We are providing this basic information regarding the shipping/receiving process, to explain you the process to issue a claim to the carriers. Please, take into consideration this process and provide all information to us in case you receive damaged product or a shortage. If that is the case, we will issue the claim.
It’s much easier to win a cargo damage or shortage claim when the proper process is followed. Correctly notating damages to the bill of lading (BOL) and proof of delivery (POD) is a good start, but there’s more you can and should do to prevent further complications.
Below is a guide in a “Q&A Format” on how to strengthen the case when your shipment arrives with visible damage, concealed damage, or a shortage. If you receive goods under these categories, please advise us ASAP, and provide all required information within 24 hours so we can issue the claim. In doing this, our company will be able to respond faster to you.
It is very important to mention that if you receive goods with visible damage, concealed damage and/or a shortage, and you do not follow the process mentioned below, we (HVAC Mirage Incorporated) will not be able to issue a claim and will not be able to replace your goods.
Note: In case the customer is responsible to pick up the goods and was the one making the arrangements with the carrier to pick up the goods at the seller premises, the customer will be the one issuing the claim.
- WHO ARE THE GENERAL ACTORS IN THE SHIPPING/RECEIVING PROCESS?
- Shipper (Consignor): The person or company (HVAC Mirage Incorporated) who is usually the supplier or owner of commodities shipped.
- Consignee: Person or company (customer) to whom commodities are shipped.
- Carrier: Any person or entity who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. Each carrier has its own specific policies.
- WHAT IS A CLAIM?
A claim is a written statement that:
- Identifies a specific shipment.
- Provides a description of any loss or damage pertaining to the shipment.
- Request a specific sum of money.
- Provides reason(s) why the transportation company should be held liable.
Note: The carrier’s limits of liability vary for each specific carrier.
- WHAT ARE FOUR TYPES OF FREIGHT CLAIMS?
- Damages: Cargo that falls under this category must have visible damages upon receiving.
- All Short: This is when the entire shipment does not (for whatever reason) make it to the consignee/destination.
- Shortage: Shortages are different than “All Short” shipments in that they are usually the result of an incorrectly filled out bill of lading. Rather than the shipment being “All Short,” you are instead delivered fewer numbers of an item than recorded on the Bill of Lading.
- Concealed damage or shortage: If damages or shortages are discovered after freight is inspected and the proof of delivery is signed clear, the claim is considered “concealed.”
- WHO SHOULD FILE THE CLAIM?
- A claim may be filed by the shipper, consignee, or owner of the goods.
Note: In this case, the shipper will issue the claim ONLY if the consignee provides all the required information to do so.
- The shipper will clearly indicate the following as they will assist in the prompt conclusion of the claim:
- Name and complete address of the claimant.
- Telephone number, fax number, and e-mail address (if available).
- WHAT IS A WRITTEN NOTICE OF INTENT TO FILE?
A “Notice of Intent to file Claim” is a written statement that advises the carrier that damage was found and noted at the time of delivery. It also alerts the carrier that a formal claim and supporting documents will follow. This document is extremely important being that it satisfies the requirement of alerting the carrier within the allotted timeframe documented in the terms and conditions of the bill of lading (BOL).
Note 2: An inspection report or notation of the delivery receipt does not constitute a notice of a claim.
- IS THERE A TIME DEADLINE TO FILE CLAIMS FOR LOSS OR DAMAGE?
The deadline may vary depending on the carrier, but the following timeframe is a normal average.
- Claims should be presented/filed promptly to allow investigations to take place while facts are reasonable “fresh”.
- Verbal notice of damage does not constitute the filing of a claim.
- A “Notice of Intent to Claim” must usually be filed in writing within 48 hours from the date of delivery for shipments noted damaged.
- A “Notice of Intent to Claim” must usually be filed in writing within 72 hours from the date of delivery for shipments with concealed damage. Consignee must retain original shipping carton and contents and make them available for inspection.
- Most of the time, all claim forms will need to be filled out completely (including claim amount) to be considered valid.
- HOW DO I GET A CLAIM FORM AND WHERE DO I FILE A CLAIM?
Claim forms may be requested to carrier.
The carrier can provide information where to send the claim.
- WHAT DOCUMENTS ARE NEEDED TO SUPPORT MY CLAIM?
- Claim Form: A formal demand for reimbursement for cargo loss or damage which includes the claimant, damage description, and the amount being claimed.
- Proof of Value Original vendor’s invoice: Complete original invoice which verifies the claimed amount does not exceed the terms of sale (value of good destination) and excludes any prospective profit. The original invoice must disclose all discounts and allowances if any. A clear photocopy of the complete original invoice should be acceptable.
- Legible copy of freight bill or paid freight bill(s), if available: Include the original paid freight bill or a signed statement verifying freight charges have been paid in full on the shipment against which the claim has been filed. For a claim to be concluded, all freight charges must be paid unless there is a special agreement between the claimant and the carrier.
- Delivery Receipt/Proof of Delivery (POD): Serves as evidence of receipt and condition of the goods when they arrive at destination. On the POD, make sure to notate any discrepancies in the packaging, especially if the shrink wrap is torn, missing, or suggests that the product was repackaged (e.g., the color of the shrink wrap is not the typical color used by the shipper).
