{"id":94195,"date":"2026-02-19T05:18:02","date_gmt":"2026-02-19T08:18:02","guid":{"rendered":"https:\/\/shipping.einnews.com\/article\/893648718\/wYPUg6sZYxY_8cix"},"modified":"2026-02-19T05:18:02","modified_gmt":"2026-02-19T08:18:02","slug":"freight-forwarders-hit-by-double-blow-as-client-insolvencies-bite-and-cargo-theft-rises","status":"publish","type":"post","link":"https:\/\/new7.shop\/zerocostfreehost\/index.php\/2026\/02\/19\/freight-forwarders-hit-by-double-blow-as-client-insolvencies-bite-and-cargo-theft-rises\/","title":{"rendered":"Freight forwarders hit by double blow as client insolvencies bite and cargo theft rises"},"content":{"rendered":"

A wave of counterparty failures is threatening to overwhelm freight forwarders and their insurers<\/a> as economic turbulence, trade fragmentation and rising insolvencies converge across global supply chains.<\/p>\n

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TT Club, the mutual liability insurer focused on protecting the global supply chain, has urged logistics operators to adopt stronger credit risk management strategies immediately \u2013 warning that the sector faces exposure to client default.<\/p>\n

Mike Yarwood, managing director of loss prevention at TT Club, outlined the situation to Insurance Times<\/em>: \u201cThe freight forwarder would purchase freight on behalf of their customer. The customer goes insolvent and does not therefore pay the freight account. That, in a nutshell, is the risk.\u201d<\/p>\n

The scale of this problem described by Yarwood is supported by official data.<\/p>\n

According to UK government statistics published in April 2025, nearly 2,000 British businesses entered insolvency in March 2025 \u2013 this number of registered company insolvencies is 9% higher compared to the same month in the previous year.<\/p>\n

Joe Shaw, director of claims at the International Underwriting Association (IUA), confirmed that the trend seen by Yarwood had been building for some time.<\/p>\n

He said: \u201cThere was an expectation that following the Covid-19 pandemic, we\u2019d see a huge raft of insolvencies \u2013 that seems to have taken a bit longer to take effect. We are now seeing projections where that\u2019s going to increase.\u201d<\/p>\n

Shaw added that there was \u201cdefinitely an assumption\u201d across the insurance community \u201dthat insolvencies have increased across the board of companies worldwide in 2025 and are projected to increase in 2026\u201d.<\/p>\n

A different kind of default<\/h3>\n

Yarwood was keen to stress, however, that the losses his members were experiencing were not driven by deliberate wrongdoing, in his view.<\/p>\n

He said: \u201cI don\u2019t think [insolvencies are] necessarily [caused by] bad actor behaviour. Customers are living in a more difficult landscape today than they perhaps were 18 months or two years ago. They\u2019ve been living in quite a dynamic world, taking decisions to either accelerate shipments or pause shipments [while] waiting for certainty.<\/p>\n

\u201dThe global economic landscape is unlikely to stabilise any time soon, so freight forwarders must be prepared for their customers to default.\u201d<\/p>\n

Providing an example of this \u201dmore difficult landscape\u201d, a global survey by Allianz Trade \u2013 published in May 2025 \u2013 found that 42% of companies worldwide expected a notable decline in export revenues following the changes to US tariffs introduced by president Donald Trump in April 2025, with associated export losses projected to reach $305bn (\u00a3222.6bn) in 2025.<\/p>\n

This quantifies the economic friction that Yarwood described and demonstrates tangible consequences to supply chain volatility.<\/p>\n

Yarwood continued: \u201cOne of the manifestations [here] is that the goods arrive in the destination country and there\u2019s no one to collect it.\u201d<\/p>\n

Emma Rice, partner at law firm Clyde and Co, said recovery prospects were bleak once a counterparty failed in the manner Yarwood outlined.<\/p>\n

She said: \u201cOnce a counterparty fails, cargo is usually sold on a salvage basis to specialist buyers [that] purchase goods strictly \u2018as is\u2019 \u2013 rather than through normal commercial channels where full market value might be achieved. Significant storage, handling and disposal costs often accrue while the cargo is being held or processed, further eroding what can ultimately be recovered.\u201d<\/p>\n

