Hubbry Logo
Freight claimFreight claimMain
Open search
Freight claim
Community hub
Freight claim
logo
7 pages, 0 posts
0 subscribers
Be the first to start a discussion here.
Be the first to start a discussion here.
Freight claim
Freight claim
Freight claim
View on Wikipedia
from Wikipedia

A freight claim or cargo claim is a legal demand by a shipper or consignee against a carrier in respect of damage to a shipment, or loss thereof.[1][2][3]

Typically, the claimant will seek damages (financial compensation for loss), but other remedies include "specific performance", where the cargo-owner seeks delivery of the goods as agreed. At common law, any carrier has a duty to act with reasonable despatch.[4][5] A "common carrier" may have strict liability,[6][7] but normally the standard of care is only one of "due diligence", or acting "properly and carefully".[8]

[edit]

The purpose of a freight claim is for the carrier to reimburse the shipper / consignee so as to put them in the position is if the carriage had been properly had carried out according to the bill of lading.[9][10] For this reason, claimants are generally expected to file a claim to recover their costs, excluding profits. In very rare cases some profits may be recoverable, but a court will normally consider lost profits as non-recoverable economic loss. [11]

In most cases, redress will be paid by the carrier's insurer or P&I Club, and so the law of insurance will determine quantum of damages. Loss is deemed either "total" (either "actual" or "constructive") or "partial".[12][13] If the insurance policy is a "valued policy", the amount agreed is, in the absence of fraud, conclusive (except in cases of "constructive total loss", when the true market value prevails).

Under contract law, claimants are obliged to take reasonable measures to mitigate loss. For example, if the damaged product has retained some value, the carrier would only be required to pay for the difference between the original value and the damaged value. The claimant would then be free to salvage the damaged product by selling it at a reduced cost.[14]

The consignee is entitled to inspect the goods, and to reject them if they are damaged or fail to comply with description. The inspection should take place at the first reasonable place and opportunity; this will often be at the consignee's depot or place of business. At the time of delivery, the consignee should examine the shipment for loss or damage, and should note any issues on the delivery receipt; this will be used as evidence to back up the claim.[15]

If significant evidence of loss or damage is noticed on delivery, the consignee will be entitled to reject the shipment,[16] and may also have the option to cancel the entire contract.

If the consignee signs off on the delivery receipt but the damage is concealed (or "latent" or "hidden") and is discovered only subsequently, a claim will still be allowed provided it is made within a reasonable time.[17] In this case, the shipper or consignee must show that the damage was indeed caused by the carrier, rather than by the shipper or consignee.[15][18] In general, some of shippers actively or passively use a shipping damage indicator[19] to help inspect concealed damage which decreases dispute of damage.

The carrier will normally require the shipper to pay freight (the "shipment invoice") in advance; otherwise a"clean" bill of lading will not be issued, and the document will declare "Freight Not Paid". In the event of loss or damage, the consignee would file a freight claim against the carrier for (i) damages to cover the loss and (ii) reimbursement of any freight paid. The shipper will not be able to make any claim except as an agent of the consignee.

Carrier liability

[edit]

The extent of the carrier's liability may depend upon the shipping mode and the governing bodies. The Carmack amendment[clarification needed] states that motor or rail carriers are liable for the full loss.[citation needed] Conversely, the US COGSA states that the carrier is liable for no more than $500 per package.[20]

In the case of import/export transactions international conventions on limitation of liability may apply.[21][22]

Article IV of the Hague-Visby Rules lists more than 17 exclusions of the carrier's liability. Other international conventions such as the Hague Rules, the Hamburg Rules and the Rotterdam Rules have similar provisions exempting liability.

Perhaps the four main scenarios in which a carrier is not deemed liable for damage to goods are:[23]

Filing a freight claim

[edit]

Each carrier typically provides a standard form specifically for filing freight claims. However, by law, no particular form is necessary, as long as the following four details are present:

  • The shipment must be specified
  • The loss or damage type must be specified
  • The total of the amount claimed must be specified
  • A clear demand for payment must be present

Information to identify the shipment may include the freight bill PRO #, the vehicle number, and the delivery date.

In addition to this basic information, the following documentation should also be provided:

  • Shipment invoice
  • Delivery receipt
  • Bill of lading
  • Invoice showing the value of the product being claimed[27]
  • Invoices for costs incurred (i.e. repairs or replacements of the product)

Additional supporting documentation may also be included or required.[28]

Filing deadlines

[edit]

Different rules and filing deadlines will apply depending on the shipping mode. This is due to differences in how specific shipping modes are governed.

Rail and motor carriers are governed by the Carmack Amendment. The Carmack Amendment states that claimants have a minimum of 9 months from the date of delivery to file a freight claim.

Conversely, ocean carriers that service the US are governed by the Carriage of Goods by Sea Act (COGSA). This act requires that claimants file a claim within 3 days of delivery.[29]

See also

[edit]

Further reading

[edit]

References

[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Freight claim

View on Grokipedia
from Grokipedia
A freight claim is a formal legal demand made by a shipper, , receiver, or their agent against a transportation service provider (such as a motor carrier, , or other ) for financial reimbursement due to the loss, damage, shortage, or delay of goods during transportation. In the United States, freight claims involving interstate motor carrier shipments are primarily governed by the Carmack Amendment (49 U.S.C. § 14706), which holds carriers liable for the actual loss or injury to property transported under a , imposing a near standard without requiring proof of . Claims typically arise from visible damage (apparent upon delivery), concealed damage (discovered after unpacking), shortage (partial receipt of goods), or complete loss (non-delivery), with claimants required to preserve the and for inspection to support their case. To file a claim, a written submission must include facts sufficient to identify the shipment, an assertion of liability, and a specified or determinable amount of money, as required under federal regulations. Under the Carmack Amendment, may not impose a claim filing period of less than nine months after delivery, while the period for filing a civil action is not less than two years from the carrier's written disallowance of the claim. Evidentiary challenges are especially pronounced in concealed damage cases, where proving the goods were and that no intervening damage occurred after delivery can be difficult. To establish a under the Carmack Amendment, the claimant must demonstrate receipt in good condition, delivery in a damaged or lesser state, and the value of the loss, after which the burden shifts to the carrier to prove one of several defenses, such as an , the shipper's fault, an act of public authority, an act of public enemy, or the inherent vice or nature of the goods.