- Bill of lading (BOL or B/L): Serves as evidence of the receipt, as well as the kind, quantity, and apparent condition of the goods. It is a document that establishes the terms of a contract between a shipper and a carrier. It serves as a document of title, a contract of carriage and a receipt for goods. Because there are concerns about how the shipments will be tracked, they are documented with the assistance of a bill of lading, which is used to indicate who and where the package is coming from, and who and where it is going to.
- Photos of Damage Goods: Serves as visual evidence relating to the verification of the damage. Pictures are worth a thousand words. Take pictures of how the shipment was received. Pictures of the freight on the carrier’s truck are golden. Any pictures of packaging and pictures of the damaged item will help your claim.
- Packing List: List of goods.
- Carrier Inspection Report: If applicable.
- WHAT IS THE PURPOSE OF THE DELIVERY RECEIPT?
The primary purpose of the delivery receipt is to preserve a precise record of facts existing at time of delivery so far as these facts can be reasonable identified.
- WHAT ARE VAGUE NOTATIONS OF DAMAGE?
The following terms are not commonly acceptable on a delivery receipt and will probably not substantiate a claim as they are too vague and unclear:
- Subject to inspection.
- Subject to count.
- WHAT ARE SOME EXAMPLES OF ACCEPTABLE NOTATION OF DAMAGE OR SHORTAGE?
- 1 of 6 cartons damaged on corner.
- Forklift damage to bottom right of unit.
- 1 box damaged and product exposed.
- 2 of 6 boxes dented.
- 1 missing carton out of 6.
- 1 of two skids damaged on corner.
- WHAT IS CONCEALED LOSS OR DAMAGE?
Concealed loss or damage means that no one has noted any external evidence of the loss or damage which is discovered when the consignee opens the package on or after delivery. For this type of a claim to be usually considered, the claimant must provide conclusive evidence that the damage or shortage occurred while the shipment was in the possession of the carrier.
When the damage to contents of a shipping container is discovered by the consignee that could not have been determined at time of delivery, it must be:
- Reported by the shipper or consignee to the transportation company usually within 72 hours of delivery.
- A request for inspection should be made at that time.
- All merchandise must be maintained in the original shipping container, in the same condition it was in when the loss or damage was discovered.
- Notification of concealed damage or shortage usually is requested by carriers to be reported in writing within 5 days of delivery.
- It is more difficult to receive reimbursement in this case, but you should document these claims anyway.
Note: Stamping or writing on the POD such statements as “Subject to Concealed Damage Inspection” does not usually cover the consignee in claims such as this. This is a common misperception.
- WHAT IS A COMPROMISE SETTLEMENT AND WHEN IS IT USUALLY OFFERED?
- If, after the investigation of the damage it is undeterminable which party was negligent (consignor, carrier, or consignee), the carrier may make a compromise settlement offer.
- It is the choice of the claimant to accept or reject the compromise offer.
- WHAT IS DECLARED VALUE?
Declaring a value simply raises the financial legal liability of the carrier beyond the limitations stated on the carrier’s or forwarder’s freight bill, tariff, or other contract of carriage.
- DO WE STILL HAVE TO PAY THE FREIGHT BILL IF A CLAIM HAS BEEN FILED?
- Payment of freight charges may not be delayed due to alleged loss or damage. Charges should be paid in full and the portion applicable to lost or damaged item included in the freight claim.
- Claims and freight charges are two different transactions.
- Without payment of freight charges the transportation contract has not been completed.
- A valid claim must not be paid until freight charges are paid.
- WHAT ARE SHIPPER’S COMMON RESPONSIBILITIES?
To prevent loss or damage during normal transportation handling, the shipper has the following responsibilities:
- Proper packaging and loading of goods.
- Proper markings on the packaging.
- Proper description on the shipping papers.
- WHAT ARE RECEPIENT’S COMMON RESPONSIBILITIES?
- The recipient must carefully identify and document loss and/or damage on the delivery receipt at time of delivery.
- When recording loss or damage, the recipient should use specific details and try to avoid general or generic terms such as “box damaged” or “torn”. This type of notification does not provide adequate support for the claim.
Note: A notation of “subject to inspection” by itself, is not usually considered a valid notation of loss or damage.
- WHAT ARE THE CARRIER’S COMMON RESPONSIBILITIES?
- Acceptance of Goods: It is the first duty of the common carrier that he should accept, the goods from anyone who wants to employhim except in few special cases.
- To Carry the Goods Safely: It is the duty of the common carrier that he should carry the goods safely. In case of loss or damage he will be responsible.
- Common Route: He should carry the goods by the general route. He should avoid adopting the shortest route. He should treat like the ordinary circumstances.
- To Obey the Instructions: He should also obey the instructions of the sender the goods related to transportation.
- In Time Delivery: It is the duty of the common carrier that he should deliver the goods within the time expressed in the contract.
- Proper Place: He should also deliver the goods at a proper place mentioned in the contract.
- Delivery to a Right Person: It is also the duty of the common carrier that should deliver the goods to the right person. Otherwise, it will be held responsible.