Freight Forwarding & Incoterms: Key Terms Explained in Detail

A valuation charge is an additional fee applied when a shipper declares the cargo value higher than the standard liability limit accepted by the carrier. Carriers usually operate with a capped liability for loss or damage, as defined by international conventions or contract terms. When the declared value exceeds this limit, the carrier charges a valuation fee to account for the increased financial risk. This allows the shipper to secure higher coverage directly through the carrier.

By paying a valuation charge, the shipper ensures that the carrier’s liability aligns more closely with the actual value of the cargo. This is particularly useful for high-value goods where standard liability may be insufficient. The declared value must be clearly stated in the transport documents. This declaration forms the basis for calculating the additional charge and potential compensation.

Valuation charges differ from insurance premiums. While insurance transfers risk to an insurer, a valuation charge increases the carrier’s responsibility for the cargo. Shippers often evaluate both options to decide whether to declare a higher value with the carrier or obtain separate cargo insurance. Each approach has different cost and coverage implications.

Overall, valuation charges provide a way to increase carrier liability when transporting high-value cargo. They offer added financial protection, improve transparency, and ensure risk is appropriately priced. For shippers, understanding valuation charges helps in making informed decisions about cargo protection.