The LTL Freight Claim Process
Freight damages are certainly not pleasant surprises, but they are inevitable at some point if you are a regular LTL shipper. An understanding of the process will help you be more successful at bringing claims to a satisfactory resolution.
WHO FILES THE CLAIM?
Typically, the payer of the freight can only be reimbursed for the freight charges, so they are usually the ones to file a claim. Anyone can file a claim, however, but this is usually the simplest way to do it.
HOW LONG DO YOU HAVE TO FILE A CLAIM?
The answer to this depends on the type of claim being filed. There are generally two types of damage claims, Noted Damage and Concealed Damage. The difference between the two is that noted/visible damage claims were noted at the time of delivery, usually on the delivery receipt, and concealed damages were not.
Concealed damages must be reported to the carrier within 5 days of delivery. Anything reported past the 5 day window will not be considered for a settlement and will be denied for filing too late. A claim for noted/visible damage may be filed for up to 9 months after the delivery date. Any later than that and it will be denied.
CONCEALED DAMAGE
A concealed damage claim is much harder to prove, since no party other than the consignee was there to bear witness to the discovery of the damage. This leaves reasonable doubt as to who could be responsible. In all cases, report the damage to the carrier immediately after discovering the damages. The sooner it’s reported the better chance there is of receiving a settlement offer, and make sure you take note and keep record of who this damage was reported to along with times, dates, etc. For cases of concealed damage, you really can’t have too much information. Make sure you let the carrier know what the shipment value is, and ask if they would like to perform an inspection. Save all the packaging from the unit in the even the carrier requests an inspection to be performed. Failure to save the packaging could result in denial of any settlement offer. Do not use, the items, and it is generally good practice to keep from moving it as much as possible from where it was unloaded. Take pictures if possible, and include them in your claim filing paperwork to the carrier. Fill out a claim form and file it within the 5 day window for reporting concealed damage.
NOTED AND REFUSED DAMAGE
If the item was noted as damaged and refused, someone will first need to take possession of the freight. The carrier will typically only store the refused items for 15 days at the terminal until they begin to charge storage fees. If warranted, it is typically during this time that the carrier will have an inspection done by an independent third party. The inspector will mainly be looking for the extent of the damage, what type of damage, and as to why/how it occurred (i.e. was packaging sufficient).
After it is completed, someone qualified to make an assessment will need to do so in order to estimate the actual damage and repair cost, since it is the claimant's responsibility to mitigate a claim to the lesser of the repair value or replacement value. If this is not done the carrier will deny the claim based on their inspection and mitigation to the repair amount. If it costs less to repair than replace, you can have the repairs performed and amend or file the claim amount to reflect actual repair costs.
The party that can repair the units typically should accept the shipment, and this is usually the manufacturer. The carrier will usually take it back free astray to the manufacturer, too, so they can assess the repairs/damage. If the manufacturer has someone they can send on site to assess damages and make the repairs in the field, then it might not have to go back, but rather could be delivered back to the consignee. Whichever way is most cost effective.
Something else to consider when deciding where or to whom the damaged item(s) will go to while the claim is being resolved is storage. The item(s) should not be thrown away until the claim is resolved. If the carrier offers a settlement it could be contingent upon them picking up the damaged item for salvage, since it is the claimant’s responsibility to mitigate the claim and this helps them recoup some of the costs associated with the settlement payment.
NOTED AND ACCEPTED DAMAGE
For noted damage claims where the item was accepted but noted as having damage, call the terminal and notify the carrier that you will be filing a damage claim. Take note of who you spoke with, as you may need to reference them later. An email works, too, if you have a contact. Ask them if they would like to perform an inspection. They will need to know the value of the item and who to contact should they desire to perform one. Sometimes, when a shipment is valued at less than a thousand dollars, the carriers will waive their right to an inspection due to costs associated with the third party inspection.
Extremely Important: Until the claim is settled, save the entire packaging from the shipment. Failure to save the packaging may result in denial of a full settlement, since the inspector will not be able to clearly determine if the damages were in any way a result of poor or insufficient packaging per the NMFC guidelines. If the inspection is waived, save confirmation of it being waived from the carrier.
If the damage has rendered the freight a total loss or costs more to repair than the invoice amount, the carrier could be liable for the full amount and the claim will not need to be amended. If you are not sure of the actual damage amount at the time of filing the claim, you may put in the full invoice amount of the damaged unit(s) and amend it later, if necessary. Fill out the claim form and send it in in by fax, mail, or email to the carrier along with supporting documentation. Carrier claim forms are usually available on their website.
WHAT HAPPENS ONCE THE CLAIM IS SUBMITTED
After the carrier receives all of the paperwork in the claim filing, they will typically send you a response in writing somewhere between 30 - 45 days with their findings and decision of denial or approval. It is important to note, however, that the carrier does have up to 120 days to notify you of their decision, and even longer in some cases depending on the nature of the claim. Once you receive the carriers decision, if you aren't satisfied you may appeal the decision in writing. If the claim is approved for settlement, the carrier has the right, in some cases, to request and pick up the damaged units for salvage.
