r a n s p o r t a t i o n
Protection Council, Inc.
Main Street, Huntington, New York 11743 (631)
TO FILE A FREIGHT CLAIM FOR
DAMAGE OR DELAY
The first point to know is that a
claim against a carrier is a legal demand for the payment
of money arising from the breach of the contract of carriage
(usually the bill of lading).
Therefore, the rules governing the
filing of claims are founded in law and must be followed
strictly. Claims are also governed by government regulations,
whether intrastate or interstate commerce is involved. If an
international movement is involved, the claim may also be
governed by international treaties.
Claims rules will be found either in carriers
tariffs or in their bills of lading, or both. Court
decisions interpret these regulations, laws and tariffs, and
determine the rights and obligations of the parties.
If a claim shipment was governed by a contract,
the terms of that agreement will govern the carriers
liability. Often contracts will adopt common carrier tariff
rules, as described herein.
Constitutes a Claim?
No specific claim form is prescribed
by law, but four elements are essential: 1) the shipment must be
identified to enable the carrier to conduct an investigation; 2)
the type of loss or damage must be stated; 3) the amount of the
claim must be stated or estimated and 4) a demand for payment by
the carrier must be made.
The shipment identification
information must include the carriers Pro
number, shippers number, vehicle number, origin date,
delivery date, and commodity description.
The claimants name must
be either 1) the entity having title to the goods in transit; 2)
the entity assuming the risk of loss in transit; or 3) an
assignee of either 1) or 2).
The carrier against whom the claim may
be filed is either the originating carrier or the delivering
It is not recommended that claims be
filed against intermediate connecting carriers, although it is
permissible to do so if it is definitely known which carrier
caused the loss or damage.
The claim must be delivered to
the carrier within the time period specified in the
carriers contract and/or tariff, or that time prescribed by
law, (usually 9 months from delivery). Since the date of receipt
by the carrier determines whether or not the claim is timely
filed, claims should be filed via delivery methods which give
some type of confirmation of receipt and guarantee as to length
of time for delivery, such as; Facsimile transmission (FAX);
Registered or Certified mail, Return Receipt Requested (RRR);
Express Mail; Express Courier Services; Electronic Data
Claims should be addressed to the
carriers claims manager at the carriers home office.
Personal delivery to a carriers
representative may be effective if the claim is actually
delivered in time, but an acknowledgment should be obtained in
writing, and a copy sent to the carriers claims manager.
Receipt by the carrier is deemed to be
notice to all connecting carriers as well.
The names and addresses of the
consignor (shipper) and consignee(receiver) must be stated,
including all stop-off locations for completion of loading and/or
Information on who is liable for the
freight charges should be included in the claim. (Collect,
Prepaid, C.O.D., etc.) Information on any liability limitations
must be noted on the bill of lading.
A detailed description of the loss,
damage or delay must be stated, setting forth the specific
commodities, number of units of each type, extent of loss
suffered, the value of each unit, the amount of salvage realized,
the net loss, and a description of the events which caused the
10 cartons clothing water damaged
@ $100 ea. = $1,000
2 cartons shoes short
@ $500 ea. = $1,000
3 cartons china crushed
@ $100 ea. - $ 300
Less Salvage - 150
Note: See exception notation on
delivery receipt dated _______. Confirmed by inspection report
enclosed, dated __________.
The amount of the claimants
loss should always be stated in the claim. When the extent of
a loss is not known at the time of filing, it is not good
practice to state that this is a claim for $100 more or
less. When this is done, some carriers have been known to
mail a check in the amount of $100 in expectation that the check
will be deposited, thus relieving the carrier of further
liability. The better practice is to place the carrier on notice
as to its maximum exposure to liability by stating the
full potential loss. If a lesser amount is finally determined to
be owed by the carrier, the claim must be amended to that
Claims must usually be supported by
The original bill of lading
The paid freight bill
Proof of the value of the
commodities lost or
Inspection reports, if made
Copies of request for
Notification of loss
Waiver of inspection by
Special documents when
appropriate, such as
Quality control reports
Carriers passing reports
Loading and unloading tallies
(Facsimile copies are generally
A Bond of Indemnity
may be filed with the claim indemnifying the carrier for any loss
it may suffer as a result of improperly paying the claim on the
basis of the claimants furnishing a copy of the
Every claim should be numbered
by the claimant and recorded in a claim log or computer system.
