From Damage to Resolution: Simplifying the Freight Claims Process

When dealing with freight shipping, understanding the ins and outs of freight claims is crucial. Damage can happen at any stage of transit, and how you handle these claims can significantly impact your bottom line. In today’s competitive market, customers are scrutinizing claims more than ever, determined to recover every dollar lost due to damages.

In this article, we’ll break down the basics of freight claims, discuss steps to increase your chances of maximum payout, and highlight the importance of cargo insurance, especially the cargo insurance offered by Global Logistics, Inc.

Freight Claims Basics

Freight claims arise when goods are damaged or lost during transit. The shipping landscape presents unique challenges, especially when distinguishing between Less-Than-Truckload (LTL) and Truckload (TL) shipping. LTL shipments are often handled by specialized claims teams who understand the claims process well. Conversely, TL shipments, often managed by independent truck owners and brokers, may require additional guidance to ensure proper claim handling.

Shippers typically aim to keep damage rates below 1%. To achieve this, it’s essential to have a dedicated team focused on mitigating claims through effective packaging and staying updated on laws and regulations. Carriers generally have up to 120 days to resolve a claim, but aiming for a resolution in 30 to 80 days is ideal.

Steps to Increase Your Chances of Maximum Payout

Start with the Shipper: Prepare for a Successful Delivery

A successful claims process begins well before the shipment leaves your hands. Proper preparation by the shipper can make a substantial difference in the likelihood of a claim being paid out. Here are key steps to take prior to and on the ship date:

Educate the Consignee on Proper Freight Receiving Procedures
Ensure the receiver (consignee) knows how to accurately accept your freight. If a piece count is necessary, communicate this requirement to the consignee, so they’re ready to confirm it upon delivery.

For shipments with multiple pallets, instruct the consignee to verify the pallet count and, if there have been past issues with specific types of damage or loss, to be vigilant and confirm those items at the time of delivery. Clear instructions can be particularly helpful for non-professional recipients, who may not be as familiar with freight handling.
Use Distinct Labeling and Wrapping for Your Freight
Common labels like “Do Not Double Stack” are often ignored by dock workers due to their ubiquity, so consider alternative labeling strategies to catch attention. Labels such as “Top Load Only” or “High Claim Potential Freight” may prompt handlers to exercise more caution, encouraging them to treat your freight with added care.

Additionally, using colored shrink wrap to separate shipments by destination (e.g., green for Chicago, red for Denver) can help your freight stand out on the dock and reduce confusion with other shipments.
Take Before Photos of Freight and Packaging
Documenting the condition of your freight before shipment can be invaluable if the carrier causes damage and attempts to re-wrap the pallets. High-quality, timestamped photos of your freight and its packaging allow you to provide concrete evidence if a claim is disputed.

Accept the Freight, Damages, and All

Even if a shipment arrives damaged, accepting it can save you from additional costs later. Upon accepting, be meticulous in documenting the carton count on the Delivery Receipt. Clear, specific damage descriptions are vital, as vague notes can complicate the claims process.

Document Thoroughly

Upon delivery, photograph the freight and any visible damage immediately. Keep both the freight and its packaging intact for potential carrier inspection and salvage, as storing these safely helps secure your claim.

File Claims Promptly

Time is of the essence with freight claims. Filing promptly maximizes your chances of recovering a full payout. Maintain thorough records of all claim-related documentation—more evidence is always better.

Accurate documentation is key to ensuring freight claims are processed quickly and successfully. Focus your records on the replacement wholesale cost and packaging expenses, as claims for lost business or profits are not covered and may delay the payout process. Clear, detailed, and correct documentation helps streamline the claims process and avoid unnecessary setbacks.

By following these proactive steps, shippers can significantly improve their chances of a smooth and successful claims process when damages occur.

The Importance of Cargo Insurance

Despite taking all the necessary precautions, damages can still occur, especially in the unpredictable world of freight shipping. This is where cargo insurance becomes invaluable. Carriers are typically required to investigate concealed damage claims only if reported within five days of delivery. However, GLI Cargo Insurance provides an extended 15-day reporting window, giving you more time to identify and document any hidden damage.

Additionally, while carriers may not guarantee a full payout even when reported within the five-day window, insured shipments through GLI can still receive a full payout as long as claims are submitted by day 15 with the necessary documentation and photos.

The average limited liability of carriers is $5 per pound, though liability can extend up to $20-25 per pound depending on the carrier, tariffs, or even freight class. Recently, more carriers have adopted "dynamic" pricing discounts, which can lead to lower freight rates. Shippers need to read the fine print—though it’s often hidden within the carrier's Rules Tariff, which isn’t readily accessible when receiving a quote. Without adequate visibility into these terms, shippers may overlook critical limitations on carrier liability. For shipments valued over $3,000, investing in additional cargo insurance is almost always recommended to avoid unexpected financial exposure.

GLI offers exceptional cargo insurance options that provide an extra layer of protection for your shipments. With their coverage, shippers can gain access to full value compensation for lost or damaged goods, surpassing the limited liability offered by standard carriers.

Why Choose GLI Cargo Insurance?

Comprehensive Coverage: GLI Cargo Insurance offers policies that ensure you’re covered for the full value of your shipment, not just the limited amounts set by carriers.
Quick Claims Process: With streamlined procedures, many claims are paid out within days, reducing the financial impact on your business.
Peace of Mind: Having robust cargo insurance allows shippers to operate with confidence, knowing that their investment is protected.

In today’s complex shipping environment, having additional cargo insurance is one of the best ways to safeguard your business. By investing in comprehensive coverage, you can protect your revenue and minimize losses, ultimately ensuring your company remains resilient amidst challenges.

While damage claims are a common source of frustration in the freight industry, being proactive and informed can make all the difference. Partnering with a trusted provider like GLI can streamline this process by ensuring that you have the necessary cargo insurance coverage in place right where you need it. GLI’s team also takes on the responsibility of filing and managing freight claims on your behalf, allowing you to focus on running your business while we handle the complexities of the claims process.