How to File a Freight Claim on a Brokered Load

If your freight is damaged, lost, or delayed on a brokered load, you may need to file a freight claim, which is basically a lawsuit against the carrier. Since brokered loads have a third-party intermediary (called freight brokers), the freight claim process can sometimes get confusing. However, if you learn how to navigate the process it will make a big difference.

Filing a claim makes sure that shippers aren't on the receiving end of the damage. In this guide, we will explain what is a freight claim and also cover how to file a freight claim for a brokered load.

What is a Freight Claim?

A freight claim is an official legal request made by a shipper or consignee to the carrier for the compensation of any loss, damage, or delays that occurred to the goods shipped. A freight claim will recover all the costs of any goods that got damaged or lost during the transportation. This process places the cost of the loss upon the party responsible rather than the shipper of the goods.

Common Reasons for Filing a Freight Claim

Some of the common scenarios that can trigger a freight claim include:

1. Damage to Cargo

Cargo might get damaged during loading, unloading, or transit. This could happen either by mishandling, accident, weather, or poor packing. Hence, it's important to conduct an inspection of such cargo upon delivery, and then mention the damages on the freight claim form.

2. Shortages (Missing Goods)

Shortages occur when the delivered items do not correspond to the quantities listed on the Bill of Lading (BOL). Theft, loss, or incorrect inventory counts can all result in shortage claims. Such claims should be filed with the carrier (through the broker) as quickly as possible.

3. Late Delivery Impacting Cargo

Delivery must take place at a reasonable time, especially when dealing with time-sensitive goods. However, if the damaged cargo still retains part of its value, the carrier would have to pay the difference between the undamaged value and the damaged value only.

Who Is Responsible for Filing a Freight Claim?

If you're wondering “who files freight claim shipper or receiver?” Here's the simple answer: the responsibility for filing a freight claim generally falls on the receiver (consignee). But the shipper may sometimes be responsible. Below is a detailed breakdown of who is responsible in various situations:

1. Shipper's Responsibility

The shipper usually files a freight claim with the transport document if the damage, loss, or problem is first discovered after the shipment has departed from the seller's warehouse, but before it arrives at the buyer's warehouse. For example:

• Visible damage at pickup: The cargo is determined to be damaged at the time of packing. This is evident in the pickup condition. For such claims, the inspection report indicates, notifies, and documents the condition.

• Packaging-related claims: If you can show packaging is inadequate or faulty, and that’s what caused the loss, the shipper is responsible because they normally package the goods when they first take possession.

2. Consignee's Responsibility

Under most terms of sale, damages or short deliveries are the responsibility of the consignee (the customer receiving the cargo) to report via freight claim. These include:

• Damage or Loss Upon Delivery: If the cargo arrives seriously damaged, or if part of the cargo is missing, the receiver should note that on the POD and make a claim.

• Concealed Damage: If the damage cannot be determined at the time of shipping but only discovered at the time of unpacking, the consignee has a limited timeframe to report the damage and make a claim.

3. Broker's Role in the Claims Process

Many brokered shipments submit the freight claim to the broker, who acts on behalf of and forwards to the carrier the documents necessary to file the claim.

The broker can explain the process, help with the paperwork, and generally act as an intermediary between the various parties, but he is not directly liable for any damage, loss, or delay during transit.

Freight Claim Exceptions

If you make a freight claim, there are exceptions where you will not be able to recover for these circumstances. These are exceptions where the carrier was not in control of the loss or was not at fault:

1. Acts of Public Authority

If a government authority passes laws or policies relating to vessel shipments, such as an embargo, quarantine, or recall, ship carriers aren't liable for any damage or loss caused by the freight claim laws.

2. Acts of Default by the Shipper

Carriers do not bear responsibility for damage that arises from the shipper’s own negligence, which includes inadequate packing or securing the cargo, or errors in the documentation provided.

