The 4 Most Common Freight Claims Submitted by Shippers
Receiving an email or phone call from an upset customer about damaged freight is never a positive experience. Whether the damage occurred in transit, due to poor packaging, erratic driving, or other sources outside of your control, freight damage can cause more than just upset customers. Many shippers believe that a freight claim is intended to solely recover losses from the damage – but does not always cover additional lost revenue. However, there are times and specific types of freight claims that can cover these ancillary expenses.
In the information below, we’ll outline some of the facts about freight claims, and introduce 4 of the most common freight claims that are submitted by shippers – that may help them recover lost revenue due to negligence of others.
What is a Freight Claim?
Officially, a freight claim is defined as a legal demand submitted by a shipper or a 3PL on their behalf to a carrier for financial reimbursement on the loss or damage of a shipment. In some instances, a freight claim is also referred to 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 is intended to recover loss – not to reimburse lost profits – however, there are some exceptions to this general rule.
While the freight claim is intended to recover damages, some shippers go the extra effort by protecting their 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. Due to this fact, it’s vital for shippers to clarify with their carriers about the extent or level of insurance protection they hold.
What are the Most Common Freight Claims Shippers File?
In recent years, shippers have been filing 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 to its destination damaged and is discovered either in-route or at the point of delivery. The damage must be visible and noted on the bill of lading or proof of delivery paperwork in order to be filed under this status.
- 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 the point of destination. To prove this type of claim, the original bill of lading needs to verify a pick-up by the carrier, but the proof of delivery is not signed by a recipient.
- 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 vs. what is actually received.
- 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 recipient 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 common freight claims, the key is to ensure each shipment is accompanied by proper and accurate records about the movement and receiving of a shippers products. It’s also important for receivers to take the time to open and inspect the freight – to discover hidden damage, and have the driver notate this on the Bill of Lading or proof of delivery slip. By taking these simple actions, a shipper can expedite the filing of freight claims and ensure timely fulfillment.
One way that a shipper can reduce the headaches of having to complete these type of freight claims is trusting an experienced 3PL to manage their logistics and supply chain functions. Professional third-party logistics companies understand the complexity of filing freight claims, but also know the secrets to reducing damage by proper packing, loading, and working with experienced and dependable carriers.