Imagine this: You’ve just shipped a crucial order to a key customer. The timeline is tight, the product is top-tier, and expectations are high. Then, the phone rings. The truck arrived, but the pallets are tipped, the shrink wrap is torn, and product is spilling onto the dock floor.
It’s a logistics manager's worst nightmare.
Cargo claims are an unfortunate reality of the transportation industry. Whether it's damage, shortage, delay, spoilage, or contamination, these incidents disrupt supply chains and strain relationships. However, while accidents are sometimes unavoidable, the headache of the claims process doesn't have to be.
If not handled correctly, claims can become costly, time-consuming battles. For shippers and receivers, establishing strong best practices is essential to preserving recovery rights and reducing disputes.
Here is your practical guide to minimizing risk and managing cargo claims effectively.
Before you can effectively fight a claim, you need to understand the rules of the game. Most domestic full truckload shipments in the United States are governed by the Carmack Amendment. This federal law establishes carrier liability for loss or damage to cargo during interstate transportation.
Under the Carmack Amendment, the burden of proof initially rests on the shipper. To establish a prima facie case, you must generally prove three things:
If you can prove these three elements, the burden shifts to the carrier to prove they aren't liable due to specific exceptions (like an Act of God or a public enemy).
Key Takeaway: Different rules apply to international, intermodal, and LTL shipments. Knowing which framework applies to your specific lane is critical before a claim ever arises.
Shippers should ensure that:
Additionally, verify that the load is blocked and braced correctly inside the trailer. If the freight can move, it likely will.
In the world of claims, if it isn't documented, it didn't happen. Clear documentation at the point of origin is your strongest weapon in proving the first element of the Carmack Amendment: that the freight was in good condition when it left your facility.
Adhere to these documentation best practices:
The receiver is the gatekeeper of the claims process. Their actions at the moment of delivery can make or break a claim. A rushed receiving team that signs a delivery receipt without inspecting the cargo is effectively signing away your right to recovery.
Upon delivery, receivers must:
There is a common misconception that once freight is damaged, it is total trash. However, all parties in a cargo claim have a legal duty to mitigate loss. This means you must take reasonable steps to reduce the financial impact of the damage.
Mitigation strategies include:
If you unnecessarily destroy freight or refuse to mitigate, a carrier may successfully argue that they don't owe you the full value of the claim.
Time is not on your side. Under the Carmack Amendment, cargo claims generally must be filed within nine months of delivery. However, waiting that long is rarely a good idea. Evidence gets lost, memories fade, and personnel change.
Best practices for filing include:
Incomplete or late claims are the easiest ones for carriers to deny. Don't let a paperwork error cost you thousands of dollars.
Silence breeds disputes. Effective communication between shippers, receivers, brokers, and carriers reduces delays and keeps emotions in check.
The earlier you communicate, the faster the resolution usually is.
Not all liability is created equal. It is vital to regularly review your transportation contracts and broker-carrier agreements.
Understanding how risk is allocated in your contracts helps avoid nasty surprises when a claim occurs.
Finally, don't just process claims—learn from them. Cargo claims often reveal operational weaknesses in your supply chain. By analyzing your claims data, you can identify trends that might otherwise go unnoticed.
Look for patterns such as:
Using this data proactively allows you to fix the root cause, reducing future losses and building a more resilient supply chain.
At SimPL Freight Solutions, we understand that even with the best preparation, things can go wrong. That is why we have an experienced and dedicated claims team with extensive experience managing the complexities of cargo claims.
We don't just handle claims when they arise; we actively track and analyze claim data to identify recurring issues across lanes, facilities, commodities, or carriers. We work with our customers to implement practical solutions to prevent future losses and establish best practices that place them in the strongest possible legal position should a claim occur.
If something does go wrong, we are with you every step of the way—saving you the time, expense, and aggravation of handling a cargo claim yourself.
Ready to strengthen your logistics operations? Contact SimPL Freight Solutions today to learn how we can help you mitigate risk and manage your transportation more effectively.