CDS Logistics Blog
Here you'll find freight claim tips, logistics news, and tricks for reducing supply chain costs. Check back often, as we're always adding new posts.
How long do I have to file a claim, and how fast does the carrier have to pay me?
According to the Carmack Amendment, you have 9 months to file a claim, from the date that the shipment is delivered. For lost shipments, you have 9 months to file from the date that the shipment was reasonably expected to arrive.
For concealed damage, you have 5 days to file. (You can technically file a concealed damage claim later than this, but it becomes much, much more difficult because after the 5 days, the onus falls on you to prove that the damage did not happen after delivery.)
The carrier has 120 days to either pay or decline to pay your claim. They also must acknowledge receipt of your claim within 30 days.
Note that these dates apply to the United States, other countries will have different deadlines.
Disclaimer: The above information is not legal advice; neither CDS, Dick Lucarelli, nor TranSolutions Inc accept any liability for its content.
I have about $8,000 worth of paper products that sustained water damage during Hurricane Harvey. Is this claim recoverable? Won’t my carrier just deny it using the Act of God defense since it was damaged during the hurricane?
The Act of God defense doesn’t automatically absolve a carrier of all liability. This defense can only be used when there was nothing that the carrier could have reasonably done to prevent the damage.
Of course, it all depends on the circumstances of the claim. For example, let’s say your carrier decided to send your shipment into the path of a known hurricane. Instead, they should have chosen an alternate route or held it at the pickup terminal until the hurricane had passed. In this case, the Act of God defense is easy to disprove, because the carrier’s actions were negligent. However, suppose your product was already sitting in a Houston terminal. At some point the carrier would know that the terminal would flood – would that timeframe give the carrier ample time to move the products to a dryer city, or were they prevented by gridlock? This is where the Act of God defense is harder to refute.
However, even if your carrier has a valid Act of God defense, they’re still responsible for mitigating the loss once they become aware of the Act of God. Take the example of the flooded Houston terminal. Maybe heavy traffic prevented the carrier from moving your product to a different terminal. But in the terminal itself, was there free space on higher racking? Did your carrier move the products to all available top racks, or did they just leave everything on the floor? If they failed to take reasonable actions to mitigate the loss, your carrier would still be partially liable, and they would need to pay at least part of the claim.
Need help with a tough claim? Contact us here.
Disclaimer: The above information is not legal advice; neither Dick Lucarelli nor TranSolutions Inc accept any liability for its content.
Freight claim management is all about attention to nitty-gritty details. However, in this post, we’re going to step back and take a look at the big picture procedures that will take your recoveries to the next level.
1. Give Instructions to Each Department
It’s a common misconception – the idea that freight claim management is confined to the claims department. In reality, departments ranging from receiving to purchasing play an important role in ensuring that freight claims are paid and properly processed. For example, if the receiving department handles the paperwork or incoming shipment incorrectly, the claims department will be unable to collect reimbursement for the damaged shipment.
Therefore, it’s essential that you communicate each departments’ responsibilities toward freight claim management.
2. Streamline Claim Management with Pre-Written Forms
Although every claim is unique, the same set of steps will be repeated across claims, such as submitting the claim form, a request for inspection, or a follow-up if the carrier doesn’t respond to your claim.
Ensure that your claims staff aren’t wasting time by writing these requests from scratch each time. Be sure to provide your claims staff with stock letters, templates, and emails that they can use for each claim.
3. Create a Carrier Master Agreement
Unfortunately, most claims fail before they are even filed. Why? Because the carrier has written liability limitations right into their tariffs, and most shippers fail to negotiate better terms for themselves. This is why successfully negotiating an agreement that works in your favor will make it possible to recoup far more losses than if you’re shipping under the terms set out by the carrier.
4. Argue Declined Claims with Legal Evidence
Most claim clerks lack the training needed to argue against a carrier who declines their claim. This can result in the loss of thousands of dollars that could have been recovered with the proper legal argument. However, it doesn’t take a degree in transportation law to be able to effectively argue these claims. Usually it’s a simple matter of a few hours of training and some templates for arguing against the most common types of declinations.
5. Give Claims Staff Ongoing Training
Most businesses have a bias regarding which departments are eligible for training. Sales teams are sent to training workshops, and the manufacturing floor manager is encouraged to upgrade his Six Sigma certification. However, claims clerks are rarely given additional training, and as a result shippers miss out on tens or hundreds of thousands of dollars in recoveries. A monthly coaching program is an affordable way for staff to get advice on difficult claims while receiving training at the same time.
Want more information on how to implement these programs? Download our Freight Claim Assistance Program Brochure.
Shipment delays are a common experience. Your carrier tells you that your shipment will arrive by next Thursday, but it doesn’t arrive. Your shipment might be delayed for several days or weeks before it is actually delivered. The question is – can you be compensated for the shipment delay by filing a freight claim?
Unfortunately, there’s no cut and dry answer to this question.
What Encompasses a Shipment Delay?
There are two questions to ask when reviewing shipment delay claims:
1. Did the carrier deliver within “reasonable dispatch”?
2. Was it clear that the shipment had to be delivered by a particular time?
Shipment Delay Outside of Reasonable Dispatch
“Reasonable dispatch” refers to the amount of time that a shipment should reasonably take to deliver. A carrier may be required to reimburse you for damages if they took longer than a reasonable amount of time to deliver the shipment. If the carrier took longer than they initially told you, but they were still within reasonable dispatch, then they are generally not liable.
Shipment Delay with Required Delivery Time
There are some cases where your shipment becomes worthless if it is not delivered by a particular date and time. If you make this clear to the carrier and include it in your contract, then you are within your right to be compensated by the carrier for your loss caused by the delay.
The courts have favored cases like this, where seasonal merchandise was delayed to the point that it could not be sold until the following year. This is an example of a situation when the carrier may be found liable in the case of a shipping delay.
How to Protect Yourself from Shipment Delays
Keeping these things in mind, here are a few tips to protect yourself from a shipping delay:
- If it’s essential that your shipment is delivered by a certain date and time, make sure that this is clearly stated in your contract with the carrier.
- Find out what the reasonable dispatch is for your delivery. If the reasonable dispatch for the trip is greater than you can afford to wait for your shipment to be delivered, upgrade to a faster form of shipping.