Overview

Definition

A freight claim, also known as a cargo claim or loss and damage claim, is a formal legal demand made by a shipper, , or their authorized agent against a for monetary compensation due to the loss, damage, or shortage of goods during transportation. In the United States, such claims are primarily governed by the Carmack Amendment (49 U.S.C. § 14706), which imposes on interstate motor carriers and for the actual loss or injury to cargo while it is in the carrier's care, custody, and control, without requiring proof of unless the carrier establishes one of the recognized exceptions. A freight claim differs from a general insurance claim, as it is directed at the carrier's under the and federal regulations rather than coverage under a separate freight insurance policy, which shippers may purchase to protect against risks beyond the . It is also distinct from informal customer service requests or complaints, as a freight claim constitutes a structured legal demand that must comply with specific regulatory requirements, including timely filing and supporting documentation, to preserve the claimant's rights.

Purpose and scope

The primary purpose of a freight claim is to secure financial compensation for the actual loss, damage, shortage, or delay of goods that occurs while the shipment is under the carrier's care, custody, and control during transportation. This mechanism holds the accountable and seeks to by restoring them to the financial position they would have occupied had the arrived intact and on time. The scope of freight claims is strictly limited to events that arise during transit, encompassing only those losses or injuries that occur while the goods are in the 's possession. Claims do not extend to damage or loss that happens before the carrier receives the shipment or after delivery to the . Successful claims typically result in monetary reimbursement equivalent to the actual value of the loss or damage, reimbursement of reasonable repair or reconditioning costs to restore the goods' , or, in some instances, replacement of the affected items. Freight claims may address various categories of issues, such as loss, visible damage, concealed damage, or shortage, which are classified in detail in the types of freight claims section.

Parties involved

The primary parties involved in a freight claim are the shipper (also known as the ), the , and the carrier. The shipper is the entity that tenders the goods to the carrier for transportation, while the consignee is the party designated to receive the shipment at its destination. The carrier is the (such as a trucking company, railroad, or parcel service) responsible for the safe transit of the goods. A freight claim may be initiated by the shipper, the , or a third party that possesses legal title or interest in the goods, with standing to file depending on the terms of the and who bears the risk of loss at the time of the incident. In practice, the consignee is often the preferred party to file when loss, damage, or shortage is discovered upon delivery, due to their firsthand knowledge of the shipment's condition. The shipper may file if the consignee is unable or unwilling, or if the shipper retains title during transit. Intermediaries such as freight brokers and typically arrange transportation between shippers and carriers but are generally not liable for cargo claims under the Carmack Amendment, which places primary liability on the carrier. Brokers may assist in facilitating the claim process or filing on behalf of a principal if properly authorized, but they do not assume direct responsibility unless contractually agreed otherwise. () may act as agents for the shipper or in managing claims. Insurers may become involved if cargo insurance covers the loss, often subrogating to the claimant's rights against the carrier after .

Carrier liability rules

Under the Carmack Amendment (49 U.S.C. § 14706), motor carriers engaged in interstate transportation of property are generally liable for the actual loss, damage, or delay to the goods while in their custody, without requiring proof of by the claimant. This provision imposes a near standard, making the carrier responsible for the "actual loss or injury to the property" caused by the receiving carrier, delivering carrier, or another participating carrier in the route. To establish a under the Carmack Amendment, the claimant (typically the shipper or ) must prove three elements: (1) delivery of the goods to the in good condition, (2) arrival in a damaged or missing condition, and (3) the amount of loss or damage. Once these elements are shown, a presumption of carrier liability arises, and the burden shifts to the carrier to avoid liability. The can rebut this presumption by proving both that it was free from and that the loss resulted from one of five recognized exceptions: (1) an (such as natural disasters like floods or severe weather beyond reasonable anticipation and control); (2) an act of a public enemy (such as wartime hostilities); (3) an act or default of the shipper (such as improper packaging or loading); (4) an act of public authority (such as government quarantine or embargo); or (5) inherent vice or nature of the goods (such as natural decay in perishable items where the carrier followed handling instructions). These exceptions are narrowly construed, and the bears the their applicability. Carriers may also limit their liability through written agreements or declared values with shippers, provided the terms are reasonable and properly disclosed. Claims must generally be filed within minimum periods set by statute, though specific deadlines are addressed elsewhere.

