What Do I Do With This Cargo Claim?
The seal is broken, a couple of pallets collapsed, and the consignee rejected the load. Now what do you do as the broker?
In a perfect world you will always remain the broker, and you will limit your role to claim facilitator. You will connect the shipper’s claim rep with the carrier’s claim rep/insurance company rep, and you will take an observer role while the shipper and the carrier work out the cargo claim. Decades of cargo claim law says that is what should happen, and as a broker when you hear there may be a cargo claim you should try to position yourself as a facilitator as much as possible, not as the company responsible for the actual claim.
If you can stay in that position your most important role is to make sure communication, and documentation is as clear as possible between everyone. Alert your shipper customer to claim filing deadlines (typically 9 months from the date of loss) and alert your carrier of any inspection deadlines. Make sure everyone is clear on what information is needed, what needs to happen to the damaged cargo, the accurate contact information for each party, and so on.
But in today’s market, brokers sometimes must take more direct responsibility for claims. If you must do that for contractual or customer accommodation reasons, then make sure you run a tight cargo claims handling machine.
A tight broker cargo claims handling machine:
- Tracks deadlines. Know the deadline for filing the claim with the carrier, know the deadline for filing suit, know how long the goods will be available for inspection, etc. Do not miss collecting against the carrier’s insurance company because you missed a deadline.
- Collects good documentation. Collect proof the cargo was in good condition at the origin and arrived damaged. Collect proof of the value of the damaged cargo, collect inspection reports, collect information requested by your insurance company and the carrier’s, and so on.
- Collects rights. Depending on contract language, brokers do not always have the right to file cargo claims directly against carriers. Prevent denials on that basis by getting the shipper to “assign” their claim to you, or by getting the shipper to give you their claim rights through another legal mechanism. Do this to ensure you have the legal authority to file the claim.
- Knows cargo claim laws and contract provisions. Know your contracts with your shippers and carriers. Know the Carmack Amendment, how it applies, and when it does not apply. Know these well to defend against bad shipper claims, to prosecute against bad carrier denials, and to provide good customer service when the facts are not in your favor.
- Keeps on it. The best claims teams I see are well organized, and they stay on the claims. They are prompt with information, they are clear in their communications and expectations, and they follow through so shippers, carriers, and insurance companies alike know the broker has real credibility when it comes to cargo claims.
Cargo claims are painful part of the brokerage business. Ease your pain by developing a strong claims handling machine.
