The first thing to do if you realize your freight has been damaged during transit is also the most important; you MUST sign the POD for damage. The POD is the “Proof of Delivery” and acts as a delivery receipt for the goods being shipped. To “sign for damage” is to notate clearly on the POD that the freight was damaged when it was delivered, and to mark exactly what was damaged. Be as specific as possible when noting the damage. If damage is not noted on the POD, the carrier will most likely deny your claim, so this step is VERY important . It’s also important to take pictures of any damage, as these pictures will be used later in the claims process as proof of carrier fault. You could also choose to refuse the freight, in which case most carriers will send the damaged product back to the shipper for inspection. The next step is to determine whether the damaged freight is repairable. If the goods are damaged beyond repair and must be disposed of, you will file a claim for the full price of the item. In this case, you will need to include a written explanation of why the item was not repairable. On the other hand, if the damage is repairable you should file a claim for the cost of the repair, so make sure to keep your invoices and receipts. Note that recent changes to the National Motor Freight Class guidelines indicate that concealed damages must be reported to carriers within five days of delivery. This means that if damage is not noted on the POD, you must act fast in letting the carrier know about the damage in order to have a chance at getting a payout.
If your freight is missing, the carrier will spend about a week doing a dock check. A “dock check” is the process in which the carrier traces the last known path of the freight in an attempt to find the missing shipment. If the freight is not found, the carrier will eventually declare the freight officially “lost,” which gives you the opportunity to begin the claim process. You will submit the claim for the cost of the entire product.
Filing a damage or loss claim with a carrier is a lengthy process, and patience is necessary. To submit the claim, you will follow the instructions in the carrier claim document. Some carriers allow claims to be filed through their website, while others require you to email, fax or mail the documentation to the carrier claim department. Once you’ve submitted the claim, the waiting game begins. Two to three weeks after filing the claim, we recommend contacting the carrier’s claim department to confirm that the claim has officially been submitted and is under review. Freight carriers receive a large number of claims each day, so it’s important to confirm that the claim is underway and did not slip through the cracks. Sometimes the carrier will assign the claim its own claim number, and other times the claim will be identified by the shipment’s PRO number. You can always check the progress of the claim by contacting the carrier claim department and referencing the PRO number or the claim identification number. Claims can take several months to be processed, and each carrier has different average waiting times. Unfortunately, once the claim is submitted and you have confirmed it is under review, nothing can be done to speed up the process. This is why it is so important to make sure your claim is filed correctly to avoid any hold-ups in the process.
You can read our insurance blog for a more in-depth description of third party insurance, but in simple terms, third party insurance is an insurance provider that your broker can employ for more protection of your freight. While all carriers have some basic protection for the freight they transport, this coverage is limited. Third party insurance, on the other hand, often has much better coverage of your shipping items, as well as faster payout times. Instead of adhering to limited liability coverage through the carrier, third party insurance often has full coverage for most items and only a $500 deductible. If you are shipping expensive or breakable items LTL, we highly suggest acquiring third party insurance.
There are several reasons that a carrier might deny a claim, but we see two reasons for claim denial more often than others. First, the POD was not signed at the time of delivery notating damage. If the POD is signed “clean,” – not stating damage – then there is no proof that the item was damaged in transit, thereby releasing the carrier of any responsibility per their terms of use. Signing the POD for damage is crucial in getting your damaged freight claims paid. The second most common reason that claims get denied or only partially paid is due to the carrier’s limited liability coverage. Each carrier will have different limited liability coverage, depending on weight, commodity or freight class. Many carriers use a per-pound coverage system, which means that a damaged or lost shipment weighing 500 pounds would have a maximum payout of $500, regardless of value. This is why getting 3rd party insurance on highvalue items is so important!