Understanding the Claim Process: Part V

Why "Hands Off" Is the Best Policy
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Your mom would be proud that you cleaned up the mess, but carriers won’t be. If you have damaged merchandise, it’s okay to leave it as is. In fact, the shipment must be kept in its original packaging and in the same condition it was when the loss/damage was discovered until the claim has been resolved.

Is this really necessary?
Think of it like a crime scene – you don’t want to contaminate the evidence before the detectives arrive on scene. Freight needs to be kept in its original condition because the carrier has the right to require an inspection of the freight.  If the freight is not available for the carrier to inspect when they request it, they may deny the claim.

Another reason to keep the freight is because carriers may have a right to take the freight as salvage upon payment of a claim for a total loss.  Consignees should accept damaged goods into their possession, unless the shipment is completely worthless.  Claimants (that’s you) are required under the Carmack Amendment (a law that governs carrier liability) to attempt to mitigate damages by salvaging the undamaged portion of the shipment, repairing the damaged goods, or selling the product for scrap or at a discount.  If the claimant waives their right to salvage their own goods, the carrier is then allowed to resell or salvage the damaged freight. (For some not-so-light-reading, you can brush up on the Carmack Amendment here).

But what if my shipment contains food or hazardous materials, do I still need to leave it as is?
No. The rare exceptions to this rule are food or hazardous materials that cannot be resold or salvaged, or can have potential health hazards if they are left in the damaged state.  If this is the case, though, the carrier still needs to be alerted to this fact before the shipment has been disposed of.

How long do I need to keep my damaged shipment?
According to the Transport and Logistics Council, there is no limit to the time that damaged goods can be held for inspection.

I don’t really have the space to keep my damaged shipment as-is for a long period of time. Help!
If your shipment is completely destroyed and the goods cannot be kept long due to space limitations, the Transport and Logistics Council recommends you do the following:

  1.  Request an inspection promptly upon delivery or discovery of shortage or damage. This can be done by phone or email, but always follow up in writing, and keep a copy.
  2. If the carrier fails to inspect the goods within a reasonable amount of time – approximately a week or 10 days – send another written notice.  Tell them: a) that the goods will be held until a certain date only; b) that if they fail to inspect the goods by then they will be deemed to have waived any right of inspection, and c) that the goods will be disposed of or salvaged after that date.
  3.  If this is a significant claim, it’s recommended to retain an independent inspection agency to inspect the goods and provide a report prior to disposal or salvage.  In any event, the damage should always be documented carefully and accurately – condition of the packaging, a description of the damage, photos, etc.

What happens to my shipment and the goods after the claim is resolved?
If the carrier accepts full liability and pays the claim in full, they have the right to take possession of the damaged freight within a reasonable time period.  If you have the goods, you must contact the carrier and request removal of the goods from your premises within a reasonable amount of time.

Bottom line: unless your shipment is hazardous or will start to rot if its allowed to sit in your business, it must be kept in its original condition and packaging until the claim resolved. Yes, this could mean that you’ll have to deal with it being there for a while, but it’s important to give the carrier and inspectors access to the shipment – and it can help increase the odds of your claim being approved (which is always a good thing!).

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Your Guide to Understanding the Claim Process: Part I
It’s not a particularly fun topic to study up on, but knowing the ins and out of damage and claims before it happens can help save you a lot of headache, time and potentially money down the road.

Your Guide to Understanding the Claim Process: Part V
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