Cargo Claims 101

Your freight is important and you trust your chosen carrier to get it to the destination in the same perfect condition it picked up, but we all know drivers are only human and accidents happen—and when they do you file a dreaded cargo claim.

Nobody wants to deal with cargo claims and the hassle that comes with them. However, there are some things you can do to avoid cargo claims and a few tips and tricks to help you win your claims when you do have to file them.

How do I avoid cargo claims?

Properly packaging your product can make all the difference in the world. Chances are your freight is going to shift in the truck during transit so your packaging should protect against that. For example, if an exterior scratch compromises the integrity of your product ensure your packaging covers all surfaces. It is advisable to follow the NMFC packaging guidelines for your commodity. It sounds simple, but it is your best bet at doing your part to keep your product safe.

To help avoid losing out on shortage claims make sure you put your actual product count on your BOL. If your BOL simply states pallet amount or says “said to contain” you will have a hard time winning a shortage claim. If your BOL states 1 pallet, and one pallet delivers, the carrier feels they have successfully done their job. If you get more specific and state 7 boxes on 1 pallet on your BOL then it makes it much easier to hold the carrier accountable if any of those boxes on your pallet are missing.

If you are shipping separate pieces be sure to label every piece. This helps to ensure every piece is delivered to the correct location and will help eliminate lost shipments and shortage claims.

When you are shipping multiple pieces on a pallet be sure to properly secure all pieces. This will also help to eliminate shortage claims.

Always examine your freight when it arrives!

This is so important and should be stressed to your consignee if you are the shipper. The freight should be inspected before it is signed for. You should be checking to ensure all your pieces have arrived and arrived unscathed. However, in the unfortunate instance where you freight is short or damaged you should notate it directly on the delivery receipt at time of delivery. This lessens the burden of proof you must provide when filing your claim. Make sure you are writing the word “damage.” Writing “subject to inspection” is not sufficient in proving a claim was damaged on arrival.

You can still file a claim without this notation but it becomes what is called a “concealed claim”. This kind of claim should be filed with the carrier within 5 days. Filing a concealed claim past that mark of 5 business days makes winning your claim very difficult.

What should I send to the carrier when I file a claim?

Your best bet is to send everything you have. A claim form outlining what was damaged and the sale value, product invoice, delivery receipt, and pictures of the damage are a must. Pictures of the damage are left out a lot of the time and nowadays everyone has a high-resolution camera in their back pocket so there is no reason not to get that documentation.

What should I do with my damaged freight?

It is essential to hold on to that freight. If you don’t have room to store damaged freight, refuse the shipment. If you salvage your freight while your claim is still open, especially before the carrier has had an opportunity the inspect, you have made your job of winning your claim more difficult. If your damaged freight cannot be repaired the carrier may want to pick up the damaged freight and salvage it themselves.

The carrier denied my claim—now what? 
Most of the time when you file a claim you will receive a denial letter. That doesn’t mean you’ve lost—that just means you’ve got to keep fighting. Below are some common denial reasons and a good place to start in your rebuttal.

Insufficient Packaging – If a carrier denies your damage claim with the reason of insufficient packaging you should most definitely fight back. If the driver thought the packaging was not sufficient at the time of pickup the freight never should have been picked up. As soon as the that freight was loaded onto the truck the carrier became responsible for it.

Clear Delivery – This just means that the delivery receipt was signed free and clear. If you filed your claim as concealed, while harder to win, a clear delivery is not a good enough reason for denial. You filed the claim as concealed, which means you were fully aware the DR was clear. Fight back.

Mitigation – Often a carrier will deny a claim unless the cost of the claim is mitigated. The shipper is responsible to do their part to minimize loss. This could be offering a scrap allowance, repairing the goods rather than scrapping it completely, or selling the damaged good at a discounted price. These three things will help lessen the amount of your filed claim.

It’s tough, but you’ve got this.

Cargo claims is a vast world that is far more complicated than one blog post could cover entirely but this is a good starting point for understanding some of the hurdles that will present themselves when going through the process of trying to win your claim. For a more in depth understanding of the world of claims the book Freight Claims in Plain English is a great tool as well as becoming familiar with the Carmack Amendment, which includes rights, responsibilities, and duties of carriers and shippers when dealing with cargo claims.

Stay tuned for a follow up post explaining the Carmack Amendment and its relationship to cargo claims.

Here at Freightview we care about you and your shipments. Give us a chance to make life a little bit easier and try out a risk free trial today.