Freight Claims

What is a Freight Claim?

Freight claims are a legal demand by a shipper or consignee to a carrier for financial reimbursement on a loss or damage of a shipment. There are many rules to follow when submitting freight claims. Using with a 3PL who has an expert claims team can help simplify the process, giving you more time and focus back to your business and customers.

Steps to start the claims process

To successfully submit a claim, there are many steps to follow with precision. Skipping any of these steps can result in claims being denied by a carrier. Below are details on how to properly notate the Bill of Lading (BOL) and Delivery Receipt (DR) when filing a claim.

Shipment Damage

When a shipment delivers visibly damaged—TAKE PICTURES!
What you write on the delivery receipt can have lasting effects on the cargo claim process.
- If you are certain to the degree or extent of the damage or loss at the time of delivery, it is your responsibility to properly notate the delivery receipt describing just that.
- If you are unsure of the extent of damages at the time of delivery, make sure a vaguer notation is made on the delivery receipt, such as, pallet is damaged, packaging is damaged with holes in the cartons, and product shows signs of damage corresponding with the damage to the packaging.
The notes below are what you need to keep in mind when notating/signing the delivery receipt.
- Write what you think is damaged, but keep in mind, what you write on the delivery receipt is what the carrier will hold you liable to claim.
  - So, if there is any question, do not provide specific piece count, etc. Please do include what kind of damage is seen whether it be scratches, dents, gouges, etc.
- Make sure you notate any damage to the packaging that suggests further damage.
  - If there is packaging damage, then it will be your responsibility to open the packaging and thoroughly inspect the product for damages prior to notating the delivery receipt.
Avoid writing “subject to inspection”, “further inspection” or “possible damage” or notate anything that leaves the carrier the ability to question whether there was actual product damage at the time of delivery.
- Doing so in this manner could and or will make the claim a concealed damage claim and will then shift the burden of proof from the carrier to the claimant to prove that the damages occurred while in the possession of the carrier and not anytime thereafter.

Shipment Shortages

When it comes to shortages, TAKE PICTURES, but unlike concealed damage, shortages often go undiscovered until after the driver leaves. Shippers can avoid this extra hassle by taking steps to prepare for it. A few steps we would suggest taking would be:
- On the BOL, the shipper can request or require the driver to count and sign for the number of pieces in your shipment.
  - This must be agreed to prior to pick up. If there is no agreement or contract in place, it should be discussed with the carrier prior to pick up when the load is initially offered to the carrier.
- Furthermore, if this is not agreed upon prior to delivery (piece count rather than solely pallet count), please be aware of the carrier’s typical notations/abbreviations for such shipments.
  - STC (said to contain): The driver is not assuming responsibility for any number of pieces but rather a specific number of pallets that are “said to contain” a number of pieces.
  - SWP or SWS (shrink-wrapped pallet/Skid): The driver is taking responsibility for picking up a shrink-wrapped pallet and not the piece count.
- The reason for this is because, in the event of a cargo claim for lost freight, the above notations limit the carrier’s liability for the shortages because they can argue that they picked up a certain amount of pallets and delivered the same amount of pallets no matter what the end piece count is.
  - For example, if a shipment consisting of 9 rolls on one pallet that is tendered to a carrier, the driver will likely sign the BOL with “1 pallet STC 9 pieces.
  - In doing so, the carrier is only responsible for the quantity of 1 pallet. In the event the receiver notates “1 roll missing,” it is not likely the carrier will be held accountable, as that driver only signed for 1 pallet (not the number of rolls).
- To prevent carrier from removing themselves of liability based on the above, it is necessary for the shipper to require the driver to sign for the actual piece count on the BOL which is the binding contract for that shipment. Otherwise known as the “contract of carriage”. (Please note, this is only applicable on BOL’s that list piece count in the piece count section and not solely list handling units or pallets.)
- NOTE: Many Carriers especially LTL, may charge a premium for having to do case count.
  - Also Note a Driver is not a receiver or a shipper, and IF the freight is hard to count and or already shrink wrapped, they could and can ask that it all be broken down so they can confirm each case on the pallet.

Miscellaneous Additional Information

The following points are important details to pay attention to that could determine whether the carrier is held liable for the claimed loss or damage.
- On the POD, make sure to notate any discrepancies in the packaging, especially if the shrink wrap is torn, missing, or suggests that the product was repackaged (e.g., the color of the shrink wrap is not the typical color used by the shipper).
- Pay close attention to this.
  - If the shrink wrap is not intact, notate accordingly, or if any other packaging is not intact, notate accordingly.
- Please note, just notations of loss (short 1 piece) are no longer enough to prove a carrier liable for a shortage claim if the delivery receipt is notated with the shrink wrap being intact.
- Same rule applies to shipments that are packaged in different material other than shrink wrap. If the packaging and pallet do not look as they should at the time of delivery and in good condition completely, please make note of that on the delivery receipt.
- If the delivery receipt is notated with packaging intact at the time of delivery (usually a box is checked next to shrink wrap intact), the carriers look at it as if the product was damaged after the delivery in the case of damages or that the shipper did not ship the items being claimed as short.
- If the shrink wrap is not intact at the time of delivery, please make sure to notate the delivery receipt accordingly to confirm that it is not intact.
- If possible, make sure that you review the delivery receipt in its entirety and that you agree with all notations prior to signing.
- If not, the claim payment to your company will most likely be affected and result in less than full settlement.

