Why does declared value matter?
The declared value sets the basis for several costs at once. It determines how much a carrier is liable for if the cargo is lost or damaged, how much cargo insurance costs, and how much customs duty is due. Declaring too low a value to save duty or insurance premiums can lead to fines, seizure, and a claim being reduced or refused. Declaring too high can result in overpaid duties and insurance.
What is the difference between declared value and shipping insurance?
Declared value is the amount a shipper states as the worth of the goods. It is written on the commercial invoice and transport documents, and it is used by customs authorities to assess duties and by the carrier to set liability limits. Declared value does not itself pay out anything if goods are lost or damaged.
Shipping insurance is a separate contract with an insurer that pays the shipper if cargo is lost, damaged or stolen in transit. The premium is usually calculated as a percentage of the declared value, so the declared value determines how much cover is available and what the policy costs. In short, declared value is the figure you state, and shipping insurance is the financial protection that uses that figure to pay a claim.
Shipments and operations that use declared value
- International road freight with CMR documentation
- Sea freight with bills of lading
- Air freight and express courier shipments
- Import and export customs clearance
- Cargo insurance and claims
- High-value and fragile goods transport
- Cross-border e-commerce parcels
- Freight forwarding and customs brokerage
Example in practice
A machinery exporter in Turin, Italy ships industrial pumps worth €45,000 to a buyer in Lyon, France. The commercial invoice and CMR consignment note both state a declared value of €45,000. The carrier uses this figure to set the insurance cover for the load. At the French border, customs officers compare the declared value with the invoice and the purchase order. The value matches, so the shipment is cleared without delay. If the exporter had declared €20,000 to reduce the insurance premium, the mismatch would have been flagged and the shipment held pending investigation.