Yarwood agreed. He said: \u201cAdministrators will come in, but the likelihood of there being enough cash to satisfy all those outstanding debts is slim.\u201d<\/p>\n

Cargo feels geopolitical shock first<\/h3>\n

For Shaw, these cargo considerations act as the fastest transmission mechanism through which geopolitical volatility hits the insurance market.<\/p>\n

He said: \u201cIn the cargo and the marine cargo market, you see a very direct and immediate impact [from geopolitical situations]. When you get a big global shift, it moves where ships are going to dock, potentially can cause huge delays and that\u2019s where you will see cargo losses.\u201d<\/p>\n

He added that trade tariffs were \u201ca great example of where you will see the financial value of what you\u2019re shipping\u201d, noting that these arrangements might make it \u201cmore financially viable to reroute that ship and take it somewhere else\u201d.<\/p>\n

Yarwood echoed this point. He said: \u201cGeopolitical issues are obviously having an effect. Maybe a shipper\u2019s business model is to ship to Country A \u2013 all of a sudden we can\u2019t ship there anymore. We\u2019re having to find different routes, maybe different modalities, which is going to put pressures on.\u201d<\/p>\n

For brokers<\/a> and underwriters, this challenge is compounded by the reality that standard cargo policies may not respond to credit driven losses.<\/p>\n

Yarwood said: \u201cThe standard liability policy probably wouldn\u2019t pick up credit risk. If you\u2019re a freight forwarder working for anyone [that] presents opportunities, then maybe your credit risk is larger.<\/p>\n

\u201cThe greater risk is those ad hoc shipments for lesser known shippers. Somebody approaching out of the blue wanting to move 20 containers from A to B. What seems like a hugely lucrative opportunity \u2013 if it seems too good to be true, it probably is.\u201d<\/p>\n

Theft threat<\/h3>\n

Meanwhile, organised cargo theft<\/a> is adding to insolvency pressure. <\/p>\n

Research published by cargo theft prevention and recovery business Verisk CargoNet in January 2026 revealed that cargo theft losses in the US and Canada increased by 60% between 2024 and 2025 due to organised criminal groups homing in on high value shipments.<\/p>\n

Losses associated with supply chain crime in these jurisdictions amounted to $725m (\u00a3529m) in 2025, with the average value per theft rising to $273,990 (\u00a3200,000) \u2013 up 36% from $202,364 (\u00a3147,710) in 2024.<\/p>\n

Verisk CargoNet additionally recorded 3,594 supply chain crime events across the US and Canada in 2025, with incidents involving confirmed cargo theft increasing 18% year-on-year from 2,243 in 2024 to 2,646 last year.<\/p>\n

Yarwood said: \u201cToday, criminals are far more sophisticated. They have vast amounts of intelligence. They know exactly which cargoes are in which trailers. They\u2019re not stealing a few cases anymore \u2013 they go with the absolute intention of stealing everything.\u201d<\/p>\n

Rice added: \u201cEconomic pressure is certainly driving more claims, but it\u2019s also contributing to a rise in opportunistic thefts as operators and subcontractors come under strain.\u201d<\/p>\n

A new reality<\/h3>\n

Shaw offered far-reaching assessment on these amalgamating factors impacting the cargo and freight industry.<\/p>\n

He said: \u201cThe isolationism and the pressure on supply chains is a shift that\u2019s here to stay. We\u2019re moving from a more globalised world, where everything was interconnected, to an environment where a lot of those connections are being shut down. That does increase the cost of claims<\/a> in general, just because there is more friction there. It\u2019s just a new reality.\u201d<\/p>\n

For Yarwood, the answer to this challenge is grounded in business fundamentals. He said: \u201cKnow your customer \u2013 know who they are, what they are, their trade history. There can\u2019t be enough emphasis put on the importance of knowing your customer. In the digital world, those principles have been diluted.\u201d<\/p>\n

Rice added that the time for proactive intervention in this marketplace was now.<\/p>\n

She continued: \u201cIn a market where insolvency risk is rising, early intervention, contractual clarity and disciplined monitoring are becoming essential tools for protecting both operators and their insurers.\u201d<\/p>\n

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