Please Remember:

If the driver refuses to let you sign the delivery receipt as you wish, do not sign it and refuse the shipment.
If you don’t feel that most of the product is damaged and that the majority can be used, please make sure the driver calls the exception into his/her dispatch, provides an exception number, prior to signing the delivery receipt.
Also keep in mind, if the packaging is damaged at all, the receiver has the right and responsibility to open all packaging and inspect the actual product for damage.
If the packaging is not damaged at the time of delivery, please note that the consignee is not allowed to remove the packaging to inspect the product.

When Receiving Freight From A Carrier

*DO NOT SIGN FOR FREIGHT UNSEEN

**CONSIGNEE IS REQUIRED TO INSPECT THE FREIGHT AT THE TIME OF DELIVERY AND BEFORE THE DRIVER LEAVES

REVIEW DELIVERY RECEIPT TO ENSURE SHIPMENT BELONGS TO YOUR COMPANY.
REVIEW DELIVERY RECEIPT FOR ALL NOTATIONS MADE BY THE DRIVER AND MAKE SURE THE NOTATIONS ARE CORRECT BEFORE SIGNING IT (this includes check marked boxes).
VERIFY DELIVERY RECEIPT HANDLING UNIT AND PIECE COUNT WITH ACTUAL SHIPMENT
- Have all handling units been delivered (pallets, crates, etc.).
- If delivery receipt states the number of actual pieces that are supposed to be in/on the handling units, receiver has the right to visually confirm the pieces (visual inspection does not include breaking down the pallet).
- Many delivery receipts have a block for “shrink wrap intact”. If you feel the shrink wrap has been tampered with/re-wrapped, make sure to notate the delivery receipt accordingly.
- Are there any discrepancies (shortage/overage)? If so, they need to be notated on the delivery receipt.
VERIFY THE CONDITION OF THE SHIPMENT.
- If there are any signs of mishandling, shock or tilt watch indicators activated, directional labels incorrect, etc., make a notation on the delivery receipt.
- Are any of the boxes, containers showing signs of being opened, punctured, buckled, ruptured, etc., make a notation on the delivery receipt.
- Any signs of leakage or moisture content, make a notation on the delivery receipt.
- When making notations on the delivery receipt, if extent of loss (missing or damages) is known, then be specific. If the exact extent of loss cannot be determined right then, make more of a general notation such as ‘damaged’ or ‘short’.
MAKE SURE TO MAKE THE NOTATIONS OF DISCREPANCY WITH THE DRIVER PRESENT, THEN SIGN AND DATE. DO NOT SIGN THE DELIVERY RECEIPT WITHOUT VERIFYING EVERYTHING ON IT.
- If it is on a driver handheld, verify notation on the top of the handhelds screen before signing. Or ask the driver to confirm the notations’ location.
DO NOT SIGN THE DELIVERY RECEIPT AS “SUBJECT TO INSPECTION OR COUNT”.
1. This is not considered a notation of discrepancy.
DRIVER SHOULD PROVIDE YOU WITH A COPY OF THE SIGNED DELIVERY RECEIPT, IF NOT MAKE A COPY.
TAKE PICTURES OF THE PALLET AND ALL DISCREPANCIES.

KEEP ALL DAMAGED FREIGHT AND ITS PACKAGING QUARANTINED UNTIL THE CLAIM PROCESS IS COMPLETE OR UNTIL THE CARRIER INSPECTS, WHICH AT THAT POINT ONLY THE PACKAGING SHOULD BE DISCARDED.

How To File A Claim

When filing a freight claim, the more documentation, the better. However, there are a few key documents that are needed with every freight claim

Completed freight claim form in its entirety.
Product invoice/sales invoice – Commercial Invoice
Proof of delivery/delivery receipt marked with proper notations of exceptions
Original Bill of Lading – signed by carrier at time of pickup
Carrier freight costs – If applicable.
Correct Weight of each item (s) being claimed
Repair cost invoice (if applicable)
Photographs – If Possible, ON the TRUCK/Trailer, if not right after it is pulled off trailer
Inspection report of damages, when applicable
Write up or description of loss or damage
Record of discounted sale/salvage
If you think the document can help your case, add it to the freight claim
Please note that we file the claim as presented and or as received.

Damaged Freight Options:

The consignee can accept the freight and sign the POD as damaged/short and hold the freight until the freight claim is resolved.
The consignee can refuse the freight, and have it shipped back to the shipper, where the shipper will hold the freight until the freight claim is resolved.
In some rare cases, carriers will dispose of the freight themselves if given the okay by the customer due to a complete loss of the product.
The carrier WILL NOT hold onto the damaged freight during the freight claims process and storage charges will accrue if disposition is not given to the carrier in a timely manner.

Freight Claims Statistics

Achieving Low Claims Rates

At BlueGrace, we have a very low 0.34% claim rate throughout LTL, Truckload and Expedited shipping services. This means that although claims are inevitable, you can be assured our experts are focused on minimizing any disruptions or claims to your freight. You can expect quality service and work with professionals who care for the safe delivery of your freight.

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Freight Claims

What is a Freight Claim?