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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 carrier's liability. Often contracts will adopt common carrier tariff rules, as described herein.

What 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 carrier's "Pro number," shipper's number, vehicle number, origin date, delivery date, and commodity description.

The claimant's 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 carrier.

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 carrier's 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 Interchange (EDI).

Claims should be addressed to the carrier's claims manager at the carrier's home office.

Personal delivery to a carrier's 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 carrier's claims manager.

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 unloading.

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.

Details of a Claim
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 loss. Example:

10 cartons clothing water damaged @ $100 ea. = $1,000
2 cartons shoes short @ $500 ea. = $1,000
3 cartons china crushed @ $100 ea. = $ 300
$2,300 Less Salvage - 150
Amount of Claim = $2,150

Note: See exception notation on delivery receipt dated _______. Confirmed by inspection report enclosed, dated __________.

Amount of Claim
The amount of the claimant's 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 amount.

Supporting Documentation

Claims must usually be supported by:
a) The original bill of lading
b) The paid freight bill
c) Proof of the value of the commodities lost or damaged
d) Inspection reports, if made
e) Copies of request for inspection
f) Notification of loss
g) Waiver of inspection by carrier
h) Special documents when appropriate, such as:
• Photographs
• Temperature reports
• Impact records
• Condemnation certificates
• Dumping certificates
• Laboratory analysis
• Quality control reports
• Package certifications
• Loading diagrams
• Weight certificates
• Affidavits
• Carrier's passing reports
• Loading and unloading tallies
(Facsimile copies are generally acceptable)

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 claimant's furnishing a copy of the original document.

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;

a) If a claim is not acknowledged within 30 days, or
b) If a claim is not paid, compromised or disallowed within 120 days, or
c) If the carrier does not provide status reports every 60 days thereafter, it should be notified of its violations of the government's 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 carrier's headquarters is located.

Suit Deadlines
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 time limits.

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 carrier's disallowance letter usually governs, not the date of its receipt by the claimant.)

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 carrier.

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.  14706(e)(2)(A)).

Note: Don't 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.

Most Commonly Asked Freight Claim 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 government regulations.
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, attorney's 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 carrier's 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.

Source: Transportation Consumer Protection Council (TCPC). See website www.transportlaw.com