4 Things to Know When Handling Freight Claims

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Anthony Hernandez, Claims Manager at GlobalTranz, put together a comprehensive article regarding the prominent guidelines to navigating cargo freight claims.  Here is a quick summary from his article on the four (4) key points to remember when handling these claims:

In order to avoid freight claims, it is important to choose a carrier based on their quality of service.

Choosing a carrier not on the potentially inexpensive price, because less is not more when it comes to cost. Small savings now can lead to heavy payouts if things go awry with your carrier.  Using common sense when packaging your products for shipping also saves in the long run; find packaging that fits your items properly, including by weight, and utilize a container that can withstand the common wear and tear of transportation. When adding address labels to your shipments, do so appropriately by placing the labels on flat surfaces on the top of the container.

If a claim occurs, remember that precision is key when recording damages.

Take specific notes and also pictures, if possible. Keep the freight with the shipper or the consignee and not with the carrier, seeing as the carrier will charge for freight storage. To speed the process up, make sure to ask the carrier to look at the damage when it arrives. Concealed damages must be reviewed by the carrier within 5 days of delivery. If they refuse, secure a waiver of inspection from the carrier.  Make this request no matter how low in cost the damage appears to be; it is wise to have this on record. In order to support your claim, you will need to prove the freight was in good condition when shipped, prove it was damaged upon delivery or not delivered, and be able to show that the product is damaged and/or missing. Make sure to include proper documentation when filing a claim, especially a signed delivery receipt from the driver.  Remember that you must pay the freight bill in order for the contract to hold, otherwise you will not have the grounds to file a claim.

There are some potential reasons carriers may decline claims.  

The Carmack Amendment includes five defenses that carriers may use to decline liability including: Act of God, Public Enemy, Act or Default of Shipper, Public Authority, or Inherent Vice/Nature of the Goods Transported.  If the shipment is improperly or insufficiently packaged, the carrier will repudiate the claim. In the case of insufficient evidence to prove the carrier is responsible, the claim will be denied. It is important to note that the carrier ships the containers that the products are packaged in; they are responsible for the amount of containers to be shipped, not the count of the individual items inside of the shipping receptacle. Count the freight with the driver if that is possible.

There are a few methods to increase the efficiency and speed of handling freight claims.

For example, if the carrier requests additional information regarding the claim, provide it in a timely manner. Be proactive; collect as much information as you can in the beginning, so that when the carrier asks for clarification, you are ready to respond. It is important to note that the shipper is responsible to mitigate the freight through salvaging, discounting, or repairing the commodity in question. If the carrier pays the claim, they may also have rights to the salvage. Also, be sure to purchase shippers Interest Insurance.

 

By staying ahead of the game and remaining in the know, you can eliminate surprises in the future that may cost your company money.

 

For more information, check out the full article at: https://www.globaltranz.com/blog/navigating-cargo-freight-claims/