The carrier should also assign its claim number and acknowledge
receipt of the claim within 30 days of receipt, pursuant to
D.O.T. regulations. Both claim numbers should be
shown on all correspondence and checks.
A separate file should be kept on each
claim. Important deadlines and dates should be recorded in the
claim log and systematically reviewed. For instance;
If a claim is not acknowledged
within 30 days, or
If a claim is not paid,
compromised or disallowed within 120 days, or
If the carrier does not
provide status reports every 60 days thereafter, it should be
notified of its violations of the governments regulations.
Repeated violations of D.O.T claim
regulations should be reported to the Surface Transportation
Board, 1201 Constitution Ave. NW, Washington, DC, 20423-0001 or
to the D.O.T. Regional Director in the Region in which the
carriers headquarters is located.
If a carrier denies liability for a
loss for which the claimant has reason to believe the carrier is
lawfully liable, the claimant has the right to institute a
lawsuit. However, such suits must be instituted within strict
The most commonly applicable suit time
limit is two years and one day from the date the carrier
disallowed the claim. See the Carmack Amendment
governing regulated truck (49 U.S.C. § 14706) and rail traffic
(§ 11706). (The date of mailing the carriers disallowance
letter usually governs, not the date of its receipt by the
However, some traffic is not
subject to the Carmack Amendment, and therefore, the time limits
vary. For instance, a) on some piggyback traffic, the suit must
be instituted within one year from the date of delivery
(not disallowance); b) on ocean traffic, the suit must be
instituted within one year of delivery, but the carrier may
extend that date upon request received before the
expiration of one year. Airline claim limits vary for each
A system must be implemented to
periodically review the status of pending claims to prevent the
expiration of the suit-filing deadlines.
Note: Only a written statement
declining payment of a claim in whole or in part starts
the running of the time period for filing suits.
Note: An offer to settle or compromise
a claim is deemed a declination, but it must also state
that the remainder of the claim is disallowed. (See 49 U.S.C. §
Note: Dont wait until the last
day to request your attorneys to institute a suit. Set your
review schedule to allow at least 30 days lead time.
Commonly Asked Questions:
Q: How do I find the time limits for
filing claims against our carriers?
A: The carriers tariff or bills of
lading will specify the various time limits, but they could be
different via each mode, or different for carriers within the
same mode, particularly on traffic which is exempt from
The best procedure is to draw-up a
time limit chart listing these key periods for each carrier in
your routing guide. This will also help you to select the
carriers with the most favorable liability terms and conditions.
Q: Must we notify our own insurance
company of a claim against a carrier?
A: Yes, under most shippers cargo
insurance policies, the insurer stipulates that it must be given
notice of claims promptly, or within a reasonable time. If you
are not able to recover from a carrier, you may be time barred
from claiming against the insurer if you have not given it prompt
notice of your claim against the carrier.
Q: Must I use a specific claim form?
A: No, any written notice
containing the basic elements of a claim will suffice. (See
listing above under What Constitutes a Claim?)
Q: May I include interest,
administrative costs, freight charges, loss of profits,
attorneys fees, etc. in my claim?
A: Yes and
no. The measure of damage is
governed by common law. Freight Claims in Plain
English reviews the case law on this issue as well
as all other legal issues affecting claims.
Q: Can I recover a claim from a carrier
after it files for bankruptcy?
A: Yes. Call the D.O.T. for the name and
address of the carriers cargo insurer. 202 - 927-7600.
Get the cargo policy number in effect on the date of the loss.
Then write to the insurer and demand payment under the BMC 32
Endorsement. For details of this important coverage, see Transportation
Insurance in Plain English.
ABOUT THE COUNCIL:
The Transportation Consumer Protection
Council, Inc., formerly the Transportation Claims &
Prevention Council, Inc., changed its name in April of 1996 to
reflect a wider area of concern. Its mission is to give shippers,
through education and information, the tools to manage their
freight transportation with a minimum of loss and a maximum of
efficiency and cost control. This is done through its seminars,
annual conferences, publications, articles, disseminating
information on pending legislation, and helping to interpret the
impact of court decisions and new laws.
Over the years the Council has found
that shippers truly need this type of help. Shippers
expertise generally concerns their product, rather than
transportation, which is the area of expertise of the
carriers with whom they must deal. As a result, carrier drawn
tariffs, contracts or bills of lading may contain fine print that
is arcane to the average businessman, but will be the cause of
later disputes, claims and litigation. Only in transactions in
which terms are equally well understood by both parties can
satisfactory, litigation-free commerce be achieved.