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What is a freight claim?
A freight claim is a breach of contract claim. Also known as shipping claim, logistics claim, or cargo claim, it is a legal demand by a shipper or consignee against a transportation provider. With a freight claim, the claimant seeks a financial reimbursem*nt for an overcharge or a shipment damaged, lost, or classified within more than 400 different claim reason codes.
When to file a freight claim
A shipper or consignee initiates a carrier claims process against the transportation service provider contracted to transport freight cargo or parcel shipments under agreed-upon Bill of Lading terms.
If a shipment is lost or stolen, delivered in a different/damaged condition, or outside other contract terms, a freight claim seeks to reimburse costs or overcharges for the affected freight.
Statutory requirements govern freight claim filing. Claims filed against a carrier occur within the period specified by the carrier’s contract and/or tariff, or as defined by law.
Depending on the shipping claim type, the statutory filing deadline may vary. Shippers or consignees usually have nine months to file for most claim types.
Different Logistics Claims Types for Freight Transportation
There is a number of things that can, and do, go wrong during transportation. Some of the more common freight claim types include:
Freight Damage Claim
Part or all of a freight shipment has been damaged to the extent that its value is affected.
Concealed Damage Claim
A claim filed when cargo damage was not apparent until final unboxing and inspection.
Shortage Claim
Multiple pieces are missing from an order, creating a shortage.
Concealed Shortage Claim
Miscounts that could not be detected until unboxing occurred.
Refused Claim
Claims that occur when the recipient denies acceptance of the entire order.
Loss Claim
An entire order has been lost and not delivered as intended.
Who should I file a Freight claim against?
Shipping claims are filed against the carrier. If there is more than one carrier, a claim is filed against either the originating carrier or the delivering carrier. Unless it is known that a connecting carrier is responsible for causing damage or loss, it is not necessary to file a claim against an intermediate carrier.
Send the claim to the carrier’s claim manager, rather than their insurance company.
Brokers or 3PLs are not typically considered liable for damages – after all, only the carrier takes possession of the goods. A claim can only be filed against an intermediary if they have specifically accepted liability for a shipment. When you file against the carrier, you should send a copy of the claim to your broker as well.
How to File a Freight Claim
Every carrier provides a different claim form to file with, but a specific form is not necessary to make it legally valid. Common forms used in the carrier claims process resemble FedEx Freight Claim Form, or the UPS Supply Chain Services Customer Cargo Claim Form.
Whether you use a carrier form, a generic form, or a typed letter, the following is required for a freight claim form to be legally valid.
- Identify the shipment.
- State the type of loss or damage.
- State the claim amount.
- State expectations for payment.
A clear concise process facilitates effective freight claim management.
Documentation is important. If a claim cause is suspected, shipping claim evidence should be documented. Each carrier has specific rules and regulations regarding what documents are needed.
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What documents are needed for a logistics claim?
Proactively including all documents and information at the time of a logistics claim can speed up the claims process and resolution. Include the following documents with a claim:
- Original shipment invoice.
- Copy of the signed delivery receipt
- Copy of the original bill of lading.
- Invoice to provide the values of the lost or damaged goods.
- Invoices for repairs or replacements.
Depending on the type of claim, commodity, transportation mode, and severity of the damage, additional documentation may be required and/or helpful.
- Copy of the freight bill showing all charges are paid.
- Notification of loss.
- Copies of the request for inspection – required if making a damaged product or concealed damage claim.
- Inspection report, if completed, or waiver of inspection by the carrier.
- Photographic evidence of any damage – this is highly recommended.
- Temperature reports.
- Impact reports.
- Condemnation certification.
- Dumping certificates.
- Lab reports assessing the damage.
- Quality control reports.
- Package certifications.
- Loading diagrams.
- Weight certificates.
- Affidavits.
- Carrier’s passing reports.
- Loading and unloading tallies.
How Does MercuryGate Streamline Freight Claims Management?
