6 Types of Freight Claims and 6 Reasons for Denial

6 Types of Freight Claims and 6 Reasons for Denial

Damaged FreightAs a freight broker/intermediary, Logistics Plus has no legal liability for loss and damage claims that occur as a result of carrier services we source for our customers; although we do offer to assist our customers with the processing of freight claims. No one likes to deal with missing or damaged goods or filing freight claims, but sometimes it happens. Here are six common types of freight claims.

  1. Damaged Claim – If physical damage to your shipment packaging is visible as noted by your consignee on the delivery receipt (or proof of delivery, POD), you can file a damage claim. Typically, you have nine months to submit a claim for visibly damaged goods. With proper evidence, the carrier will most likely refund a portion of your shipping costs. However, you’ll have to pay your freight invoice upfront and get reimbursed for any losses when the claim is processed.
  2. Concealed Damage Claim – When damage is concealed, that generally means it isn’t visible until after delivery, which means it was probably not notated on the POD. Concealed damaged claims are harder to prove. Most carriers only allow a five-day window to file a concealed damage claim (some even less based on each carriers’ rules tariff). If more than the allotted timeframe passes before you file, the carrier that handled your shipment will likely deny your claim. Including photos and any other evidence, you have with your claim will increase your odds of getting a partial refund.
  3. Shortage Claim – If your shipment shows up with a shortage and the consignee notates it on the POD, you can file a shortage claim. This can happen if the packaging is not intact and freight is missing. It can also happen if the amount of freight delivered doesn’t match what’s printed on the original bill of lading (BOL). Again, you typically nine months to file a claim. Expect to pay your freight upfront and then get reimbursed once the claim has been processed.
  4. Concealed Shortage Claim – Like a concealed damage claim, concealed shortage claims occur when a missing product is not noted on your POD, meaning it isn’t visibly evident that you’re short until after delivery. With concealed shortages, the packaging is usually intact, and it’s not obvious that freight delivered doesn’t match freight specified on the original BOL. Concealed shortage claims are difficult to prove, so you’ll often find that carriers push back. As with other concealed claims, time is of the essence. You only have five business days (or less) to file a claim.
  5. Refused Claim – Sometimes, a shipment delivers and it’s the wrong freight, the product is damaged, or the shipment is late. Consignees have the right to refuse part or all of shipment if they are unhappy with the condition of their freight. If your consignee refuses the shipment, it’s returned to the carrier’s delivery terminal. The carrier will contact you and ask what you want them to do with your shipment. Your options are to have it shipped back to you, have it sent to another address, or have it disposed of. In most cases, you will not have to pay your invoice.
  6. Loss Claim – A loss claim is a worst-case scenario because it means your entire shipment was lost by the carrier. This most commonly happens when shipment paperwork is separated from the freight. When this occurs, the carrier typically has a week to attempt to locate your freight. If they can’t find it, you shouldn’t be charged for shipping.

The carrier must acknowledge receipt within 30 days (49 CFR 370.5). Carriers must pay, decline, or make a firm compromise settlement offer within 120 days after receipt of the claim (49 CFR 370.9). The time period for commencing civil action cannot be less than two years from the date the carrier gives written notice to the claimant disallowing the claim (49 USC 14706e). Since there are legal time limits for filing and processing claims, you must obtain registered mail or other receipts indicating when you filed your claim.

Now that you understand the most common freight claim types, here are six common reasons why freight claims may be denied.

  1. Incomplete/Inadequate Documentation – When filing a freight claim, shippers should be sure to follow NMFC minimum documentation requirements.  Probably the most common reason for a claim being denied is because of incomplete information and/or documentation. Logistics Plus offers help as to what documentation should be filed and can assist customers with the filing process.
  2. Mitigation – Per NMFC guidelines, it is the responsibility of a shipper to mitigate the costs of a claim to the least amount possible, which essentially means shippers are required to do their part to help minimize financial loss.  Mitigation is usually done by selling the damaged item at a discount, selling it for parts or scrap, or by repairing the item rather than replacing it completely.  If making repairs, the cost of repairing the item would be the amount filed for in the claim.
  3. Freight Charges Not Paid – Even if the freight charges are going to be refunded or credited in their entirety¸ per industry guidelines set by the NMFC, the freight charges for a shipment must be paid before a claim can be settled.
  4. Pallet/Piece Count – A bill of lading will typically denote having received “x” number of skids/pieces intact (shrink-wrapped/non-shrink wrapped) when a shipper performs their own load and count.  When a carrier doesn’t perform the load and count, it’s considered that the number of skids/pieces tendered to the carrier is the quantity shipped, since they aren’t able to perform a piece count of the broken-down shipment before it was packaged to verify quantity.  For example, a carrier is tendered 2 shrink-wrapped skids comprised of 25 individual boxes on each skid for a total of 50 boxes for the entire shipment, which the shipper shrink-wrapped and loaded onto the truck themselves.  The carrier will likely mark the BOL as having received 2 shrink wrapped skids said to contain 50 boxes.  When both skids arrive at the consignee and a shortage of 1 box is discovered, it’s difficult to prove that the shipment only contained 50 boxes to begin with. The shipper could have packaged the shipment with only 49 boxes by accident.  The only thing the carrier knows for certain is that 2 skids were tendered, and 2 skids were delivered, as there was no opportunity for the driver to verify or count all 50 boxes, especially when skids are already shrink-wrapped when a carrier arrives for pickup.
  5. Clear Delivery – Establishing carrier liability without notation of damage on the delivery receipt can be difficult.  In spite of what some shippers may think, writing “Subject to Inspection” on the POD does not serve as sufficient evidence that any specific damage has occurred, because it can create a scenario in which the consignee is the only witness to the discovery of the damage, which leaves reasonable doubt as to who was in possession of the shipment when the damage occurred.
  6. Act of God – Carriers are exempt from liability for things like hurricanes, floods, and fires, which are considered an act of God and beyond a carrier’s control.

Shippers' Interest Cargo InsuranceYou should be aware that all freight shipments come with some sort of “limited liability coverage.”  This coverage is determined by the carrier and varies depending on the commodity type or freight class of the goods being shipped (more LTL carriers are going to limited liability by freight class). For the most part, carrier liability covers up to a certain dollar amount per pound of freight.  It is not uncommon to find that the included liability coverage is less than the actual value of the goods being shipped. New goods liability limits generally run between $2 and $10 per pound; while used goods will typically be capped at $0.10 to $0.50 per pound. Also, special commodities also have released-value liability limits. So, if you are shipping a high-value shipment (new or used), you should consider some sort of additional shippers’ interest cargo insurance coverage.

Need freight claims help or are you looking for a freight claims management solution? Contact Logistics Plus – we’re here to help!

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Logistics Plus Medical Customer Testimonials

Logistics Plus Medical Customer Testimonials

Over the past several months, the Logistics Plus Medical team has sourced and delivered over 10 million pieces of PPE around the world, including KN95 masks, disposable surgical masks, gloves, face shields, goggles, hand sanitizers, thermometers, and air purifiers (including a 1 million face shield order for a state procurement agency). As a part of our ongoing efforts to help fight the battle against Covid-19, we are proud that we have been able to leverage our sourcing, warehousing, and fulfillment expertise to help make a difference. As evidenced by the testimonials below, we have many happy and satisfied customers.

PPE Testimonials

read testimonialsNorthern Nevada Center for Independent Living
“We were having quite a challenge finding a vendor who could fulfill our PPE needs quickly. Fortunately, Logistics Plus was suggested. Logistics Plus has been able to fulfill our orders quickly and accurately. We also appreciate the flexibility they have. It’s a great feeling to know that we have our PPE vendor identified. We can feel confident knowing we can be responsive to our community’s PPE needs. Thank you Logistics Plus!”

St. Martin Center
“We’re so grateful for your generous provision of masks for us to distribute to the homeless through our Bishop’s Breakfast program. Logistics Plus has been an amazing support during this pandemic, and this is just one more example. Because of this gift, the homeless population will have more protection from COVID-19. We appreciate your kindness in providing these masks!”

Large Regional Health Care Provider Based in the State of Maryland
“Organizations talk about building business partnerships, Logistics Plus puts into practice everything other organizations speak of. The team is accessible, reliable, and looks out for their customers’ best intentions. When I interact with them it is like an extension of my own company. They have the expertise and the know-how to excel in these unprecedented times, hitting every deadline and milestone we agreed to along the way. They are true HealthCare Heroes!”

Regional Hospital/Medical Center
“Thank you very much. This is a really big help. You have met our PPE needs a couple of times now.
We have COVID patients and provide coverage to a wide multi-county service area. While we are active, we have not been designated as a hot spot. While that is good, the air bridge, the state, and the fed do not help us out. That has resulted in us being very challenged. We will utilize you as we need and can. Don’t know how you pulled this N95 off, but find some more please.”

Pennsylvania-Based Employee
“Just took delivery of 10 surgical masks from your website.  Easy transaction!”

Utility Equipment Services Company
“I know you that you transport gigantic pressurized air tanks, locomotives, and tons of other huge equipment from one part of the world to the other; but those 250 face masks, weighing only what, 2 lbs in total? Seriously, I cannot thank you all enough for delivering our state-mandated masks right on time. We were closing at 3:30 pm last Friday, and Julie made it here at 3:28, and it was snowing. We did have some other options, but the other vendors are still waiting for the masks to make their way into their own warehouses, let alone it delivering to us. Witnessing your seriousness and kindness was great too. Thank you all and best regards!”

Voices for Independence
“I would like to thank everyone at Logistics Plus for the two cases of surgical masks.  As stated in previous communications, those masks will be distributed to our dedicated and hardworking caregivers who continue to serve individuals with disabilities in the community. Every day our caregivers provide hands-on support to consumers in need of assistance with their daily living activities. These surgical masks will offer increased safety to both our caregivers, who are providing an invaluable service throughout this pandemic and the consumers they provide services too. Logistics Plus is a valuable asset to our community, and we greatly appreciate you.”

Wesbury Retirement Community
“Please tell Jim that staff is starting to wear the masks that Wesbury bought from LP and they are raving about them. They are great! Tell him – thank you.”

Able To Feel Confident

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We were having quite a challenge finding a vendor who could fulfill our PPE needs quickly. Fortunately Logistics Plus was suggested. Logistics Plus has been able to fulfill our orders quickly and accurately. We also appreciate the flexibility they have. It’s a great feeling to know that we have our PPE vendor identified. We are able to feel confident knowing we have the ability to be responsive to our community’s PPE needs. Thank you Logistics Plus!

-Lisa Bonie, Executive Director

Logistics Plus Named a Finalist For 2020 Heavy Lift Awards

Logistics Plus Named a Finalist For 2020 Heavy Lift Awards

Project of the Year Finalist-SquareLogistics Plus has been selected as a Project of the Year finalist for the 2020 Heavy Lift Awards presented by Heavy Lift & Project Forwarding International (HLPI) magazine. The Project of the Year award is based on the following three criteria:

  1. Unique techniques and innovative approaches to overcome project challenges
  2. The use of multiple transport modes
  3. The employment of advanced equipment and/or technology

Due to the COVID-19 pandemic, the 2020 Heavy Lift Awards will be hosted as a virtual event this year. The awards will now begin on October 5th and run until October 21st with 13 days dedicated to the different award categories. As the leading publication reporting on the heavy lift, break bulk, and project cargo industry, HLPFI has established the Heavy Lift Awards to recognize and reward excellence for complex logistics, transportation, and engineering projects around the world.

Click the flyer image below to view the complete Logistics Plus award entry:

        project of the year LP

Accurate Shipping Weights – Why Do They Matter?

Accurate Shipping Weights – Why Do They Matter?

accurate shipping weightsJust because you have filled out the paperwork, packed your goods, and arranged a pickup, you can’t always expect your shipment to run smoothly.  An important factor in the success of your shipment relies on the details and specs you provide on the Bill of Lading (BOL).

One potential barrier to a smooth shipment is a freight adjustment. This occurs when the carrier has to correct inaccurate shipment weights or dimensions, resulting in additional charges for the shipper. When a carrier weighs a shipment at its facility, it receives a Weight Inspection Certificate. This document is the official weight for your shipment and it serves as the basis for any weight adjustment.

So how do you make sure that you provide accurate shipping weights to avoid additional charges?

  • Use a certified scale and test it before each use
  • Weigh the entire shipment, not individual packages
  • Be sure to include the packaging and the pallet in your listed weight (this is a common mistake)
  • Take a photograph of the scale as proof of weight
  • Call Logistics Plus if you have any additional questions

Additionally, with the NMFC now designating more commodities for density-based classifications, preparing an accurate BOL is as important as ever. If you note the wrong weight for a density-based product on your bill of lading, there is a good chance that the LTL carrier will re-weigh your shipment and charge you the higher rate using the same freight class you designated on your BOL rather than adjusting the freight class according to the new weight and dimensions. Specifically, this is how one carrier has worded their new rules tariff item specific to this situation: “In the case where the weight is changed on a shipment that is a density-based item in NMFC, the freight classification on the original bill of lading will be used unless the shipper or consignee can produce irrefutable supporting documentation showing clear evidence of the LxWxH and corresponding weight of each handling unit of the shipment.”

The freight experts at Logistics Plus are happy to help you with any questions or issues regarding freight characteristics. Contact us using the button below or email us at nadops@logisticplus.net if you have any additional questions.

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