Freight damage claims: best practices to improve your claims process

Cargo Claims

Freight damage claims: best practices to improve your claims process

Receiving damaged freight is another logistics process. A very inconvenient one at that. Having a set procedure for your claims handling will ease your pain in the face of unexpected freight damage. This article aims to provide you with some valuable insights into the claims process. Let’s start by defining…

What’s a freight claim?

A shipping claim, cargo claim, logistics claim… They are all one and the same. A freight claim is a legal demand by a shipper or consignee against a carrier having broken the terms of their contract. As a consequence, the claimant seeks financial reimbursement for a loss or damage to their cargo. However, you can’t assume that the carrier is always liable for damage to your cargo.

What are your responsibilities as a shipper?

There are plenty of variables that can have an impact on your consignment during transportation: weather, warehousing conditions, special handling requirements, to name but a few.

Your carrier won’t be liable if the damage results from your failure to:

Pack the cargo properly
Label the packaging correctly
Provide accurate descriptions on the shipping documents

It’s your responsibility to establish that the goods were given to the carrier in good condition and delivered damaged. Only if you’re able to prove that you kept your end of the deal, will the carrier be held liable for your claim.

Which types of freight damage claims are there?

Visible damage

The damage is readily apparent upon delivery.

Concealed damage

This is damage discovered after the delivery driver leaves, and the cargo is un-palletised or cartons are opened. Although this article focuses on freight damage claims, you may also experience:

Loss

Your cargo is missing in action. It was picked up but got lost in transit.

Shortage

You only receive part of the shipment you were expecting.

Now, let’s get to the gist of freight damage claims.

What should you do when damage is found at the time of delivery?

Check each unit for signs of damage.
Open any packages showing visible signs of damage while the driver is present.
Record an exact description of the damages on the Bill of Lading (B/L) or Proof of Delivery (POD).
Take photographs.
Have the driver sign your copy of the delivery receipt.
Notify the freight carrier and report damage.
Store the damaged goods and packaging, as the carrier is entitled to inspect them.

What should you do when damage is found at the time of delivery?

Concealed damage freight claims are damages that aren’t noticeable at delivery (e.g., a product shifting in the packaging).

First and foremost, make sure not to give the driver a “clean receipt”, which would imply no damages occurred while the goods were under the carrier’s responsibility. Instead, mark “pending further review” on the POD.

If you see anything that may point to mishandling (e.g., holes, stains, torn packaging), note it on the delivery receipt. That way, if concealed damages are found subsequently, you’ll be able to prove that something was wrong with the delivery from the start.

And, needless to say, respect the claim time limits. If you take any longer than 5 days, your claim will be void.

How to file a freight damage claim?

If you did your homework upon receipt or inspection of the damaged goods, lodging a claim against the carrier will be a piece of cake.

1. Submit a written claim to the carrier

Provide information allowing to identify the cargo.
Assert liability for alleged loss.
Demand payment of a certain amount of money.

2.Provide all supporting documents

B/L or POD.
Photos of the actual damage.
Original invoice showing the costs paid for the cargo.
A repair estimate (if applicable)

Now, let’s say you follow all these guidelines. You count on receiving full reimbursement. Until the bubble bursts. You get a freight claim declination letter and wonder…

What’s the reason leading to my freight damage claim being denied?

It could be due to:

• Incomplete or inadequate documentation

For example, an illegible invoice. This sort of issue can be easily solved by submitting the information requested by the carrier.

• Clear POD

If there’s no notation of damage on the proof of delivery, it is understood that the freight was received in good condition. The carrier will be entitled to decline the claim.

• Act or omission of the shipper

Imagine your cargo is hazardous material, and it wasn’t packaged and labelled as such. Any damage arising during transit would be your fault, so you wouldn’t be entitled to receive any reimbursement.

• Act of God

Let’s face it: volcanic eruptions, earthquakes and tornadoes are beyond all human control, so the carrier could not be held liable for any damage to your cargo under those circumstances.

• Freight bill unpaid

Your carrier won’t accept your claim if your freight invoice is outstanding.

• Mitigation

It’s your responsibility to mitigate the claim insofar as possible, whether it be by repairing the item, selling it at a discount or returning it to the supplier. Failure to do so may lead to your freight damage claim being denied.

After reading this article, you may be thinking: “Wow, a freight damage claims process is a lot to handle!”
Save yourself the trouble by relying on Marlin Blue’s expert team to deal with your claim. Check out our success stories to find out how working with us will give you the upper hand in the face of freight damage claims.