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A Complete Guide To Freight Claims

What's in this article?
  1. What Is A Freight Claim?
  2. Causes Of Freight Claims
  3. Types Of Freight Claims
  4. Concealed Damage Claim
  5. Shortage Claim
  6. Concealed Shortage Claim
  7. Loss Claim
  8. Damage Claim
  9. Contract Claim
  10. Carrier Negligence Claim
  11. Motor Carrier Liability Claim
  12. Insurance Claim
  13. The Claims Process
  14. Filing The Claim
  15. Investigating The Claim
  16. Resolving The Claim
  17. Appealing A Denied Claim
  18. How To Ensure You Get The Full Amount You're Owed
  19. Hire An Experienced Attorney
  20. Gather Evidence
  21. Be Patient
  22. Stay Organized
  23. The Legal Aspect Of Freight Claims
  24. International Freight Claims
  25. What You Can Do To Prevent Freight Claims
A Complete Guide To Freight Claims

No matter how well you pack and label your boxes, sometimes damage during shipping is inevitable. If your goods are damaged in transit, you may be able to file a freight claim to get compensation from the carrier.

But filing a freight claim can be a complicated and time-consuming process. This guide will explain the basics of freight claims, including what they are, how to file them, and what you can do to avoid them in the first place.

What Is a Freight Claim?

A freight claim is a legal concept that allows a shipper to recover damages from a carrier for losses incurred during transport.

This claim can include damage to the shipment, loss of the shipment, or delivery delays. Freight claims can also be called cargo claims, shipping claims, or transportation claims.

When you file a freight claim, you ask the carrier to pay you for the value of the lost or damaged goods.

Causes of Freight Claims

There are two leading causes of freight claims: damage claims and loss claims.

Damage claims are filed when the shipment arrives at its destination but is damaged. This damage can be due to many factors, including:

  • Improper packaging
  • Incorrect labeling
  • Exposure to the elements
  • Poor handling
  • Mechanical damage

Loss claims, on the other hand, are filed when the shipment is lost entirely. This loss can be due to:

  • Theft
  • Misplacement
  • Accidents
  • Natural disasters
a-complete-guide-to-freight-claims-02.jpg

Types Of Freight Claims

Depending on the cause of the damage or loss, the shipper can file different types of freight claims.

Concealed Damage Claim

Customers may file a concealed damage claim when the damage is not visible on the outside of the packaging and is discovered after the product has been unpacked.

Therefore, this type of damage is often only discovered after the customer has attempted to use the product.

Shortage Claim

A shortage claim is filed when less product is delivered than what was invoiced. Shortage claims can happen for a variety of reasons, such as incorrect picking, packing, or loading of the products.

Concealed Shortage Claim

A concealed shortage claim is filed when there is a shortage of product, but the shortfall is not immediately apparent.

Loss Claim

A loss claim is filed when an entire shipment is lost in transit. Loss claims are typically only filed when the value of the shipment is high, and replacement would be too costly.

Damage Claim

A damage claim is filed when there is visible damage to the shipment. This type of damage can happen during transit or while the product is loaded or unloaded from the truck.

Contract Claim

A contract claim is filed when the carrier fails to uphold its end of the contract. The customer files this kind of claim due to a missed delivery window, damaged product, or other issues.

Carrier Negligence Claim

A carrier negligence claim is filed when the carrier is at fault for the damage or loss. This claim may come from improper loading, unsecured freight, or other issues.

Motor Carrier Liability Claim

A motor carrier liability claim is filed when the driver of the truck is at fault for the damage or loss. Customers may file these claims because of reckless driving, improper securing of the load, or other issues.

Insurance Claim

An insurance claim is filed when the damage or loss is covered by insurance. This type of claim is typically filed when the value of the shipment is high, and replacement would be too costly.

If you are filing a freight claim, it is crucial to determine which category the damage falls into. In addition, it will help you understand what evidence you need to provide and your chances of success.

When filing a freight claim, you must include specific information and documents. These include:

  1. A Copy of The Bill of Loading: This document lists the details of the shipment, including the origin, destination, and value of the goods.
  2. A Copy of The Freight Insurance Policy: The insurance policy will list the coverage that applies to your shipment.
  3. Proof of Value: You will need to provide proof of the value of the goods that were damaged. This can be a sales invoice, purchase order, or estimate from a qualified appraiser.
  4. Photographs: It would be best if you took photographs of the damaged goods and the packaging. This will help support your claim.
  5. Repair Estimates: If the goods can be repaired, you should get estimates from qualified repairers.
  6. Replacement Estimates: If the goods need to be replaced, you should get estimates from qualified vendors.
  7. Documentation of Loss: This can include documents like bank statements or invoices showing that you lost money.

Having these documents ready will make it easier to file your claim and get you the compensation you deserve.

freight-claim-process.jpg

The Claims Process

The freight claim process can be divided into three steps: filing the claim, investigating the claim, and resolving the claim.

Filing The Claim

The first step in the freight claims process is to file a claim with the carrier. The claim can be completed online, over the phone, or in person.

When filing a claim, you must provide basic information about yourself, the shipment, and the damage or loss.

Once you have notified the carrier, you will need to gather evidence to support your claim. This can include pictures of the damage, documentation of the value of the shipment, and any other relevant information.

Investigating The Claim

Once a claim has been filed, the carrier will open an investigation. The carrier will review the evidence you submitted and may request additional information or evidence from you.

The carrier will also interview any witnesses and review any relevant documentation.

Resolving The Claim

Once the investigation is complete, the carrier will make a decision on the claim. If the claim is approved, the carrier will reimburse you for the value of the damage or loss.

You will have the option to appeal the decision if the claim is denied.

Appealing a Denied Claim

If your freight claim is denied, you have the right to appeal the decision. The first step is to request a written explanation of the denial. The carrier will then have 30 days to provide you with a written explanation.

If you are still not satisfied with the carrier's decision, you can file an appeal with the Federal Motor Carrier Safety Administration (FMCSA).

The FMCSA will review your case and make a ruling.

How to Ensure You Get the Full Amount You're Owed

It's not always guaranteed to get the total amount you expect from a freight claim, but there are some things you can do to improve your chances.

Hire an Experienced Attorney

The appeals process is complicated and time-consuming, so it's essential to have someone on your side who knows what they're doing.

An experienced attorney will be able to navigate the appeals process and give you the best chance of success.

Gather Evidence

As we mentioned before, evidence is critical for successful freight claims. Make sure you take pictures of the damage, document the value of the shipment and delivery receipt, and collect any other relevant information.

The more evidence you have, the better your chances of winning your case.

Be Patient

The claims process can be frustrating and time-consuming, but it's essential to be patient. Don't give up if your claim is denied at first.

Appeals can take months or even years to resolve, so you need to be prepared for a long battle.

Stay Organized

It's crucial to stay organized throughout the claims process. Keep all of your evidence in one place, and make sure you have a clear understanding of the timeline.

This will make it easier to keep track of your case and make sure you don't miss any critical deadlines.

how-to-ensure-you-get-the-full-amount-youre-owed.jpg

The Legal Aspect of Freight Claims

Most shipping claims are filed against the carrier for damages that occur during transit. However, there are some cases where the shipper may be liable for the damages.

According to the Carmack Amendment, the carrier is liable for any damages to the shipment while it is in its possession. This includes damage that occurs during loading, unloading, and transit.

However, there are some exceptions to this rule. So, the carrier is not liable for damages that are caused by:

  • Acts of God: Events like floods, storms, and earthquakes fall into this category.
  • Acts of War: Examples include damage caused by enemies or rebels.
  • Acts of Public Enemies: This includes damage caused by terrorists or criminals.
  • Inherent Vice: When the goods are damaged because of their own nature, such as if they spoil or rot. filing freight claims cargo claims liability coverage freight shipping
  • Shipper's Negligence: This is when the damage is caused by the shipper's own actions, such as if they improperly packaged the goods.
  • Carrier's Negligence: This is when the damage is caused by the carrier's own actions, such as if they dropped the shipment.

The burden of proof is on the shipper to prove that the carrier is liable for the damages. If the shipper can't prove that the carrier is liable, then they will not be able to recover any damages.

It's important to note the different rules for interstate and intrastate shipments.

For interstate shipments, the Carmack Amendment applies. For intrastate shipments, each state has its own rules and regulations.

If you're unsure which rules apply to your shipment; you should contact an experienced attorney. They will be able to help you determine which laws apply to your case.

International Freight Claims

International freight claims are slightly different from domestic claims.

First, you must file your claim with the International Claim Association (ICA). The ICA is a nonprofit organization that helps resolve international disputes.

You will need to fill out a claim form and submit it to the ICA. Once they receive your claim, they will contact the carrier and try to resolve the issue. If they cannot resolve the claim, they will send your case to arbitration.

Arbitration is a process where both parties present their case to a neutral third party. The arbitrator will then decide who is liable for the damages.

This decision is binding, which means that both parties must accept the arbitrator's decision.

If you're filing an international freight claim, you should contact an experienced attorney. In addition to helping you navigate the complicated legal process, they give you a better chance of succeeding with your claim.

what-you-can-do-to-prevent-freight-claims.jpg

What You Can Do to Prevent Freight Claims

Ultimately, the best way to deal with freight claims is to prevent them from happening in the first place. There are a few things you can do as the shipper to reduce the risk of damage:

  • Use Proper Packaging: Make sure you use the correct type of packaging for your goods. Depending on the type of goods, you may need to use special packaging like wooden crates or padded envelopes.
  • Use Enough Packaging: Don't skimp on packaging. Using enough packing material to fill any space in the box will help prevent the goods from shifting during transit.
  • Label the Boxes Correctly: Make sure you label the boxes with the correct destination and contents. Doing this will help ensure that your shipment is going to the right place and that the carrier knows what's inside.
  • Keep Track of Your Shipment: Once you ship your goods, make sure you keep track of the shipment. This way, you can know when it arrives and take action if there are any delays.

Taking these precautions can help prevent freight claims and keep your goods safe.

Conclusion

Moving your belongings can be stressful, especially for high-value items, like vehicles. It helps to know what your rights are and what to do if things go wrong.

If you need a reliable and experienced shipper, look no further than us here at A-1 Auto Transport. We’ve got a range of shipping services and have over 2 million happy customers from 197 countries.

Choose the service that’s best for you, request your free quote, and we’ll take care of the rest.

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Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with a Bachelor of Business Marketing. 

After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood. 

With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.

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