Basics of Freight Claims
Freight claims is a stressful part of the freight shipping. Learning the basics of freight claims helps shippers mitigate and learn how to handle claims - should they arise.
Every freight shipment is covered by limited liability, meaning the carrier is responsible for loss and damage under the Carmack Amendment. The amount of coverage is a set dollar amount per pound of freight determined by the carrier and based on the commodity.
Reasons for a Claim:
Physical Damage
Lost in Transit
Water Damage
Claim Expertise Matters:
Need an expert to handle your freight claims?
$548,124.87
TLI is currently on track to recoup $548,124.87 in claim reimbursements in 2023.
Our logistics experts help mitigate claims and claim experts help ensure the right process to recoup losses in damaged/lost freight.
At-Time of Delivery
Inspect the Delivery Carefully
Inspect the delivery carefully for any damages. If you see noticeable damages, make sure to notate and take pictures of the damaged freight.
If you find damage after the delivery (concealed damage), ensure to contact TLI right away to make claim. Concealed damages must be filed within 5 days of delivery.
Notate Damage Immediately
The consignee must notate the damages in detail at the time of receiving. Signing a proof of delivery without a damage notation is marking the shipment as cleared and lowers the settlement payout.
It's also important to notate damage, without placing blame on the notation. An example is writing "3 inch tear in carton" instead of "3 inch tear in carton due to improper packaging".
Take Pictures of Damaged Freight
Capturing visual evidence of damaged or improperly handled shipments serves as undeniable documentation that can greatly aid in the claims resolution process. These images provide concrete proof of the condition of the goods at the time of shipment, reducing the likelihood of disputes and expediting the claims procedure. By ensuring transparency and accountability, these photographs not only strengthen the shipper's case but also foster better communication and collaboration with carriers, insurers, and other stakeholders involved.
Keep the Product
Never discard the product until the claim has been resolved. The carrier has the right to inspect the damaged product. They also have the right to take ownership of and salvage the product if a claim is paid in full. Getting rid of the damaged product may result in the claim not getting paid in full or denied altogether.
WARNING: Hazmat Products have special requirements that vary by product. Please contact TLI's Claim Department for next steps when it comes to Hazardous Material.
Claim Reimbursement
Carrier's are not always legally obligated to pay out freight damages. There are limitations to how much compenssation is reimbursed and when the carrier is liable for damages.
Carriers are Liable When:
- Loss is a direct result of Carrier Negligence
- There is proof of Carrier Negligence
- Only up to a certain Dollar Amount
More than half of claims are denied entirely because of lack of proof or not properly notating damages at time of delivery.
Less-than-Truckload (LTL) Carriers are only liable up to the limited-liability coverage in specific contracts. While contracts vary, a good rule-of-thumb is displayed in the Standard Industry Coverage section. Due to the nature of LTL networks and how freight is handled, there are higher chances of claims in this type of shipping.
Standard Industry Coverage
| Mode | Standard Coverage |
|---|---|
| Less-than-Truckload (LTL) | $5.00 Per Pound |
| Volume | $0.50 Per Pound |
| Full Truckload (FTL) | Maximum $100,000 |
| Domestic Air | $0.50 Per Pound |
| Carriers | $500 Per Container |
*Actual Coverage Varies by Carrier
Need reliable insurance coverage? TLI is able to purchase additional all-risk insurance coverage for your high-value shipments. All-Risk insurance can help shippers get reimbursed, regardless of carrier negligence.
