. Claim reporting exceeds the time-bar, often because logistics entrepreneurs are late in providing notification.

Insurance brokers like L&G Insurance Broker help ensure all these aspects are met before shipping. This way, the chances of a claim being rejected can be minimized.

The Vital Role of Insurance Brokers in the Land Logistics Industry

Understanding the risks of land logistics is no simple matter. This is where L&G Insurance Broker, an experienced insurance broker based in South Tangerang, comes in and offers strategic solutions. L&G’s role is not only to bridge the gap between clients and insurance companies, but also to:

1. Assess the risks of the type of goods, route and condition of the vehicle comprehensively.
2. Determine the most appropriate type of cargo policy with special All Risk and Road Transit Insurance coverage.
3. Negotiate the best premium with insurance companies for cost efficiency.
4. Providing full assistance in the claims process, from reporting to disbursement of funds.
5. Logistics Contract Audit, ensuring that Incoterms and liability clauses between parties are in sync with the insurance policy.

With the support of professional brokers, companies can obtain freight insurance that truly suits their needs and field conditions.

👉 Maximize your ground logistics protection. Contact L&G Insurance Broker now on 08118507773 to get the best protection recommendations before the risk occurs.

Types of Freight Insurance Suitable for Land Shipping

Not all cargo insurance policies offer the same coverage. The following are common types of coverage for land shipments, recommended by L&G Insurance Broker:

• Institute Cargo Clause (A): Comprehensive protection (All Risk) against all risks except those excluded (recommended for high value goods such as electronics or machinery).
• Road Transit Insurance: Designed specifically for truck deliveries on land routes, covers the risks of accidents, theft, and extreme weather (heavy rain/landslides).
• Theft and Pilferage Cover: Extended coverage for theft and pilferage risks that are prevalent on interprovincial routes.
• Loading & Unloading Risk Cover: Covers the risk of damage when goods are loaded and unloaded from trucks, eliminating the gap in logistics risks in the warehouse.
• Marine Cargo Insurance (MCI) for Intermodal: Used when land shipments are connected by ferry or barge (intermodal transport), ensuring continuous coverage without interruption.

With guidance from a cargo insurance broker, you can choose the most cost-efficient and effective policy for protection.

Risk Management Recommendations for Logistics Entrepreneurs

To minimize the risk of loss during land shipping, here are recommendations from L&G Insurance Broker that should be integrated with freight insurance:

1. Regularly audit the condition of the vehicle and driver (ensure roadworthiness and driver health).
2. Make sure the tracking system (GPS) is active during the trip and has a geo-fencing feature to detect route deviations.
3. Use standard packaging and load lashing (heavy duty lashing) to prevent damage due to shocks.
4. Review the logistics vendor contract with your insurance broker to define a clear limit of liability (LoL).
5. Implementing a Zero Tolerance Policy towards driver negligence and load security procedures.

The combination of the above protections ensures complete security against the risks of damage, loss and negligence during the distribution process.

Case Study: IDR 3 Billion Loss Due to Wrong Policy Selection

A distribution company in Bekasi suffered a major setback when one of its trucks caught fire due to an electrical short circuit. Electronic cargo worth Rp 3 billion was lost, and the insurance claim was denied because the policy only covered “collisions” and not “fires due to mechanical breakdown.”

Such significant financial losses could have been avoided if the company had used the services of L&G Insurance Broker. The broker would have ensured that all potential risks—including internal vehicle risks such as engine failure—were covered from the outset through an extended fire clause. This case demonstrates the importance of having a freight insurance broker who understands the highly varied nature of Indonesian land logistics.

Benefits of Using L&G Insurance Broker Services

Using L&G Insurance Broker provides many benefits for logistics and shipping businesses:

• Free risk analysis before shipment, identifying land logistics risk gaps.
• Access to a wide range of leading international and national insurance companies.
• Negotiate the best premium according to your needs, ensuring cost efficiency.
• Professional assistance until the claim is completed, guaranteeing fast disbursement of funds.
• Personal consultation for each type of goods and shipping route.

L&G is known as a trusted freight insurance broker in South Tangerang, with extensive experience in handling risks in the logistics, export-import, and infrastructure projects sectors.

👉 Contact L&G Insurance Broker now in 08118507773 for a free consultation before the risk befalls your business.

Conclusion

The fact that 27% of land shipments end in significant losses should be a stark warning to all players in the Indonesian logistics industry. Risks such as truck rollovers, container theft, or technical errors during land logistics can strike at any time, resulting in massive financial losses reaching billions of rupiah. Without proper protection through cargo insurance, every shipment is a major gamble, potentially wiping out years of profits and permanently damaging a business’s reputation with clients. Given the complexity of land logistics risks, financial protection is no longer an option but an absolute necessity for operational stability.

Effective protection can only be achieved with a freight insurance policy specifically designed for road risks—covering Road Transit Insurance, theft, and loading/unloading risks. Small errors in clause selection, such as relying solely on ICC Clause C or failing to include theft and fire coverage, are often the main cause of claim rejections. Therefore, professional assistance from an insurance broker like L&G Insurance Broker is key to success. Brokers help audit risks, tailor policies, negotiate the best premiums, and accompany clients until claims are resolved quickly and fairly.

L&G Insurance Broker, based in South Tangerang, has extensive experience managing risks in the logistics and land shipping sectors in Indonesia. With expert support and an extensive network, L&G is ready to ensure every shipment is safe, secure, and protected from potential financial loss. Don’t let a single incident wipe out your profits and business reputation. Act now because risks are unpredictable, but they can be anticipated.

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DON’T WASTE YOUR TIME AND SECURE YOUR FINANCIAL AND BUSINESS WITH THE RIGHT INSURANCE.

HOTLINE L&G 24 JAM: 0811-8507-773(CALL – WHATSAPP – SMS)

Website: lngrisk.co.id

Email: halo@lngrisk.co.id

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