DOs and DON'Ts of LTL Damage Claims

This edition of #LetsTalkLogistics is going to be a bit more 'educational' than it is 'opinionated'.?

My goal with this week’s edition is to detail the claims process so that you can use this as a resource for your business!

What is a Freight Claim?

A freight claim is a legal demand for compensation when goods are damaged, lost, or arrive short during transit. Common types of freight claims include:

• Damage: Visible damage to goods, often noted on the proof of delivery (POD).
• Loss: When goods are picked up but never reach their destination.
• Shortage: When part of the shipment is missing upon arrival.
• Concealed Damage: Damage discovered after unpacking the goods.

Dos and Don’ts of Filing a Damage Claim

Do:

• Document EVERYTHING: From the moment damage is discovered, take detailed photos and keep ALL relevant paperwork, including the bill of lading (BOL), commercial invoices, and proof of delivery (POD).

• File Promptly: Submit your claim as soon as possible. Carriers typically require damage claims to be filed within 9 months and concealed damage claims within 3-5 business… so the sooner the better in my opinion!
• Pack Properly: Ensure your freight is well-packaged to withstand the rigors of LTL shipping. Use sturdy materials like crates or oversized pallets to protect your goods.
• Select Reputable Carriers: Work with carriers known for their careful handling and good track record to minimize the risk of damage.

• Communicate Clearly: Label your shipments with handling instructions, like "Fragile" or "Do Not Stack," to guide carriers in proper handling.
• Notate Damage on the POD: If the consignee doesn’t notate the damage on the POD, the carrier will only pay out a MAX amount equal to ? of the claim amount. Concealed damage claims are rarely paid out and the carrier is only liable for ? the value right off the bat.?

Don’t:

• Neglect Packaging Standards: Failing to comply with the National Motor Freight Classification (NMFC) packaging requirements can result in rejected claims.
• Delay Inspection: Inspect shipments immediately upon delivery to identify and report any damage before the carrier leaves.

• Forget to Pay Freight Charges: Ensure all freight charges are paid in full before filing a claim; otherwise, the carrier might not process your claim.
• Dispose of Damaged Goods Prematurely: Keep damaged goods and their packaging until the carrier has inspected them or provided further instructions.
• Ignore Insurance Options: Consider purchasing additional insurance for high-value or vulnerable shipments to cover gaps in carrier liability.

Relying Solely on Carrier Liability is Risky. WHY?

While carrier liability can provide some financial protection in the event of damage or loss, it often falls short - especially for high-value or sensitive shipments.?

1. Limited Coverage: Carrier liability is often capped at a certain dollar amount per pound, which might be insufficient for high-value goods. For instance, many carriers cover used goods for as little as $0.50 per pound.
2. Strict Conditions: Claims can be denied if packaging doesn't meet specific standards or if deadlines for filing claims are missed.
3. Complicated Process: The claims process can be lengthy and cumbersome, with carriers frequently denying responsibility and shifting blame.

The Case for Purchasing Additional Insurance

To ensure your high-value shipments are adequately protected, consider purchasing additional cargo insurance. This type of insurance offers several advantages:

• Comprehensive Coverage: Cargo insurance can cover the full value of your goods, reducing the financial risk in case of damage or loss.
• Streamlined Claims Process: Insurance companies often have more straightforward and quicker claims processes compared to carriers.
• Peace of Mind: Knowing that your goods are fully covered allows you to focus on your business without the constant worry of potential losses.

By following these guidelines, you can navigate the LTL damage claim process more effectively and reduce the impact of damaged freight on your business. Remember, preparation and prompt action are your best defenses against the inevitable challenges of LTL shipping.

Stay tuned for more insights and tips in our next edition of Let's Talk Logistics!