What Happens When LTL Freight Is Noted & Refused Damaged?

Written by Neal Willis

damaged-shipmentWhen freight is refused because of noted damage, it’s important to advise the LTL carrier in a timely fashion of the location to which the damaged freight should be sent by providing them with an address and contact name as well as the telephone number of someone there.  When a consignee refuses freight and notates damage on the bill of lading as the reason for refusal, the carrier needs someone to take possession of the freight so it’s out of their way. LTL carriers are not in the business of storing freight. It takes up valuable space while in their possession and damaged freight only gets in their way and causes them headaches and problems.

LTL carriers will typically reach out to the shipper first to determine if they can deliver the freight back to them.  If for some reason the shipper doesn’t accept it back, then the carrier may reach out to the party responsible for paying the freight charges and/or another 3rd party for a disposition on where to send it.

noted-refused-damagedUsually after about two weeks (give or take a few days), if the carrier hasn’t been successful in finding anyone to take possession of the refused freight, they will begin invoicing for storage charges for the inconvenience of having to store it.  After storage fees have accrued for a period of time (typically around 30 days) and they still haven’t found anyone to take possession of it, they will notify the party responsible for the invoice that the freight will be sold at auction.  The proceeds from the sale will be used to help the carrier recoup their storage fees.  If this ever happens and the freight is sold at auction, any type of settlement agreement from the carrier for damage is essentially a lost cause.

It’s important for the party who decides to take possession of the damaged freight to notate the damage again on the delivery receipt when they receive it back from the carrier, so there are no questions about the damage having occurred while in the carrier’s possession.  Taking pictures of it upon arrival is recommended and, until the claim is resolved, the item should not be used and should be moved as little as possible from where it was delivered. It should be placed somewhere out of the way and all of the original packaging should be kept until the claim is resolved with the carrier.  The carrier and/or inspection agency needs to be able to rule out packaging as a cause of the damage.  Keeping the original packaging is necessary in order to determine if it was a contributing factor to the damage, and failure to save it could affect a settlement agreement.

Should a carrier wish to extend a settlement offer to a claimant, they may request to pick up the damaged item(s) for salvage, which would allow for them to mitigate the claim amount through some sort of salvage attempt (i.e. selling it for scrap).  If the item(s) are not available and/or were discarded without the carrier having the chance to pick it up, then a settlement offer may not be extended by the carrier.