Governing laws and regulations

Freight claims in the United States are governed by a combination of federal statutes tailored to the , supplemented by carrier-specific tariffs and that outline applicable terms, rates, and liability provisions consistent with law. For domestic interstate transportation of goods by motor carriers and , the primary statute is the Carmack Amendment, codified at 49 U.S.C. § 14706. This provision imposes liability on the receiving carrier, delivering carrier, or any participating carrier for actual loss or injury to property received for interstate transportation under a . Carriers must issue a receipt or , and liability may be limited through written agreements or declared values by the shipper under certain conditions. involving in foreign trade is primarily governed by the Carriage of Goods by Sea Act (COGSA), 46 U.S.C. §§ 30701 et seq., which incorporates international conventions such as the . COGSA applies to contracts for the and defines carrier responsibilities from loading to discharge. The Harter Act, 46 U.S.C. §§ 190–195, applies to certain domestic ocean carriage and situations not covered by COGSA, providing carriers with defenses for loss or damage under specified conditions. For international air carriage of cargo, the () establishes a uniform framework. It applies to international carriage by aircraft for reward (or gratuitously by air transport undertakings) and holds carriers liable for destruction, loss, or damage to cargo occurring during air carriage, subject to limited exceptions such as inherent defects of the cargo, defective packing by others, acts of war, or public authority actions. Liability is capped at 26 per kilogram unless a higher interest is declared in advance. The Montreal Convention modernizes and prevails over the earlier in ratifying states. and further regulate the terms of transportation, including any permitted and claim procedures, provided they align with the governing statutes. For instance, under the Carmack Amendment, may limit liability through or written agreements with shippers.

Time limits for filing

Under the Carmack Amendment (), which governs carrier liability for loss, damage, or delay in interstate transportation of goods by motor carriers, carriers are prohibited from imposing a claim filing period of less than nine months. This minimum period generally begins on the date of delivery or the date delivery should have occurred. Many motor carriers, railroads, and trucking companies adopt this nine-month limit in their tariffs, contracts, or , and missing the deadline typically bars recovery regardless of the claim's merit. Certain carriers, particularly those offering , impose shorter deadlines. UPS requires claims for lost or damaged packages to be initiated within 60 days of the scheduled delivery date. requires claims for damaged or missing contents to be filed no later than 60 calendar days from the shipment date. For concealed damage—where the damage is not apparent upon delivery and is discovered only after unpacking or use— commonly require prompt notification, often within five days of delivery, to permit timely investigation. While the formal claim filing remains subject to the applicable time limit (typically nine months under Carmack-regulated shipments), failure to provide such notice may result in denial of the claim due to prejudice to the carrier's ability to inspect or defend. The Carmack Amendment does not automatically extend the filing period based on the date of discovery of concealed damage; the period generally runs from delivery.

Types of freight claims

Loss claims

Loss claims arise when an entire shipment is not delivered to the or is completely destroyed during transit, resulting in total loss rather than partial loss or shortage. Total loss differs from partial loss in that the goods are wholly absent or rendered valueless, whereas partial loss involves only a portion of the shipment being affected (such as a shortage of some items). Under the Carmack Amendment (49 U.S.C. § 14706), carriers are generally liable for the full actual loss to the property transported. To establish a for a loss claim under the Carmack Amendment, the claimant must prove three elements:
  • Delivery (tender) of the goods to the in good condition,
  • Non-delivery of the goods at destination,
  • The amount of damages (loss).
Once the claimant meets this burden, the carrier is liable unless it proves an , such as an excepted cause (, public enemy, shipper fault, public authority, or inherent vice of the goods). Proof of non-delivery typically includes a written acknowledgment from the confirming the loss, showing no delivery, the evidencing tender, and or other records establishing the shipment's value. The measure of damages for total loss is generally the of the goods at the destination at the time delivery should have occurred, less any salvage value. However, may limit liability through a released value provision in the , contract, or , capping recovery at a specified amount per pound or unit (often much less than actual value) in exchange for lower shipping rates. Shippers may instead opt for declared (or full) value coverage by declaring a higher amount and paying additional fees, enabling recovery up to the declared amount based on actual value.

Visible damage claims

Visible damage claims involve situations where damage to the shipment is readily apparent upon delivery, such as dents, tears, or breakage visible on the exterior packaging or goods without unpacking. These claims are typically easier to substantiate than concealed damage claims because the damage can be documented at the time of delivery, providing strong evidence of carrier liability under the Carmack Amendment and related regulations. Upon receipt, the must immediately inspect the shipment for visible signs of damage before signing the or (). This includes checking all , examining packaging for signs of mishandling, and, if damage is suspected, opening affected packages while the driver is present to assess the contents. Vague notations such as "subject to inspection" or "possible damage" are generally ineffective and should be avoided, as they do not establish specific damage and may lead to claim denial. The should record an exact, detailed description of the damage on the or , specifying the nature and extent of the issues (e.g., "12-inch scratch on framework" or "switch box broken off"). The driver should sign the consignee's copy to acknowledge the notation. This exception notation is critical evidence that the goods were received in a damaged condition, shifting the burden to the carrier to prove otherwise. Failure to note damage on the POD often implies the shipment was received in good condition, weakening or precluding a claim. Photographs of the damaged packaging, goods, and overall shipment should be taken during inspection to further document the condition. The must preserve the damaged freight and original packaging intact, as typically have the right to inspect the shipment before processing the claim. Best practices include requesting a carrier inspection promptly, though the carrier may waive it in some cases. Refusal to allow inspection can result in claim denial. These steps—immediate inspection, detailed notation, photographic evidence, and preservation for carrier inspection—help establish the and support a successful visible damage claim, with filing generally required within nine months of delivery under applicable .

