Claim
A claim is a charge made against a carrier for loss, damage, delay, or overcharge by the shipper of consignee, demanding financial compensation. A claim may be either partial or total. They can also be referred to as shipping claims, cargo claims, transportation claims, or loss and damage claims.
Cargo claims are a common legal demand in the logistics industry. Many factors can contribute to a claim, such as mishandling, damage, or loss of goods.
When filing a cargo claim, it is important to have as much documentation as possible. This includes bills of lading, invoices, delivery receipt and photographs of the damaged goods. It is also important to contact the carrier as soon as possible after discovering a problem with your shipment.
The carrier’s liability is determined by the terms and conditions of their contract. The carrier is typically liable for any losses or damage that occur while the goods are in their possession. In the case of motor carriers, the cargo is covered while in transit, but not while in storage. Shipping contracts may contain minimum and maximum liability limitations clauses, typically specifying the minimum and maximum dollar amount of any freight claim. The terms and conditions should be stated on the bill of lading.
Claims can often be resolved through negotiation with the carrier, but are better resolved if notified immediately. If the shipment is covered by freight insurance, the insurance company may become involved in the claim process.
Freight claims can often be complex and time-consuming to resolve. It is important to work with an experienced logistics provider who can help you navigate the process and get the best possible outcome for your business.
There are six types of freight claim:
1. Damage to goods. If physical damage occurs to your goods, you can file a claim. This includes damage caused by mishandling, improper packing, or bad weather. Damage claims may take into account the cost of repairing or replacing the goods, as well as any associated shipping costs. When damage is not immediately recognizable, or there is no visible damage, this is known as a concealed damage claim. The claimant will state the the actual value of the affected pieces, or the amount of any damages actually sustained.
2. Partial loss or shortage. If you receive part of your shipment but not all of it, or if the goods are damaged, the shipper can file a claim for the loss occurred. When the shortage is not immediately recognizable, this is known as a concealed shortage claim.
3. Delay in delivery If your goods are delivered late, you can the shipper can claim damages for the defective service. This may be due to factors such as poor weather or traffic congestion.
4. Wrongful classification. If the carrier classifies your goods incorrectly, you can claim for damages.
5. Overcharge. If you are charged more than what was agreed upon in your contract, you can claim for the excess cost.
6. Total loss or lost cargo. If your entire shipment is lost en route, the shipper can file a claim for the value of the goods.
7. Wrongful detention or pilferage. If your goods are held by the carrier for an extended period of time or if they are stolen, the shipper can claim damages.
It is important to note that not all of these claims may be applicable in every situation.
There are five recognized carrier defenses to avoid being held liable: an act of God, an act of the public enemy, the inherent vice or defect of the goods, the violation of a special contract between the shipper and carrier, and an act of a public authority.
The most common carrier defense is the act of God. This includes events such as natural disasters, war, or riots. If the carrier can prove that the event was unforeseeable and unavoidable, they may be exempt from liability.
The inherent nature or the inherent vice of goods is also a common carrier defense. This includes factors such as damage caused by perishable items or goods that are combustible or explosive. If the goods are not properly packaged for transport, the carrier may be exempt from liability.
In order to file a cargo claim, you will need to complete a freight claim form. This form can be obtained from the carrier or from your logistics provider. The form should include the following documents and information:
- A description of the goods and their value
- The reason for the claim
- Delivery Receipt
- Bill of Lading
- Freight Bill number
- Proof of damage or loss (such as photographs of the damaged product)
- Supporting Documentation of the contract between you and the carrier
- Contact information for yourself and the carrier
Where possible, the claimant should maintain packing materials of damaged merchandise.
Submit the completed form to the carrier, along with any additional supporting documentation. The carrier will then suppy you with a claim number, either electronically or in written correspondence, and investigate the claim and let you know what action they plan to take. Claim settlement can take a few weeks up to many months.
When a loss is suffered, the claimant should be aware of any time limitation for claims. The carrier will be relieved of their obligation to pay if the claim isn’t resolved within the specified time frame.
Most carriers maintain liability insurance for automobile and general liability, cargo and workers compensation exposures. Note that many carriers will not investigate claims until all transportation charges have been paid.
Freight insurance doesn’t provide protection against all losses a carrier can be responsible for under the Carmack Amendment or common law. The shipper should be aware of what is and isn’t covered under their freight policy.
If you are not happy with the carrier’s response, you can file a formal complaint with the Department of Transportation.
For transportation claims relating to international shipments, you can contact the International Federation of Freight Forwarders Associations (FIATA). The international conventions that FIATA oversees are the Hague-Visby Rules and the Hamburg Rules.
e, delay, or overcharge.
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