3. Acts of War

A loss or damage arising from war, invasion, civil commotion, or epidemics is usually excluded, as those perils are generally beyond the carrier's control. But criminal acts (such as breaking and entering and theft by gangs) are often an exception.

4. Acts of God

A carrier is not liable for loss caused by natural events such as hurricanes or floods, which are 'Acts of God' – ie, events neither foreseen nor under human control nor caused by human intervention.

5. Inherent Vice

This exclusion covers damage that stems from intrinsic characteristics of the goods being carried, such as the perishability of food. If the goods spoiled in transit because it was inherent in the products that they would spoil within the length of time they were in the possession of the carrier, this exclusion may apply.

Key Documents Needed for Filing a Freight Claim

To ensure a successful freight claim, gather the following essential documents:

1. Bill of Lading (BOL): Proof of shipment and contract between shipper and carrier, detailing goods and condition at pickup.

2. Proof of Delivery (POD): Confirms delivery status, noting any visible damage upon receipt.

3. Freight Invoice: Itemizes shipping costs to compare against claimed losses.

4. Photos of Damage or Loss: Visual evidence of damage to strengthen your claim.

5. Inspection Reports (if applicable): Third-party assessments of damage to support the claim’s validity.

The Freight Claim Process: Steps to File a Freight Claim on a Brokered Load

Filing a freight claim for a shipment on a brokered load can only be successful through a carefully documented, step-by-step process. Here’s the detail as it should be done:

Step 1: Inspect the Cargo Upon Delivery

Ensure that everything is in order: examine the cargo for any damage or shortages before you start unloading. Pay attention to crushed boxes, ripped packaging, or missing items. Any problems identified should be entered into the POD while the driver is still with you so that it's a joint document that you both sign. Be as precise as possible about the type and extent of damage.

Step 2: Document the Damage or Loss

Get good photographs of everything. Take some wide shots to demonstrate the overall condition and some close-up shots detailing the damage. Count the damaged pieces. Note the kind of damage, and any related facts, such as weather during delivery or handling problems.

Step 3: Notify the Broker and Carrier

Contact both the broker and the carrier (preferably within 24-48 hours) with a thorough description of damage or loss, and photos. Deliver a formal, written notice of claim by email or certified mail to both of the parties to create an official record of your claim. Include shipment dates and info and your intent to file a claim.

Step 4: Gather and Submit Supporting Documents

You'll need to collect the Bill of Lading (BOL), Proof of Delivery (POD), invoice covering the freight charge, and any report from a third-party inspection. The details of the item shipped, its current condition, and any markings or damages should all be clearly described. Group the photos and the description of the damage together in a file. To prepare the document more quickly, use a freight claim form template to ensure all required details are covered. Don't forget to craft a packet. Reviewers can work quickly if they simply follow a carefully prepared packet.

Step 5: File the Claim

File the claim with the carrier through their preferred method of communication, which can be via email, through an online portal, or by mail. Be sure to follow their claim submission protocol so as not to delay the process. State the amount being claimed, the grounds for the claim, and any evidence that supports it. Also, you must submit the claim before the deadline, which is usually nine months after the product is delivered.

Step 6: Follow Up on the Claim

Stay in contact with the broker and carrier regarding the status of the claim. Keep track of all communications, both electronic and in print, via email and telephone. Carriers must respond to the claim within 30 days, and resolve it within 120 days. If it gets extended, push for further written updates or steps to keep the process moving.

Key Takeaways for Filing a Successful Freight Claim

Knowing how to file a claim against a freight broker is important for businesses that do a lot of shipping. The process gets even more effective once you have a firm hold on the process and what documents you are required to submit. Inspect the load immediately upon arrival, document the condition of the cargo, and communicate promptly and clearly with the broker and carrier. Consider using freight claim management software or freight claim software to streamline the process.

Be aware of the exceptions to liability rules, and make sure any paperwork is promptly posted in a safe place and within the time limits specified. You will likely never lose a claim if you take a proactive approach to freight claim management.