In the logistics industry, it's helpful for shipping and carrier service workers to review freight claims 101 periodically. When products are lost or damaged in the shipping process, the shipper should file a freight claim to mitigate financial losses. Here's a deeper look at the importance of understanding freight claims 101.
Crash Course Summary of Freight Claims 101
The main point about freight claims 101 is that the manufacturer loses money when its logistics team fails to file claims for losses during shipping. A freight claim is a demand for reimbursement from the carrier when shippers are overcharged or face losses due to damaged packages. A signed agreement between the carrier and shipper should identify liability details, and what types of claims can be filed.
Despite this safety net for shippers, the carrier may disagree on the value of the loss stated in the claim. That's why shippers should carry additional insurance that covers losses the carrier won't cover. It's up to the shipper to not only file a claim when it's appropriate but also to ensure freight is adequately insured to avoid unexpected losses.
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Types of Freight Claims
A pallet can go through multiple trucks and forklifts and be handled by various people. Any point of this journey can involve disruption to the goods being shipped. Here are some of the multiple reasons for filing a freight claim.
- Damage: It's essential to take photos of your palletized freight before it ships. Be sure to include the shipping label in the image. These photos will prove that the goods were in pristine condition before being picked up by the carrier.
- Loss: You may file a loss claim when a shipment appears to be lost after time has elapsed without delivery. First, you should notify the carrier to investigate the case. Then wait for the carrier to confirm you should file the claim.
- Shortage: Shippers should advise carriers to inspect freight upon arrival before signing the Proof of Delivery (POD) form. This inspection will help confirm the number of product units that are stacked on pallets. If the count doesn't match your total when the order arrives, you must document the shortage on the carrier's receipt. From there, you can proceed to file a shortage claim.
- Concealed damage or shortage: This type of claim is up to the carrier since it involves damage discovered after the POD was signed. Consequently, the page may not agree to the claim amount on the POD.
- Carrier Accident: If the carrier gets in an accident during the delivery process and damages your goods, you may file a claim.
- Contamination: This claim involves items in healthy condition when the carrier picked up the cargo but was affected by environmental contaminants by the time of arrival at the shipping destination.
Legal Aspects of Freight Claims
You might recall from your freight claims 101 training that a freight claim is based on a carrier's breach of contract. All shippers trust carriers to transport goods safely from point A to point B. Pages agree to take responsibility for the cargo during this stage in return for a fee paid by the shipper. Understanding the basic principles of cargo liability is essential for professionals in the transportation industry.
A carriage contract can be negotiated between the shipper and the carrier. Options include the parties signing a Bill of Lading or waybill. The former functions as both a contract and receipt, while the latter can be used as evidence of an agreement and receipt. Both of these documents should list the items being shipped and the terms and conditions of the carrier.
The Process of Submitting a Claim
For any type of claim you file, it's crucial to report the damage to the carrier as soon as possible. You will need a cost/purchase invoice for the item(s) that triggered the claim. The damage needs to be documented with before and after photos. These images should reveal the condition of the package before unpacking as well as the damaged items. The claim application also calls for a detailed description of the damages and an estimated value of the claim.
What a Freight Claim Must Prove
As anyone with freight claims 101 knowledge may have guessed, the burden of proof is on the party that files the claim. You must prove the goods were in good condition when they left your hands and then damaged or lost by the time the shipment arrived at its destination. You must also provide a monetary amount for damages. Be aware there are different legal considerations based on the mode of transportation, such as ground, water, and air. Each of these forms of transportation has its timetable for filing a claim.
Once the carrier reviews the claim, the firm can either accept to pay the reimbursement amount, deny the claim or negotiate a settlement. It's essential to file the claim promptly in case it erupts into a lawsuit.
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