April 9, 2021

Insurance basics: Hauling intermodal


Connect with an insurance agent who understands UIIA endorsements

Planning to haul intermodal containers and chassis?

Remember to secure basic coverages before heading to ports or railheads. Reliance Partners Vice President of Sales Arvin Castellanos and Senior Account Manager Kelly Teg detail the insurance basics involved in intermodal hauling.

Intermodal refers to the transporting of freight via an intermodal container using more than one mode of transportation: ship, rail and truck. This freight is most often made up of large-scale boxes stacked on trains or boats and brought to their locations via trucks.

Through this process, freight is not actually handled while changing modes, as it remains enclosed in the intermodal transport container. This makes this form of transport highly secure and less susceptible to damage.

It should be noted that coverage tailored to intermodal requires auto liability coverage to include hired auto, trailer interchange, and general liability with additional insured or blanket additional insured included. Cargo coverage must also have intermodal containers listed as types of commodities in order to satisfy the varying UIIA endorsement requirements of insurance carriers.

Once coverage is in place, the next step is to purchase a Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) certificate. Motor carriers without this certificate, risk denial into a port or rail yard.

What is UIIA? It’s a standard industry contract among truckers and drayage companies, water and rail carriers, and leasing companies (equipment providers). The program is administered by the Intermodal Association of North America (IANA) and covers liability and other issues related to the interchange of intermodal equipment between the two parties.

It’s common for insureds new to intermodal to choose the most affordable insurance carrier, but Castellanos warns that the lowest price isn’t always advantageous. He advises fleets and owner-operators to carefully assess whether the plan satisfies UIIA requirements.

“When it comes to UIIA, you need to find an insurance agent that knows what they’re doing, because not all insurance companies can do UIIA,” Castellanos said. “[Without proper guidance], it’s easy to make a mistake, but it’s hard and costly to correct it once it is bound.”

Furthermore, an additional insured or UIIA endorsement must be included with trailer interchange coverage, as Castellanos notes that many equipment providers require that drivers meet certain coverages and stipulations before hauling their chassis.

Teg recommends that insureds obtain a Standard Carrier Alpha Code (SCAC), a four-letter code used to identify your company in both the UIIA and Equipment Providers (ocean carriers/railroads/leasing companies) databases. She said that providing this code to insurance agents allows them to fill out the UIIA certificate with the necessary insurance information on behalf of the motor carrier or owner-operator.

UIIA offers a quick reference guide for completing paperwork for its agreements, which can be accessed here. Motor carriers can use the Form 5C equipment provider list to specify whom they plan to work with. Teg suggests filling this out helps the insurance provider determine trailer interchange limits during the quoting process, as limit requirements vary from company to company.

Castellanos also makes it clear that shippers in UIIA prefer not to associate with risk retention group carriers.

“One Hundred percent of the time they prefer A-rated carriers,” Castellanos said. “You can get away with working with a B or B-plus carrier, but when it comes to risk retention companies, the client is going to limit itself to only a select few equipment providers. When that happens, they lose opportunities to make more money, because they’re limiting themselves working with only certain carriers and equipment providers.”

He continued, “If you go with a risk retention group as your carrier, then know that you’re going to be limited to work with only these companies. However, if you get an A-rated carrier, it might cost you $1,000 to $2,000 more annually per truck, but you’re going to have a higher chance of working with other companies that’ll accept you without any questions asked, as long as you have the minimum limit requirements that they’re asking for.”

Questions surrounding UIIA registration and requirements are common among new insureds, according to Castellanos. However, Teg directs her clients to IANA’s frequently asked questions (FAQs) section, stating that it does a good job of answering most basic questions.

After securing proper insurance and a UIIA certification upfront, you’ll be ready to hit the road. But keep in mind that intermodal hauling has many quirks, which means that learning how to mitigate its countless risks is crucial throughout your career.

Remember that you’re hauling leased equipment, so always inspect the chassis for damages before carrying it away. Hauling inoperable equipment risks racking up vehicle maintenance violations, which can reflect negatively on your Central Analysis Bureau (CAB) score — and may also result in increased renewal premiums the following year, Teg and Castellanos explained. The last thing you want is problems upon leaving the yard, so don’t be afraid to voice your concerns with the lessor.