The 4 Types of Freight Claims
If you have been following the Cerasis blogs, we have written extensively on all things freight claims. From the 6 easy steps of how to file a freight claim, to how you can better ensure your freight claims get paid, how not to be distracted by these freight claim time wasters, and of course why you may receive a freight claim declination. After today's post, which will cover the 4 types of freight claims you will encounter, we will conclude our extensive freight claims series on the most frequently asked questions we hear at Cerasis about claims.
We will then put together the ultimate eBook on Freight Claims after we first hold a live webinar in June on freight claims. Our goal has always been to provide all shippers (not just our customers) with the information they need to better manage freight. The better you have a handle on freight and transportation costs, the more efficient and profitable your business becomes.
As a refresher, a freight claim is defined as the following:
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.
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.
The 4 Most Common Types of Freight Claims You Will Encounter
The following are the 4 types of freight claims you will end up filing if you are a regular shipper of freight. As with anything freight claims, the more you know BEFORE you have to file a freight claim, the more likely you are going to get the claim handled and paid for, and the less time you will spend processing them. Of course, if you'd like to take that burden off your plate all together, freight claims management is one of the services Cerasis offers in our technology and managed transportation services suite.
A large number of freight claims you will file will be of the type "damaged." This is fairly self explanatory, but to actually have this type designation, the freight damage must be visible upon delivery and then notated on the proof of delivery document.
The second type of freight claim you will undoubtedly file is the type "loss." This type is official if you have notated and documented against the original bill of lading that the freight that was picked up but does not make it to its destination. Essentially, this means there is no proof of delivery ever signed, and you must initiate a freight claim. Again, it is vital that you are accurate when filling out the original bill of lading.
In the types of freight claims, shortages can happen if something falls out or if something was written in error of the bill of lading. There may be several other reasons, but simply, you have shortage if only partial freight of what you expected from what was listed on the bill of lading makes it to you. This is why it is vital when you receive the freight shipped to you that you verify pieces received against the drivers delivery receipt provided at the time delivery. Note in detail any discrepancies on the carrier's delivery receipt. Have the freight driver sign all copies to acknowledge your notation.
The final of the types of freight claims is around concealed damage or shortage. This is a tough one to see when you are inspecting the freight to make sure everything is OK and there is no claim. You very well may sign the POD and notate everything is fine, but when you pull back the shrink wrap or open the packaging you find something inside you couldn't see is damaged or is short. The more you know about how to file and avoid a declination on concealed damage or shortage, the better off you are. If you know what is being shipped to you, and you should if you look at the bill of lading, then you can make sure you check inside the boxes before you sign the POD. This could help you get back the entire amount of the value of the freight if you catch the concealed damage or loss. If not, you may only be able to get 1/3rd of the claim amount back.
Freight claim management is not the most glamorous part of working with freight, but hey, it happens. The more you know about freight claims and all that goes into how they occur and how you file and manage them, that is "knowledge is power," the better off you are. What are your top tips around freight claims YOU would share? Let us know in the comments below!
If you need any help with freight claims management don't hesitate to contact us to set up a logistics consultation so we may offer you the best solutions for long term management of your freight.