Concealed damage claims

Concealed damage claims arise when loss or damage to goods is not apparent upon delivery and becomes evident only after the opens the packaging, uncrates the shipment, or otherwise unpacks the freight. This type of claim differs from visible damage claims, where apparent defects are noted on the at the time of handover. The primary challenge stems from the absence of any exception noted on the proof of delivery document, which typically creates a that the shipment arrived in good condition. Under this circumstance, the shifts to the claimant to establish that the damage existed at the time of delivery, occurred during transit while in the carrier's possession, and could not have resulted from events after delivery or from pre-existing conditions. This evidentiary threshold is higher than in visible damage cases, as the claimant must overcome the implication of a clean delivery receipt and provide affirmative evidence linking the damage to the carrier's custody. Courts and regulations recognize this as a fact-intensive inquiry, often requiring detailed proof such as chain-of-custody records, packaging condition assessments, or to demonstrate the absence of post-delivery causation. To strengthen a concealed damage claim, claimants should preserve the original packaging and contents in their delivered state as much as possible, photograph the damage, packaging, and any relevant identifiers (such as or labels) immediately upon discovery, and thoroughly document the condition of the goods and the circumstances of unpacking. Prompt reporting upon discovery, along with a request for carrier inspection, is essential to facilitate investigation and preserve evidence. Failure to take these steps can weaken the claimant's position, as may deny liability based on insufficient proof of transit causation. commonly defend against concealed damage claims by asserting pre-existing damage (that the goods were compromised before ) or improper packaging by the shipper (that the packaging was inadequate to withstand normal transit conditions, leading to damage regardless of carrier handling). These defenses are rooted in exceptions to under applicable law, where the carrier may demonstrate freedom from or attribute the loss to the . In practice, the evidentiary ambiguity in concealed cases often leads to negotiated settlements rather than full .

Shortage claims

Shortage claims are filed when a delivers a shipment but with fewer items or a lesser quantity than specified on the or other shipping documents, resulting in a partial loss of the goods. These claims differ from total loss claims by focusing on shortages within an otherwise delivered and accepted shipment. To prove a shortage, the must inspect the shipment upon delivery and immediately note any discrepancies—such as missing pieces, cartons, or quantities—on the proof of delivery (POD) or . This notation creates a contemporaneous record essential for claim validity. Proof often involves comparing the actual received contents against the packing list, , or other documentation listing expected quantities. The original , which declares the shipped quantity, serves as primary evidence of the expected amount. In non-sealed shipments, the can open and count contents at delivery, making visible shortages straightforward to document and support. In , shortages apparent from external indicators (such as mismatched piece counts) can be noted immediately, but internal shortages within are typically harder to prove without additional verification. Carrier count discrepancies arise when the driver's recorded count of pieces on the at pickup or delivery differs from the shipper's declaration or the actual received amount; documenting such variances on the strengthens the claim by highlighting the carrier's role in the shortage. Required documentation for shortage claims generally includes the noted , original , and evidence of value (detailed in the Required documentation section).

Filing a freight claim

Notification and preliminary steps

Upon discovering loss, damage, or shortage in a , the claimant should immediately inspect the goods thoroughly to assess the extent of the issue. For visible damage apparent at delivery, the recipient must note specific details of the damage—such as the number of affected items, their condition, and precise location—directly on the or before signing it, using clear descriptions rather than vague terms like "damaged" or "subject to inspection." Photographs should be taken promptly to document the damaged goods, the original packaging, any visible external signs of mishandling, and the overall condition of the shipment, as these serve as critical evidence. The should be notified as soon as possible, often verbally or in person at the time of delivery if the driver is present, with this initial notice confirmed in writing shortly thereafter to create a formal record. In most cases, the shipment should be accepted with the noted exceptions rather than refused outright, as refusal can lead to additional storage or transportation costs, complicate insurance coverage, or hinder the claim process. The freight and all original packaging materials must be retained in their current condition, stored safely to prevent further damage, and made available for potential carrier inspection; any disposal or alteration without carrier authorization may result in claim denial. Timely notification and are essential, as delays can affect the ability to pursue a claim under applicable time limits (see Time limits for filing).

Required documentation

To support a freight claim effectively, claimants must submit specific documentation that substantiates the occurrence of loss, damage, or shortage, establishes the carrier's liability under applicable regulations such as the Carmack Amendment, and quantifies the claim amount. Federal regulations under 49 CFR Part 370 require a written claim that identifies the shipment sufficiently, asserts liability, and specifies a determinable monetary amount, supported by relevant records. The (or in air shipments) is the foundational document, serving as the and containing essential details such as shipment identification, parties involved, dates, and any exceptions noted at delivery. Legible copies of the original bill of lading are typically required to verify the shipment's terms and condition upon handover. Proof of value, most commonly the or a comparable document, is necessary to demonstrate the actual worth of the lost or damaged goods, including any applicable discounts, allowances, or depreciation. This establishes the maximum recoverable amount and prevents overvaluation of the claim. or proofs of delivery bearing notations of visible damage, shortage, or exceptions at the time of receipt are critical, as they provide contemporaneous evidence of the issue and help document the condition upon arrival. Additional evidentiary materials, such as photographs of the damaged goods and packaging, inspection reports, and repair estimates or cost quotations, substantiate the nature and extent of the loss or damage. Photographs are particularly important for concealed damage claims.

Submission methods and carrier procedures

Freight claims are most commonly submitted through carrier-specific online portals, which allow claimants to initiate the process digitally, upload supporting documentation, track claim status, and often manage multiple claims via dashboards. Major carriers such as UPS and prioritize online submission for efficiency, with UPS offering a claims dashboard accessible via login for full functionality or guest options for individual filings, and no longer accepting claims by or USPS mail as of July 31, 2022. FedEx provides an online portal for single or batch claims (up to 200) that requires login to a FedEx account, while LTL freight claims direct supporting documents to a specific email address. For cargo-specific claims, UPS uses a dedicated online form through its supply chain solutions portal, often requiring details such as numbers and email verification. Although online portals dominate, some still accept paper claim forms or email submissions in certain cases, particularly for specialized freight or . Claimants typically receive a unique claim number or file identifier upon submission, enabling tracking throughout the process. Under applicable to motor carriers (49 CFR Part 370), carriers must acknowledge receipt of a written claim in writing within 30 days, unless the claim is paid or declined within that timeframe; the acknowledgment includes any additional information or documents required for further processing and assigns a successive claim file number, with the receipt date recorded on the claim and related documents. Carriers are required to investigate claims promptly, with disposition—payment, compromise offer, or denial—due within 120 days of receipt; if unresolved by then, carriers must provide written status updates every 60 days thereafter until resolution. Similar acknowledgment and processing principles apply broadly to other , though parcel services like UPS and may follow carrier-specific timelines aligned with their terms and conditions. Claims must adhere to applicable time limits for filing, as detailed in the governing rules section.

