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Declared Value in Shipping: Limits, Risks, and Best Practices

When shipping goods across town or around the globe, you have likely stumbled upon the term “declared value.” It often appears on customs forms and shipping documents, yet many shippers are unsure of its meaning. Understanding the declared value is essential as it directly impacts duties, insurance, and liability.

What is declared value?

It’s the value a shipper assigns to their goods, separate from the market price. This value determines carrier liability and customs duties. For carriers, it sets the maximum amount they will cover if a shipment is lost or damaged.

For example, if you declare your guitar at $300 and it arrives broken, the carrier is responsible for that amount—no more, no less.

In international shipping, customs use this number to calculate duties. If you declare your $200 headphones accurately, they move through smoothly. If not, expect delays.

Limits of declared value

It defines the maximum coverage you can claim when shipping. Major U.S. carriers like USPS, UPS, and FedEx set a default, typically $100 if you don’t declare a higher amount. UPS and FedEx offer coverage up to $50,000 based on the shipment type and destination. USPS, on the other hand, caps at $5,000.

When and why to declare value?

You should opt for an accurate value declaration when your shipment’s value exceeds the carrier’s default liability coverage, often just $100. It is a no-brainer for pricey gadgets, delicate glassware, or anything thieves might target.

Who files the declaration?

When shipping from China to the U.S., the importer of record/shipper must accurately submit the declared value to U.S. Customs and Border Protection (CBP). Without it, your shipment won’t clear customs.

CBP determines the cargo’s value, even after the importer provides a figure. If a customs broker handles your shipment, they may be responsible for filing this declaration.

Declared value vs. other shipping terms

Declared value vs. customs value

Declared value is what the shipper claims a shipment is worth, while customs value is what a customs officer determines based on documentation and assessment. Typically, customs value starts with the declared amount, but discrepancies can lead to issues.

If the declared value is too low, customs may flag it as under-declaration or fraud. If it’s too high, you could overpay duties and taxes. To avoid penalties and delays, ensure consistency between declared and customs values by providing accurate invoices and supporting documents.

Declared value vs. shipping insurance

Declared value: The shipper assigns a value to the package, which limits the carrier’s liability. Most carriers set a default of $100 per package and cap coverage at $50,000, though limits vary. A higher declared value may increase shipping costs.

Shipping insurance: It covers the shipment’s full value beyond the carrier’s liability. Shippers pay an additional fee based on the insured amount, securing protection against damage, loss, and theft. Claims generally go through the insurance provider, not the carrier.

Freight insurance ensures comprehensive protection, making it a smart choice for expensive or delicate items.

When to use

Stick with declared value if you:

  • Ship low-value items (under $100)
  • Send only a few shipments and don’t require extra protection

Upgrade to shipping insurance if you:

  • Ship high-value goods (over $100)
  • Ship large volumes regularly
  • Handle fragile items prone to damage
  • Send packages internationally, where risks like loss or theft increase

Delivering your shipments safely and on time

Airsupply provides efficient logistics solutions for high-value goods and hazardous materials. By choosing the fastest, most secure routes, we minimize handling and reduce the risk of human error.

For added protection, our comprehensive shipping insurance starts at just 0.5% of the cargo value, covering all carriers and service levels. With Airsupply, your shipments are always in safe hands.

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