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This is Part 2 of a 3 part series on Damaged Goods.  Read the first in this series.

While our Claims Department can help a client who has suffered from a loss, it shouldn’t come as a surprise that we don’t specialize in salvaging garbanzo beans, or markets for any other goods for that matter. We do have relationships with salvors all over the world. This is important because a company doesn’t want to pay to move damaged goods to another location for repurposing. We prefer to salvage the product wherever it is located. Particularly in a case like this, clients can be their own best resource.

With better relationships, one can get the best return. Additionally, most clients like to control their own brand domain and product. This is especially prevalent with high end brands that care very much about where their product is sold.  In the case of the garbanzo beans, the manufacturer already had good local relationships set up for secondary uses of their product.

How can you maximize profitability and/or eliminate loss?  Be strategic and plan ahead by identifying the best option for any compromised goods. Scope out channels that best fit your damaged cargo. Consider:

  • If goods are not suitable for the intended primary retailer or receiver, has a company identified a secondary market source they can reach out to directly?
  • Should they, instead, turn to a salvage dealer to handle the sale of the items to their contacts or even via online auction style sales?
  • If a higher-value goods, what value retailer would be a good venue to offer these items through?
  • How can your brand name best be protected?
  • What items would be ok to sell at a discount or dollar store?

When incidents occur, it’s good to act quickly and identify a means of disposing of the affected property. The longer it takes to determine the fate of the items, the more those items could potentially lose value and/or incur storage charges. Advanced planning helps the insured come through with the best possible outcome. If they are not willing to use secondary markets for fear of damage to their brands, then swift action can be taken for those items to be destroyed.


We try to encourage our clients to salvage as much of their damaged goods as possible, which can lessen the financial blow of the loss.

Some damaged goods are better for secondary markets than others

We try to encourage our clients to salvage as much of their damaged goods as possible, which can lessen the financial blow of the loss. For example:

  • Coffee coming from a very humid environment that’s packed at too high of a humidity content and becomes soggy can’t be sold as Grade A coffee. However, it can be redried and ground and sold to a value brand that can blend it with other ground coffee grades.
  • Giant rolls of paper whose edges get damaged from being picked up or moved, if no longer suitable for its intended user, can be cut down and respooled for another buyer.
  • Olive oil that’s coagulated during shipping because of temperature fluctuations and loses its taste can be blended into very marketable products at a lower price point.

There are, however, certain types of commodities that are more challenging to salvage for a secondary market than others.

  • Anything that goes in or on a person’s body in terms of food or medication, as it may cause adverse effects and cause product liability. These items are subject to strict regulations and guidelines for potential repurposing.
  • Anything that has a brand reputation, such as watches or “designer label” apparel.
  • Geographies can be challenging. Depending where the cargo is damaged, the local market may not have ideal resale opportunity because the items are not desirable there.
  • Anything that hasn’t cleared customs can be problematic because the reduced value of the goods may not justify the cost of taxes due on them.

About the Authors

Andrew D’Alessio is XL Catlin’s Ocean Cargo Product Leader in the Americas. Andrew Bumstead is Large Loss Specialist for Marine, North America. Have the potential for some spilled beans of your own? Reach out to Andrew at to discuss our available insurance solutions.

Look forward to our next article, when we will discuss what happens when true loss happens and salvage occurs.   Read the first in this series here.

  • About The Author
  • Americas Ocean Cargo Product Leader,XL Catlin and Andrew Bumstead,Large Loss Specialist for Marine,North America
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