Special considerations for concealed damage

Concealed damage claims require heightened diligence because the absence of visible damage at delivery shifts the onto the claimant to demonstrate that the caused the harm during transit. Upon discovering the damage, claimants should immediately stop unpacking, preserve the shipment in its current state, and photograph all layers of packaging, internal protective materials, the damaged goods themselves, and surrounding context from multiple angles to establish a clear chain of evidence. These images help rebut arguments that the damage occurred before or after their possession. Claimants must retain the original packaging and all damaged items intact pending inspection, as disposal, alteration, or failure to preserve salvage can result in automatic denial of the claim. The carrier typically has the right to inspect the shipment, and refusal or premature disposal may weaken the claimant's position. If the carrier waives inspection, the claimant should document the damage thoroughly on their own behalf. Notification of concealed damage must occur promptly, with many requiring written or formal notice within 5 business days of delivery, though some allow up to 15 days; failure to meet these carrier-specific windows often leads to denial or reduced settlement. This short timeframe applies specifically to initial reporting of concealed issues, distinct from the general 9-month claim filing period under the Carmack Amendment. Common denial reasons include , lack of evidence proving (especially with a ), and insufficient documentation of . To , claimants should provide comprehensive photographic records showing intact exterior packaging alongside internal damage, cooperate fully with inspections, and emphasize any pre-transit documentation of the goods' condition. Prompt and thorough evidence collection significantly improves the likelihood of successful recovery.

Dispute resolution

Claim denials and common reasons

Freight claims are frequently denied by following their investigation, often because the claim falls under one of the liability exceptions outlined in the Carmack Amendment or fails to meet procedural and evidentiary requirements. Common denial reasons include situations where the carrier determines it bears no responsibility due to shipper-related issues, insufficient evidence, or external factors beyond its control. One of the most frequent grounds for denial is default of the shipper, where the attributes the loss, damage, or shortage to improper packaging, insufficient packaging, improper loading, or other negligence on the shipper's part, such as inadequate labeling or according to industry standards. In such cases, the asserts that the damage resulted from the shipper's actions rather than during transit under its control. Claims are also commonly denied when the shipment was signed for with a clear proof of delivery, indicating no visible damage or discrepancies at the time of receipt, or when there was no notation of issues on the or . For concealed damage or shortages discovered after delivery, may deny claims if no timely exception was noted or if evidence fails to demonstrate that the issue occurred during transit rather than pre-existing or post-delivery. Other prevalent denial reasons include incomplete or insufficient documentation submitted with the claim, such as missing , , inspection reports, photographs, or other proof of value and condition. may also deny claims if the claimant fails to retain damaged cargo and packaging for inspection, refuses the carrier access to examine the freight, or does not attempt to (such as by repairing or salvaging items). Additionally, outstanding unpaid freight charges or failure to pay the bill for the shipment in question can lead to denial or offset of any potential payout. Carriers typically conduct an before issuing a written denial letter that specifies the reason for rejection, often referencing or procedural deficiencies. If a claim is denied, the claimant may pursue as outlined in the carrier's procedures or .

Appeal processes

If a freight claim is denied, the claimant may request a written explanation of the denial from the to understand the reasons for rejection, such as insufficient evidence, missed deadlines, or . Some carriers offer an optional internal reconsideration or appeal process to challenge the decision, though this is not required by law and varies by carrier. The claimant may submit additional supporting documentation to address the cited deficiencies, such as independent inspection reports, photographs, invoices, repair estimates, proof of proper packaging, or clarification of compliance with requirements. This may take the form of a letter or resubmission. Carriers that provide such reconsideration typically conduct an additional review, which may involve escalated evaluation within their claims department. Industry practices suggest that such reviews often resolve within 30 to 60 days of submission, though this varies by carrier and case complexity. If reconsideration is unsuccessful or unavailable, claimants may pursue other resolution options. may be pursued following the carrier's disallowance of the claim and is not conditioned on exhausting any carrier-level processes.

Arbitration and litigation

If the carrier denies the claim or the parties cannot resolve the dispute through internal processes, the claimant may pursue or as final resolution options. Many transportation contracts include arbitration clauses that require disputes, including those involving freight loss, damage, or delay, to be resolved through binding arbitration rather than court proceedings. These clauses are recommended by organizations such as the American Arbitration Association (AAA), which provides specialized panels experienced in freight and logistics matters and administers arbitration under its Commercial Arbitration Rules. Arbitration offers a private, efficient alternative to litigation, often minimizing costs and disruptions while preserving confidentiality in commercial transportation disputes. Under the Carmack Amendment, the claimant is limited to federal remedies for interstate shipments, as the statute all state law claims related to the loss, damage, or delay of goods during transportation. This ensures uniformity in liability rules but restricts recovery to Carmack-based causes of action, precluding separate state claims for , , or similar theories. Litigation of Carmack claims may be pursued in either state or . While federal courts handle many such cases due to the federal nature of the claim and potential , also have jurisdiction to hear Carmack actions. Small claims courts are rarely used for freight disputes, as the values involved often exceed and the complexity of Carmack issues favors courts of general jurisdiction.

