A Freight claim is a legal demand by a shipper or consignee to a carrier for financial reimbursement for a loss or damage of a shipment. Freight claims are also known as shipping claims, cargo claims, transportation claims, or loss and damage claims.
Contents
- Filing a Freight Claim
- Filing Deadlines
- Consignee and Shipper Responsibilities
- Carrier Liability
- References
The intention of a freight claim is for the carrier to make the shipper or consignee “whole” – that is to say, their position is as good as it would have been if the carrier had carried out their tasks according to the Bill of Lading. For this reason, claimants are generally expected to file a claim to recover their costs, not including profits, although in some rare cases claiming profits may be considered acceptable.
Claimants are also expected to take reasonable measures to mitigate the loss. For example, if the damaged product has retained some value, the carrier would only be required to pay for the difference between the original value and the damaged value. The claimant would then be free to salvage the damaged product by selling it at a reduced cost.
There are two types of freight damaged in which you can open a claim. Standard or visible damage is noticeable at the time of delivery. This means that the carrier provided a detailed description of the damage to goods in the delivery note at the time of delivery. Concealed damage is when you discover the damage or loss after you have already signed the delivery note and the driver has left your premises.
Filing a Freight Claim
Each carrier typically provides a form specifically for filing freight claims. However, by law, no particular form is necessary, as long as the following four details are present:
Information to identify the shipment may include the freight bill PRO #, the vehicle number, and the delivery date.
In addition to this basic information, the following documentation should also be provided:
Additional supporting documentation may also be included or required.
Filing Deadlines
Different rules and filing deadlines will apply depending on the shipping mode. This is due to differences in how specific shipping modes are governed.
Rail and motor carriers are governed by the Carmack Amendment. The Carmack Amendment states that claimants have a minimum of 9 months from the date of delivery to file a freight claim.
Conversely, ocean carriers that service the US are governed by the Carriage of Goods by Sea Act (COGSA). This act requires that claimants file a claim within 3 days of delivery.
Consignee and Shipper Responsibilities
At the time of delivery, the consignee should examine the shipment for loss or damage. If there is evidence of loss or damage, the consignee should note it on the delivery receipt; this will be used as evidence to back up the claim. The consignee is still required to accept the shipment, even if there is evidence of loss or damage. If the consignee does not accept the shipment they can no longer be a claimant as they are no longer party to terms of the bill of lading
If the consignee signs off on the delivery receipt and discovers a claim later, then the burden of proof falls to the shipper or consignee to prove that the damage was in fact caused by the carrier as opposed to the shipper or consignee. When damage is not immediately recognizable, this is known as a concealed damage claim.
The shipper is required to pay the shipment invoice in full, regardless of whether or not the shipment was lost or damaged. The appropriate course of action is for either the shipper or the consignee to then file a freight claim against the carrier for reimbursement.
Carrier Liability
How much the carrier is liable for also depends on the shipping mode and the governing bodies. The Carmack amendment states that motor or rail carriers are liable for the full loss. Conversely, COGSA states that the carrier is liable for no more than $500 per package.
There are four scenarios in which a carrier is not deemed liable for damages to goods: