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The Most Common Reasons for Freight Claims and How to Avoid Them

The Most Common Reasons for Freight Claims and How to Avoid Them

Whenever anything is shipped, there’s a chance it could be damaged or lost. Any number of things can go wrong, and most of the time, they happen accidentally.  Regardless of why things happen, there are times when you, or the recipient of a shipment you’ve made, need to make a claim. It’s never anyone’s favorite task, but if items are lost or damaged, a claim can help make up for some or all of the loss. Most of the time, claims fall into specific categories, and can usually be avoided. Let’s take a closer look.

Visible Damage

When a shipment arrives and is visibly damaged from transit, the recipient can note the damage on the Proof of Delivery receipt and make a claim with the shipping company. Damage could include water damage, crushed containers, loose shrink wrap, or anything else you can easily see by looking at the shipment.  Because exterior damage to a shipment doesn’t always mean the contents are actually damaged, you have time to make a claim based on visible damage. Most shippers allow at least nine months to make such a claim. This allows time for the freight to be unpacked and inspected. In the meantime, you’ll need to pay the shipping invoice, and keep track of evidence to support your claim. Provided that the damage was noted on the POD (which is very important) and you can provide proof that the items were damaged in transit, you’ll likely receive some or all of the money you spent on freight back.

Concealed Damage

Damage to your shipments isn’t always immediately obvious from the outside. It’s possible that your pallets were dropped during transport, for instance, jostling the contents but keeping them intact. These types of claims are typically hard to prove, since the POD lacks any notations of damage. The window for a claim is also much smaller, usually a week or less.  One way to reduce claims due to concealed damage is by adding impact recorders to your shipments. These devices attach to the exterior packaging, and clearly show when a package is dropped or mishandled. By using these recorders, and checking them upon delivery, you have a stronger case for a concealed damage claim, especially when combined with photos and other evidence.

Shortages

Like damage, shortages can be either concealed or visible. You can spot a visible shortage when freight is clearly missing due to damaged packaging, or if the amount delivered doesn’t match what was listed on the Bill of Lading. As with visible damage, if the shortage is noted on the POD, you can make a claim to be reimbursed for losses. Concealed shortages are even more challenging to prove, and you only have five days to do so. A concealed shortage is one that isn’t immediately apparent when the delivery is made. The packaging may appear to be intact, and it’s not until everything is unloaded that you realize what you received does not match the Bill of Lading. This is why it’s vital to count everything received to not only avoid concealed shortages, but also to realize that concealed shortages often originate with the shipper, not the freight company. For example, if you expect a case to contain a dozen of an item, and only receive ten, that’s an issue that should be addressed with the original shipper, not the shipping company.

Loss

Lost freight is another common cause for claims. In short, it means the shipment never arrived at its destination, due to misdirection, theft, or another cause. To make a claim, you’ll need an original Bill of Lading showing that the carrier picked up the shipment, and proof that it never arrived. Once you make one of these claims, the freight company has a specified number of days (usually 7-14) to locate the shipment. Otherwise, you won’t need to pay for shipping. One way to reduce the likelihood of a lost or misdirected shipment is to implement RFID or GPS tracking tools into your shipments, which provide real time updates of the shipment location. When shipments get off track, you can work with the carrier to get them back where they need to be and prevent loss.  Keep in mind that recipients always have the right to refuse shipments if they receive the wrong items, or if the shipment arrives late or damaged. If a shipment is refused, the shipper can either opt to have the items returned, sent to a holding area, or dispose of them. In most cases, if this happens you don’t need to pay for shipping.  Although freight claims are common, by implementing technology and taking steps to safely ship your items, you can reduce the number of them and save time, money, and customer relationships.


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by Brian Perry // Brian Perry is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.