Prevention and risk management

Packaging and handling best practices

Proper are essential for shippers to minimize damage during transit, thereby reducing the risk of freight claims or denials based on inadequate preparation. Adhering to established industry standards and carrier-specific guidelines helps ensure goods withstand shocks, vibrations, compression, and handling typical in . The International Safe Transit Association (ISTA) develops widely adopted and for . These standards simulate real-world —such as , , and —to verify that adequately protects contents and prevent damage. ISTA guidelines emphasize testing for specific shipment types, including parcel and scenarios, to support reliable protection during distribution. Major carriers provide detailed requirements that align with these standards. For FedEx Freight shipments, items over 150 lbs must be palletized on a forklift- and -accessible base with a minimum 3.5-inch clearance for entry on two sides; the recommended pallet size is 40 by 48 inches, and loads should be secured with , banding, or edge protection to prevent shifting. UPS similarly advises using sturdy wood or plastic pallets without overhang, secured with at least (five revolutions recommended) and corner boards for stability, while avoiding pallets with broken boards or protruding nails. Box selection and construction should prioritize new, rigid with sufficient strength for the contents' weight. Double-wall corrugated boxes offer better durability for heavier or fragile items, while may suffice for lighter loads. Reinforce edges and seal all seams with high-quality or nylon filament tape applied in multiple strips to prevent opening during handling. techniques are critical to absorb impacts and immobilize contents. Use materials such as bubble wrap, foam inserts, air pillows, or crumpled kraft paper to fill all empty spaces and provide at least two inches of protection around items, especially corners and edges. For fragile or sharp goods, employ double-boxing: place the item in a cushioned inner box, then position it centrally in a larger outer box with additional void fill and cushioning in between. and unitizing practices include stacking items evenly without overhang, distributing weight uniformly, and using top and bottom load protectors (such as ) to aid compression resistance during stacking. Secure loads with , banding, or on all sides, and incorporate blocking or bracing for irregularly shaped or heavy items to prevent movement. Labeling and handling instructions must be clear, visible, and durable. Place address labels, pro numbers, and on multiple sides of pallets or packages, using forklift-accessible surfaces. Apply handling labels such as "Fragile," "This End Up," or "Heavy" where appropriate, and remove or mark through old labels to avoid misrouting. Attach labels securely, avoiding seams or tape that could obscure them during transit. Inadequate packaging may contribute to carrier liability exceptions, potentially leading to claim denials (detailed in ). Consistent application of these practices supports damage prevention and strengthens the evidentiary basis for any claims that arise.

Insurance options

Shippers and facing potential loss, damage, or delay in transit often rely on insurance options to supplement or exceed the carrier's limited liability under the Carmack Amendment and related regulations. Carrier liability provides baseline protection but is typically limited to amounts such as $0.50 to $5 per pound or fixed per-shipment caps for less-than-truckload shipments (or higher for ), depending on commodity type, freight class, and carrier tariffs. These limits frequently fall short of the actual value of goods, and recovery is subject to the carrier's defenses under the Carmack Amendment (e.g., , shipper fault including improper packaging, or inherent vice). To increase the carrier's liability beyond default limits, shippers may opt for declared value coverage, which establishes a higher maximum liability amount in exchange for an additional fee. Declared value reflects the goods' replacement or repair cost and raises the carrier's financial responsibility accordingly, though it remains subject to Carmack defenses and does not equate to full insurance; the carrier's payout is based on actual loss (often repair cost or at destination). For example, carriers such as allow declared value up to certain maximums, with incremental fees for amounts exceeding a standard base (often $100 included in base rates), but exceeding specified limits renders the declaration invalid. Unlike general freight carriers under the Carmack Amendment, whose liability is typically not capped at a fixed low amount but rather scaled by factors such as weight, freight class, or commodity type, common parcel carriers such as UPS and FedEx provide a standard liability limit of $100 per package, included in the base shipping rate at no extra charge. This base coverage does not automatically insure high-value shipments (such as laptops) beyond this limit. For higher values, shippers must declare the value when shipping and pay additional fees to increase the carrier's liability. Declared value coverage is not equivalent to insurance; it only extends the carrier's liability limit and does not cover all risks. For comprehensive protection, especially with valuable or high-risk goods, shippers should obtain separate third-party insurance. , purchased separately from insurers, offers more comprehensive protection by covering the full declared value of goods against a broader range of risks, often on an all-risk basis. Unlike (which is subject to Carmack defenses), it typically does not require establishing —only evidence of loss or damage—and provides faster claims processing. Policies can be tailored as single-shipment, annual, or contingent coverage, making them especially valuable for high-value, fragile, or high-risk shipments where would result in substantial under-recovery. In practice, shippers generally file claims first with the to pursue recovery under its liability or declared value provisions, as carriers bear primary responsibility for the shipment. If the carrier denies the claim, offers insufficient compensation, or the coverage proves inadequate, the shipper may then file with their third-party cargo insurer for the remaining loss. This sequential approach maximizes recovery while leveraging insurance to bridge gaps in carrier protection.