MercuryGate Claims centralizes data to support easy management and automation of any type of claim: loss and damage claims, over, short, and damaged , overcharge claims, vendor claims, and return authorization requests.
Software as a Service (SaaS), cloud-based portals like MercuryMyEZClaim seamlessly create, submit and manage the status of freight claims with fillable, pre-generated claims forms and follow-up letters. The platform supports direct uploads of photo documentation and other supporting documents. This creates visibility to each claim in-process and accelerates the process of bringing freight claims to a resolution.
MercuryCarrierClaim and MercuryMyEZClaim reduce transaction and administrative costs by eliminating postage, paper, fax, and file management, as well as the manual data errors that come with these processes.
FAQ: Additional Questions About Freight Claims
What is a claim as of freight costs?
A claim as of freight costs, also known as a transportation cost claim, pertains to disputing or seeking reimbursem*nt for charges associated with the transportation of goods. This could involve instances of overbilling, incorrect tariffs, or discrepancies in invoicing. To file such a claim, one typically needs to provide evidence such as shipping documents, invoices, and any relevant agreements or contracts. It’s advisable to communicate directly with the carrier or freight service provider to resolve billing discrepancies promptly.
How do you win a freight claim?
Winning a freight claim requires thorough documentation and adherence to the carrier’s claim filing process. Firstly, document any damages or losses with photographs and detailed descriptions. Provide copies of the bill of lading, delivery receipts, and any other pertinent paperwork. Follow the carrier’s guidelines precisely, including filing deadlines and required forms. Maintain open communication with the carrier throughout the process, and be prepared to negotiate if necessary. Winning a freight claim often hinges on the strength of the evidence presented and the ability to demonstrate the carrier’s liability for the damages or losses incurred.
How long does a carrier have to respond to a freight claim?
The time frame for a carrier to respond to a freight claim can vary depending on several factors, including the carrier’s policies and the nature of the claim. Generally, carriers are expected to acknowledge receipt of the claim promptly, typically within a few days to a week. However, the resolution of the claim may take longer, depending on factors such as the complexity of the claim and the carrier’s internal procedures. It’s essential to follow up regularly with the carrier and maintain communication to ensure timely processing of the claim.
How long do freight claims take?
The duration of freight claims can vary depending on factors such as the complexity of the claim, the responsiveness of the parties involved, and the carrier’s internal processes. In straightforward cases, claims may be resolved relatively quickly, often within a few weeks. However, more complex claims or disputes may take longer to resolve, potentially stretching over several months. It’s crucial to be patient and persistent while following up with the carrier regularly to expedite the claims process.
Who pays for freight insurance?
The responsibility for paying freight insurance premiums typically depends on the terms negotiated between the buyer and the seller or shipper. In some cases, the shipper may purchase insurance to protect the goods during transit, while in other instances, the buyer or consignee may be responsible for arranging insurance coverage. It’s essential to clarify insurance responsibilities and freight insurance coverage arrangements before shipping goods to ensure adequate protection in the event of loss or damage.
What does freight insurance cover?
Freight insurance provides coverage for loss or damage to goods during transit, offering financial protection to shippers, consignees, and other parties involved in the shipment. Coverage typically includes protection against cargo theft, damage caused by accidents, natural disasters, and other unforeseen events. The specific coverage and exclusions may vary depending on the insurance policy and the terms agreed upon between the insured and the insurance provider. It’s essential to review the insurance policy carefully to understand the scope of coverage and any limitations or exclusions that may apply.
What is a freight settlement?
A freight settlement refers to the resolution or agreement reached between parties involved in a freight claim. This could involve the carrier reimbursing the shipper or consignee for damages, loss, or overcharges incurred during transportation. Settlements may involve financial compensation, replacement of goods, or other forms of restitution agreed upon by both parties. Once a settlement is reached, it typically resolves the claim, bringing the matter to a close.
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