Freight Claims: General & Special DamagesWritten by Neal Willis
A freight claim is not intended to be a profit center for a claimant, but rather to make the shipper “whole”, as if the carrier had performed their obligation according to the terms of the BOL contract and delivered the shipment as expected, with full market value intact. There are cases where the loss of profit as a result of the damage can be justified within a claim filing; however, in most cases, including profit in the claim is unacceptable.
It is presumed that in the event of damage, the shipper would send a replacement for the damaged item out to the consignee and that the shipper’s profit would be secured with the replacement shipment. With the intended profit secured by the replacement and profit also included in the claim, a double profit would occur, causing the carrier to be unreasonably burdened.
A freight (damage) claim is a demand from a carrier by a shipper or claimant for monetary reimbursement of a lost or damaged shipment, and the outcome of a claim settlement should be restoring the claimant to their original position as though no loss or damage had occurred. At the highest level, there are two types of damage freight claims: 1) General Damage and 2) Special Damage.
General damage is the direct loss/shortage or damage to the product and, it may sometimes address or include delivery. Carriers have what they call a “reasonable” amount of time to locate and deliver lost shipments and, depending upon the interpretation of the word “reasonable”, that amount of time can somewhat vary. For the most part, the industry standard ranges from within 7 days of the expected delivery date out to at least 2 weeks after the expected delivery date.
By looking at a carrier’s normal transit time estimate for any particular lane and comparing that to the actual amount of time it took for the shipment to deliver, you can reasonably conclude if something went terribly wrong.
Additional loss incurred beyond and as a result of the actual direct damage, such as a charge back penalty for a missed appointment due to lost freight, is considered to be special damage and is not recoverable. Other examples of charges that aren’t covered under special damages include fees for crews working on site, overtime, industrial equipment rentals, setup and installation, etc. This special damages rule even applies to expedited and guaranteed shipments, although at least you can potentially have the freight charges voided if you requested guaranteed service.
In some instances, full market value can include the price at which the item would have been sold for had it arrived as expected. It is important to remember that every claim carries has its own unique set of circumstances. No two claims are exactly alike.
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