Shipper and consignee responsibilities

Shippers and play essential roles in supporting freight claims by fulfilling important practical and cooperative responsibilities that help establish carrier liability under regulations such as the Carmack Amendment. These responsibilities primarily involve actions that strengthen the evidentiary basis for claims, though specific procedures may vary by carrier policies, tariffs, or contracts. Shippers are responsible for providing an accurate description and classification of the goods on shipping documents, including the , to ensure compliance with applicable tariffs and standards. They should also ensure proper packaging of the freight to withstand transit conditions and apply appropriate marking, labeling, and tagging to facilitate safe handling. should conduct a timely inspection upon delivery to help document the condition of the shipment. It is recommended that they examine each handling unit for visible loss or damage, open potentially affected shipments while the driver is present when possible, and record specific details of any issues on the or , ideally with the driver’s acknowledgment. Using detailed descriptions rather than general terms strengthens the claim. should also provide prompt notification to the of any discovered loss or damage. For apparent damage, this typically occurs at the time of delivery through notations on . For concealed damage, notification should be made as soon as possible upon discovery, followed by a request for carrier inspection, with the shipment preserved in its original condition until inspected. Timely inspection and notification support the evidentiary requirements for claims and help preserve the right to recovery. (See also Special considerations for concealed damage.)

International and specialized claims

Cross-border freight claims

Cross-border freight claims involve shipments transported across international borders and are governed by rather than solely by such as the Carmack Amendment. These claims address loss, damage, or delay during transit and are subject to that establish distinct , , and . Liability limits vary significantly by transportation mode. For international air shipments, the limits carrier liability for cargo loss, damage, or delay to 26 per kilogram (as revised effective December 28, 2024), with the carrier liable unless it proves the occurrence was not attributable to its fault; the limit may be exceeded in cases of willful or reckless conduct. Parties may agree to higher limits by declaring a higher value on the . For ocean shipments involving U.S. foreign trade, the Carriage of Goods by Sea Act (COGSA) caps liability at $500 per package or customary freight unit, unless the shipper declares a higher value on the ; this applies to the "tackle-to-tackle" period. Road transport across borders often falls under the , limiting liability to 8.33 per kilogram of gross weight. International shipments require specific documentation for customs clearance and to support claims. The is mandatory for all commodity shipments with commercial value, detailing the description, quantity, value, and origin of goods to facilitate , duty assessment, and ownership proof. Other documents may include the (for sea) or (for air), export packing lists, (when required by destination countries), and, in some cases, export licenses for controlled items. Accurate and consistent information across documents is essential to avoid clearance delays and substantiate claims. Jurisdiction and issues add complexity in cross-border claims. The permits actions in multiple forums, including the carrier's principal place of business, the place of departure or destination, or the claimant's residence. For ocean claims under COGSA, jurisdiction often arises in U.S. courts for shipments involving , though may trigger conflicts with other regimes. Contracts frequently include governing law and jurisdiction clauses to specify applicable rules, but these are overridden by mandatory convention provisions where they apply.

Claims involving household goods or perishables

Claims involving are governed by the Federal Motor Carrier Safety Administration (FMCSA) under 49 CFR Part 375, which establishes consumer protection regulations specifically for interstate moves by motor carriers and brokers. These rules require carriers to offer liability options including Full Value Protection, under which the carrier is responsible for repairing, replacing, or compensating at replacement value (with minimums such as $6.00 per pound multiplied by shipment weight), or Released Value, which limits liability to 60 cents per pound per article unless the shipper declares a higher value. Shippers must disclose articles valued over $100 per pound in writing to secure full recovery; failure to do so may limit . must be filed in writing within nine months of delivery (or expected delivery date for total loss), with the obligated to acknowledge receipt within 30 days and provide a disposition within 120 days (extendable by up to two 60-day periods with notification). Claims involving perishables or temperature-controlled shipments face unique evidentiary challenges due to the rapid deterioration of goods and the need to prove in temperature deviations. Essential documentation includes instructions (often in a reefer letter specifying target temperatures and settings), readings or , notations for temperature requirements, and prompt inspection reports at delivery. Prompt notification to the carrier and thorough record-keeping are critical, as spoilage can quickly destroy evidence of damage, complicating proof of causation under the Carmack Amendment. Carriers may process such claims expeditiously in practice to mitigate further loss, though standard filing deadlines apply.

