Receiving an email or phone call from an upset customer about damaged freight is never a positive experience for you as a shipper. You may believe that a freight claim is intended to solely recover losses from the damage – butit does not always cover additional lost revenue. However, there are times and specific types of freight claims that can cover these ancillary expenses.
In this blog post, we'll outline some of the facts about freight claims. We also introduce 4 of the most common freight claims submitted by shippers.
What is a Freight Claim?
Officially, a freight claim is defined as a legal demand submitted by you or a 3PL on your behalf to a carrier for financial reimbursement on the loss or damage of a shipment. And there are a variety of freight claim types. More specifically, four of them. These names simply indicate the type of claim. They include titles such as shipping claims, cargo claims, transportation claims, or loss and damage claims. The intent of a freight claim is to have the carrier resolve the matter to the point that the initial terms noted on the Bill of Lading has been fulfilled. A freight claim recovers loss. However, it is not to reimburse lost profits.
However, there are some exceptions to this general rule.
While the freight claim is intended to recover damages, you may want to go the extra effort by protecting your products with freight insurance. The problem is that there are no policies or standard policies that a carrier can secure due to the Carmack Amendment or common law. In fact, clarifying your level of insurance protection with your carriers is vital.
What are the Most Common Freight Claims Shippers File?
Aside from common freight claims, you may also file for four specific types of freight claims more frequently than others. Those four freight claims include the following:
- Damage Freight Claims: The most popular type of freight claim is the "damage" claim. Under this filing, the freight arrives at its destination damaged. The damage must be visible and noted on the bill of lading or proof of delivery paperwork.
- Loss Freight Claims: The second most popular freight claim is one that attempts to recover "loss". This happens when freight is picked up from a shipper but never delivered. To prove this type of claim, the original bill of lading needs to verify a pick-up by the carrier.
- Shortage Freight Claim: The shortage claim is similar to the loss freight claim, but in this instance, it refers to the recipient receiving partial loads. An example of this is if two pallets with 50 boxes total were shipped, but only 25 were received by the recipient. This is why it's critical for shippers and recipients to verify the count of items listed on the BOL.
- Concealed Damage or Shortage Freight Claim: Of the top 4 freight claims, this is the one that is the most difficult to obtain from a carrier – simply due to the fact that it's hard to notate on a bill of lading upon receiving of the freight. A concealed or shortage claim occurs when the receiver is opening a box or container and discovers damage inside or missing components.
With each of these claims, the key is ensuring the shipment is accompanied by proper and accurate records. Auditing your freight records and documenting the movement and receiving of products helps build a stronger foundation for any claim. It's also important for receivers to take the time to open and inspect the freight. By doing such, they can discover hidden damage, and have the driver notate this on the Bill of Lading (BOL).
Final Thoughts
One way that you can reduce the headaches of freight claims is by partnering with an experienced 3PL.
Professional 3PL companies should understand the complexity of filing freight claims. Furthermore, they should know how to minimize damage by proper packing, loading, and working with experienced and dependable carriers.
Still need a little help reducing or filing claims? Reach out to the team here at Redwood Logistics and let us help you get back on the right track!