What is cargo? Definition and examples
Cargo refers to goods or produce carried in a truck, van, airplane, train, or ship. We can transport cargo by land, sea, or air. The word freight has the same meaning. In this context, ‘produce‘ means things that have been made or grown, especially things connected with agriculture. For example, if the cargo is dairy produce, it could be cheese, yogurt, milk, cream, or butter.
We can also refer to livestock during transport, such as cattle, pigs, or chicken as cargo. When we transport humans, however, we refer to them as passengers or crew.
BusinessDictionary.com has the following definition of the term:
“All articles, goods, materials, merchandise, or wares carried onboard an aircraft, ship, train, or truck, and for which an air waybill, or bill of lading, or other receipt is issued by the carrier.
Initially cargo referred to freight on ships
Cargo originally only referred to a load on a ship. However, today we use it for any type of freight, including loads carried by airplane, motor vehicles, train, and ships or boats.
In most cases, transporters or shipping companies carry cargo for commercial gain. However, when emergency supplies are being carried to, for example, a disaster zone and the carrier is not making a profit, we might still refer to it as cargo.
Where does the word ‘cargo’ come from?
According to Etymonline.com, the word first appeared in the English language in the 1650 with the meaning “freight loaded on a ship.” It came from the Spanish word “Cargo,” meaning “burden,” which came from the Spanish word “Cargar,” meaning “to load, impose taxes.”
The Spanish word came from the Latin Word “Carricare,” which meant “to load a wagon or cart.” The Latin word “Carrus“ meant “wagon.”
Carrier insurance and cargo insurance
In most jurisdictions, carriers must carry a minimum amount of cargo insurance. People in the industry refer to it as carrier liability. However, carrier liability protects the carrier more than the cargo.
Most shippers, especially if their cargo is large, should take out cargo insurance to protect goods from damage, theft, or loss while in transit.
There is typically insurance coverage for the goods while they are in transit or being stored, until the buyer has them.
When insuring freight, it is important to read the small print, because most policies have limitations. In the US, for example, insurance for freight being shiped by truck does not provide protection against every type of loss.
Cerasis.com says the following regrading cargo insurance:
“Overall, it’s crucial for shippers to document their cargo’s value in case of disputes, losses, or damages. It may also be necessary to work with a lawyer and insurance agent to fully understand your policy and make sure you are protected.”
A voyage policy is a type of insurance policy that provides coverage due to unforseen risks to marine cargo.
Containers sometimes fall overboard or are released by sea vessels during severe storms.
In 2017, 130 million freight containers were transported by sea. According to the World Shipping Council, those containers held more than $12 trillions’ worth of cargo.
Out of that total, 10,000 containers fell into the sea due to high seas, severe weather conditions, incorrect stowage, and various types of accidents.
Ten thousand, out of 130 million, do not sound like that many. However, if they were your cargo it could be catastrophic. That is why insuring your merchandise is important.
In an article in Logistics Management, Rosemary Coates wrote:
“However, evaluating the need for and currency of cargo insurance coverage is often overlooked. Unfortunately, when disaster strikes, companies can be faced with potentially devastating damages.”
“Planning and evaluating the costs and benefits of various types of cargo insurance, deductibles, and the possibility of self-insuring should be included with your risk assessment processes and your annual strategic planning. At a minimum, your cargo insurance, or self-insurance, should be reviewed annually.”
International trade and security concerns
Governments across the world strive to try to make sure that cargo shipments coming in from abroad do not pose a security risk for the country. Many have introduced laws, which customs agencies administer, regarding the handling of cargo to minimize the risks of, for example, terrorism. Governments are also concerned about narcotics and weapons entering the country illegally.
Ever since the terrorist attacks of September 11th, 2001, the United States has been monitoring the cargo that enters the country much more closely. More than six million cargo containers come in through US ports each year.
According to Wikipedia:
“The latest US Government response to this threat is the CSI: Container Security Initiative. CSI is a program intended to help increase security for containerized cargo shipped to the United States from around the world. Europe is also focusing on this issue, with a number of EU-funded projects underway.”