References

  1. https://www.gsa.gov/policy-regulations/policy/transportation-management-policy/freight-damage-claims-faqs
  2. https://www.govinfo.gov/content/pkg/USCODE-2018-title49/html/USCODE-2018-title49-subtitleIV-partB-chap147-sec14706.htm
  3. https://www.beneschlaw.com/resources/carmack-amendment-liability-reminder-of-the-basic-legal-principles.html
  4. https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-370/section-370.3
  5. https://www.redwoodlogistics.com/insights/basics-carriers-freight-claims
  6. https://www.irmi.com/term/insurance-definitions/carmack-amendment
  7. https://www.globaltranz.com/resource-hub/freight-insurance-vs-freight-liability/
  8. https://www.investopedia.com/terms/c/carmack-amendment.asp
  9. https://shiptli.com/resources/who-is-the-shipper-consignee-and-carrier-in-a-shipment/
  10. https://www.empwrtrucking.com/insurance-home/who-is-responsible-for-filing-a-freight-claim/
  11. https://my.yrc.com/national/help/tools_claims3.html
  12. https://www.atsinc.com/blog/a-freight-brokers-role-in-cargo-claims
  13. https://www.law.cornell.edu/uscode/text/49/14706
  14. https://www.hni.com/blog/bid/84490/freight-claims-5-liability-exceptions-under-the-carmack-amendment
  15. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title49-section14706&num=0&edition=prelim
  16. https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section30701&num=0&edition=prelim
  17. https://www.icao.int/news/international-air-travel-liability-limits-set-increase-enhancing-customer-compensation-0
  18. https://www.gertsburglicata.com/blog/navigating-the-carmack-amendment-a-guide-for-shippers-and-carriers/
  19. https://www.m-hlawgroup.com/carmack-amendment-time-limits-on-cargo-claims-explained/
  20. https://www.translogisticsinc.com/blog/cargo-claim-deadlines-of-120-days-under-the-carmack-amendment
  21. https://www.hni.com/blog/bid/84213/faqs-about-the-carmack-amendment
  22. https://www.ups.com/us/en/support/file-a-claim
  23. https://www.fedex.com/en-us/customer-support/claims.html
  24. https://parcelindustry.com/print-article-2906-permanent.html
  25. https://freightclaims.com/the-top-types-of-freight-claims-every-shipper-should-know/
  26. https://www.cozen.com/admin/files/publications/cargo_claims_whitepaper.pdf
  27. https://www.revconlogistics.com/post/how-to-protect-your-shipments-and-maximize-recovery
  28. https://freightclaims.com/knowing-your-worth-declared-value-and-released-value-in-freight-claims-management/
  29. https://www.echo.com/resources/blog/how-notate-damages-and-shortages-bill-lading-and-proof-delivery/
  30. https://my.reddawayregional.com/national/help/tools_claims3.html
  31. https://marlinblue.com/freight-damage-claims-best-practices-to-improve-your-claims-process/
  32. https://tlcouncil.org/wp-content/uploads/2022/10/concealed_damage_and_shortage_claims.pdf
  33. http://www.transportationlaw.net/articles/may02article.htm
  34. https://www.armstrongtransport.com/blog/what-is-a-concealed-damage-claim-and-how-can-it-be-resolved
  35. https://www.zdscs.com/blog/types-of-freight-claims-a-complete-guide/
  36. https://supplierwiki.supplypike.com/articles/shortages-damages-and-claims-for-freight-shipments
  37. https://www.fedexfreight.fedex.com/lossdamage_guide.pdf
  38. https://assets.ups.com/adobe/assets/urn:aaid:aem:390e57eb-9731-4599-a959-c408e5d8c2a3/original/as/how-to-submit-a-claim-en.pdf
  39. https://www.thebrimichgroup.com/receiving-damaged-freight-9-critical-steps-to-filing-a-freight-claim/
  40. https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-370
  41. https://tlcouncil.org/wp-content/uploads/2024/05/how_to_file_a_claim.pdf
  42. https://www.ups.com/us/en/support/file-a-claim/supporting-documents
  43. https://www.ups.com/us/en/supplychain/tools/cargo-claims
  44. https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-370/section-370.5
  45. https://modaltrans.com/blog/navigating-concealed-damage-claims-in-freight-shipping
  46. https://www.redwoodlogistics.com/insights/concealed-damage-in-freight-what-you-need-to-know
  47. https://www.dtsone.com/concealed-damage/
  48. https://www.partnership.com/blog/post/5-frustrating-reasons-your-freight-claim-was-denied
  49. https://shippei.com/was-your-freight-claim-denied-how-to-fight-it/
  50. https://mi-logistics.com/claims-management
  51. https://blog.inymbus.com/freight-claims-management-the-definitive-guide
  52. https://freightclaims.com/what-is-the-timeline-for-processing-a-freight-claim/
  53. https://www.adr.org/industries/commercial-industries/transportation/
  54. https://www.mehaffyweber.com/news/breaking-down-the-carmack-amendment-for-transportation-carriers/
  55. https://www.fedex.com/en-us/shipping/freight/resources/packing-guide.html
  56. https://www.ups.com/assets/resources/webcontent/en_US/Packaging_Guidelines.pdf
  57. https://ista.org/process_standards.php
  58. https://www.freightamigo.com/en/blog/logistics/best-practices-for-packaging-to-prevent-shipping-damage/
  59. https://www.redwoodlogistics.com/insights/top-5-packaging-tips-avoid-damaged-freight
  60. https://redstagfulfillment.com/ltl-freight-insurance/
  61. https://falveyinsurancegroup.com/blog/shipping-insurance/breakdown-of-carriers-liability-on-ltl-shipments/
  62. https://www.fedex.com/en-us/shipping/declared-value.html
  63. https://www.partnership.com/blog/post/carrier-liability-vs-freight-insurance-what-s-the-difference
  64. https://www.ups.com/media/en/terms_service_amr.pdf
  65. https://efwnow.com/resource/carrier-liability-vs-cargo-insurance/
  66. https://www.roanokegroup.com/faqs/cargo-insurance-vs-carriers-legal-liability-whats-the-difference/
  67. https://www.fedex.com/content/dam/fedex/us-united-states/services/FreightPackagingGuidelines.pdf
  68. https://www.hubinternational.com/blog/2016/10/cargo-claims-handling-for-consignees/
  69. https://www.beneschlaw.com/resources/cargo-liability-global-comparative-analysis-of-legal-regimes.html
  70. https://bifa.org/2024/11/13/changes-to-liability-limits-under-montreal-convention/
  71. https://www.avalonrisk.com/quest-news/increases-for-international-air-freight-limitation-of-liability
  72. https://www.fedex.com/en-us/shipping/international/create-documents.html
  73. https://www.ecfr.gov/current/title-49/subtitle-B/chapter-III/subchapter-B/part-375
  74. https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-10/FMCSA_R%26R_Handbook_Web_v1.pdf
  75. https://www.fmcsa.dot.gov/protect-your-move/what-if-problems
  76. https://www.xcover.com/en-us/help/documents-reefer-letter
  77. https://www.bluebookservices.com/blueprints/cargo-claim-checklist-getting-your-documentation-in-order/
  78. https://marlinblue.com/reefer-cargo-claims/
Add your contribution
Related Hubs
User Avatar
No comments yet.