4 Common Reasons Cargo Claims Are Rejected
You have a plan for processing cargo claims before they happen. Here’s what you should and shouldn’t do when it’s time to file a claim.
In my previous article, I explained what is generally expected when filing a cargo claim, and what kind of documentation you may need in support. While federal regulation provides a guideline, the shipper, their customers, and their vendors should agree on how to handle claims when damage occurs. Without that kind of consistency, things can easily go wrong.
Here are some of the most common issues that can arise during the claim process:
- Proof of damage. It is the obligation of the claimant to establish a prima facie case for carrier liability. As part of this case, the claimant must prove the cargo shipped in good condition and arrived in a damaged condition. Suspicion of damage does not meet the common law standard of proof of damage.
- Insufficient evidence. Also part of the prima facie case against a motor carrier, the claimant must establish a definable financial harm. Estimated, undocumented, and/or speculative pricing do not meet the legal threshold. The amount must be specific, and documentation must be provided to prove it.
- Time limits. Claimants have 9 months from the expected date of delivery to submit a claim to a motor carrier. An excessive amount of time between delivery and claim filing can create considerable complications in establishing a prima facie claim against the carrier. Substantial delay also will impair the motor carrier’s legal right to properly investigate the claim.
- Mitigation. Common law establishes the responsibility of proving details of the full extent of the damages, as well as lessening the financial impact on the responsible party as much as economically possible.
It’s impossible to cover every eventuality that will cover every claims case. Each cargo claim has nuances that render it unique, and no process can cover everything. That doesn’t mean you should sit back and let nature take its course. You can add discipline to your claims administration—and make sure customer facilities, carriers, brokers, and third parties understand what they should do when freight is damaged or lost. Doing so increases the chances of seeing more effective claims resolution.
For more information on this topic, download our Cargo Claims: Basic Steps to File a Cargo Claim white paper.