Freight claims are an inevitable part of shipping. Even in the most careful hands, there’s always the chance of damage. Claims offer a way to recoup losses if shippers are diligent about filing them. A claim isn’t a sure thing until it’s processed, and it’s not processed unless the reporting is accurate, clear, and complete. Companies must be diligent in how they handle damage, service failures, and overcharges and file claims accordingly.
What is a Freight Claim?
A formal request for payment made by a shipper or consumer to recover the cost of items misplaced, damaged, or delayed in transit is known as a freight claim. The party who is filing for the claim provides evidence of loss and damage to the shipment and must be familiar with the terms and conditions of their shipping contracts.
Types of Freight Claims
Damage Claim
When damaged products are delivered to their destination, a damage claim is made.
Loss Claim
A loss claim arises when products that are transported fail to arrive at their intended destination.
Delay Claim
When goods incur financial losses due to their failure to arrive at their destination within the prearranged timeframe, delay claims are made.
Shortage Claim
A shortage claim is filed when the quantity of delivered products is less than the amount that was initially shipped.
Claim for Concealed Damages
Claims for concealed damage occur when there is damage to the products that is not noticed right away upon delivery but is found out later on during unpacking.
Inaccurate Freight Classification
Filed when the shipping costs are affected by an incorrectly assigned freight class.
Overcharging or Unpaid Bills
Billing disputes or allegations of overcharging arise when the freight charges and the carrier bills are different.
Freight Claims Aren’t Guaranteed
It’s essential to submit complete and accurate freight claims that include all the relevant data and pertinent details. Incomplete claims, missing details, factual contradictions, and other inaccuracies will increase the time it takes to process a claim and may result in lower reimbursement or denial.
Exploring Freight Claims
When seeking recompense, ask yourself this critical question first: What’s the nature of your claim? Filing the wrong type of claim can also complicate payouts or delay processing times. Consider these categories to determine the nature of your claim:
- Damage – Visible physical damage evident upon delivery.
- Concealed damage – Hidden damage uncovered during intake.
- Shortage – Incomplete delivery as noted by inconsistency between the bill of lading (BOL) and POD.
- Concealed shortage – Incomplete delivery realized after receipt is taken.
- Refusal – Freight refused by consignees due to damage, inaccuracy, or incompleteness.
- Loss – The entire shipment is lost or destroyed because of the carrier.
- Overcharges – An incorrect rate applied to the freight resulting in incorrect costs.
Each type of claim comes with specific stipulations for submission. For example, shippers usually have up to nine months to file a damage claim, but a concealed damage claim may have a filing window as narrow as five days after delivery. And with a concealed shortage claim, the burden of proof is much higher compared to what is required for a refusal.
How do I Claim Freight?
Collect the documentation and images of the loss or damage for example invoices, and packing lists to claim your misplaced shipment. Completely fill out the carrier’s claim form which includes necessary supporting evidence. You should follow the carrier’s instructions and submit the claim within the designated timeframe. You must collaborate with the carrier to settle the claim and get paid for your losses.
Who Processes the Freight Claim?
Freight claims are typically processed by the carrier responsible for transporting the goods. The consignee or shipper initiates the claim, providing evidence of loss or damage, and the carrier’s claims department handles the assessment and resolution of the claim.
The detailed steps are mentioned below:
- Receiver or Shipper
The party who owns or receives the goods, also known as the shipper, starts the freight claim procedure. It is their duty to record the damage or loss and offer proof to back up the claim. Photographs, receipts, packing lists, and any other pertinent paperwork may be included in this proof.
- Transporter
When handling freight claims, the carrier – the business in charge of moving the goods – becomes extremely important. The carrier’s claims department often receives the claim after it is filed by the assignee or shipper. Trucking firms, airlines, shipping lines, and other transportation suppliers are examples of carriers.
- Freight Forwarder
A freight forwarder may help with the freight claim processing if they are involved in the transportation process. In addition to managing shipping logistics, freight forwarders can serve as a go-between for shippers and carriers.
- Third-Party Claim Processors
To handle and expedite the freight claims process, some businesses—particularly bigger ones—may hire insurance providers or third-party claims processors. These organizations are experts at evaluating claims, settling disputes, and promoting communication between shippers and carriers.
- Insurance Providers (if relevant)
The insurance provider for the merchandise may be involved in the claims procedure if the shipment is covered by insurance. To guarantee a quick and easy settlement, the consignee or shipper might need to work with the insurance company.
- Lawsuit Entity
Legal or arbitral bodies may become involved in conflicts that cannot be settled peacefully between the parties. This usually happens when parties cannot agree on issues pertaining to culpability, compensation, or other aspects of the claim.
Rely on Your TMS and a Paper Trail
To compile data for submitting a successful freight claim, rely on a meticulously maintained paper trail and your transportation management system (TMS). Robust TMS tools can expedite freight claims, improve approval rates, and ensure maximum reimbursement.
A feature rich TMS offers the ability to choose between full-service and self-service claims processing. Full-service processing for complex freight claims eases the burden of compiling information and preparing claims. Meanwhile, self-service claims processing relies on TMS data cultivation to provide the necessary information to file and expedite damage, shortage, refusal, loss, and other claims.
Why does a TMS matter? Speed and accuracy ensure claims are processed quickly. Freight claims filed with the aid of nVision Global’s Impact TMS boast an 87% collection rate at speeds 35% faster than the industry standard. Proper completion and accuracy are the difference between compensation for a shipping snafu and eating the cost of problems beyond your control.