Keep records of everyone you speak with or have correspondence with along the way. If the claim is approved for settlement, the carrier has the right to request and pick up the damaged units for salvage.
WHO FILES THE CLAIM?
Typically, the payer of the freight can only be reimbursed for the freight charges, so they are usually the ones to file a claim. Anyone can file a claim, however, but this is usually the simplest way to do it.
HOW LONG DO YOU HAVE TO FILE A CLAIM?
The answer to this depends on the type of claim being filed. There are generally two types of damage claims, Noted Damage and Concealed Damage. The difference between the two is that noted/visible damage claims were noted at the time of delivery, usually on the delivery receipt, and concealed damages were not.
Concealed damages must be reported to the carrier within 5 days of delivery. Anything reported past the 5 day window will not be considered for a settlement and will be denied for filing too late. A claim for noted/visible damage may be filed for up to 9 months after the delivery date. Any later than that and it will be denied.
CONCEALED DAMAGE
A concealed damage claim is much harder to prove, since no party other than the consignee was there to bear witness to the discovery of the damage. This leaves reasonable doubt as to who could be responsible. In all cases, report the damage to the carrier immediately after discovering the damages. The sooner it’s reported the better chance there is of receiving a settlement offer, and make sure you take note and keep record of who this damage was reported to along with times, dates, etc. For cases of concealed damage, you really can’t have too much information. Make sure you let the carrier know what the shipment value is, and ask if they would like to perform an inspection. Save all the packaging from the unit in the even the carrier requests an inspection to be performed. Failure to save the packaging could result in denial of any settlement offer. Do not use, the items, and it is generally good practice to keep from moving it as much as possible from where it was unloaded. Take pictures if possible, and include them in your claim filing paperwork to the carrier. Fill out a claim form and file it within the 5 day window for reporting concealed damage.
NOTED AND REFUSED DAMAGE
If the item was noted as damaged and refused, someone will first need to take possession of the freight. The carrier will typically only store the refused items for 15 days at the terminal until they begin to charge storage fees. If warranted, it is typically during this time that the carrier will have an inspection done by an independent third party. The inspector will mainly be looking for the extent of the damage, what type of damage, and as to why/how it occurred (i.e. was packaging sufficient).
After it is completed, someone qualified to make an assessment will need to do so in order to estimate the actual damage and repair cost, since it is the claimant's responsibility to mitigate a claim to the lesser of the repair value or replacement value. If this is not done the carrier will deny the claim based on their inspection and mitigation to the repair amount. If it costs less to repair than replace, you can have the repairs performed and amend or file the claim amount to reflect actual repair costs.
The party that can repair the units typically should accept the shipment, and this is usually the manufacturer. The carrier will usually take it back free astray to the manufacturer, too, so they can assess the repairs/damage. If the manufacturer has someone they can send on site to assess damages and make the repairs in the field, then it might not have to go back, but rather could be delivered back to the consignee. Whichever way is most cost effective.
Something else to consider when deciding where or to whom the damaged item(s) will go to while the claim is being resolved is storage. The item(s) should not be thrown away until the claim is resolved. If the carrier offers a settlement it could be contingent upon them picking up the damaged item for salvage, since it is the claimant’s responsibility to mitigate the claim and this helps them recoup some of the costs associated with the settlement payment.
NOTED AND ACCEPTED DAMAGE
For noted damage claims where the item was accepted but noted as having damage, call the terminal and notify the carrier that you will be filing a damage claim. Take note of who you spoke with, as you may need to reference them later. An email works, too, if you have a contact. Ask them if they would like to perform an inspection. They will need to know the value of the item and who to contact should they desire to perform one. Sometimes, when a shipment is valued at less than a thousand dollars, the carriers will waive their right to an inspection due to costs associated with the third party inspection.
Extremely Important: Until the claim is settled, save the entire packaging from the shipment. Failure to save the packaging may result in denial of a full settlement, since the inspector will not be able to clearly determine if the damages were in any way a result of poor or insufficient packaging per the NMFC guidelines. If the inspection is waived, save confirmation of it being waived from the carrier.
If the damage has rendered the freight a total loss or costs more to repair than the invoice amount, the carrier could be liable for the full amount and the claim will not need to be amended. If you are not sure of the actual damage amount at the time of filing the claim, you may put in the full invoice amount of the damaged unit(s) and amend it later, if necessary. Fill out the claim form and send it in in by fax, mail, or email to the carrier along with supporting documentation. Carrier claim forms are usually available on their website.
WHAT HAPPENS ONCE THE CLAIM IS SUBMITTED
After the carrier receives all of the paperwork in the claim filing, they will typically send you a response in writing somewhere between 30 - 45 days with their findings and decision of denial or approval. It is important to note, however, that the carrier does have up to 120 days to notify you of their decision, and even longer in some cases depending on the nature of the claim. Once you receive the carriers decision, if you aren't satisfied you may appeal the decision in writing. If the claim is approved for settlement, the carrier has the right, in some cases, to request and pick up the damaged units for salvage.
Keep records of everyone you speak with or have correspondence with along the way. If the claim is approved for settlement, the carrier has the right to request and pick up the damaged units for salvage.
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