Concealed damage claims are one of the most challenging and frustrating types of freight claims because it is so difficult to prove who was responsible for the damages. In addition to this, there are several myths regarding the rules and processes for filing concealed damage claims.
This blog post covers 3 myths to dispel around concealed damage claims as well as 5 tips to stay proactive on the front end when it comes to concealed damage claims you will have to file.
Myth #1: Carrier Only Pays for 1/3 of the Damages
In the case of concealed damage claims, it is common for carriers to pay for 1/3 of the claim value; the rationale is that the damage could have been caused by the shipper, the carrier, or the consignee. Since the concealed damage could have occurred in one of three places, the carrier justifies paying 1/3 of the cost of the concealed damage claim. However, concealed damage claims are more similar to typical freight claims than many people realize.
The challenge in concealed damage claims is a matter of evidence. If the consignee signs the delivery receipt as clear of damages, it creates the presumption that the shipment was delivered in good condition. However, this is only a presumption, and it can be rebutted through evidence that the consignee did not cause the concealed damage.
As is the case with ordinary freight claims, if the carrier caused the damage, they should pay the claim in full. If they did not cause the damage, they should dismiss the claim. Therefore, the challenge for the claimant is in proving that the carrier is in fact liable. A 1/3 payment only makes sense as a last resort if it is unknown as to who caused the damages.
Some carriers are willing to offer a courtesy settlement. Not all carriers will do that, however. The sooner you notify the carrier of the issue the better. Treat freight damage claims, and especially concealed damage claims, as a court case. Whoever can provide the most well documented (and pertinent) evidence (to show beyond a reasonable doubt) that the carrier held most of the liability then typically you will win the claim or have a better offer. But when it comes to a “concealed damage” claim a majority of that is out the window.
At the end of the day, regarding concealed damage claims carriers will say;
- Improper packaging,
- That the delivered the correct amount tendered or handling units at (2 pallets pick up and 2 delivered. Especially when there are pallets with boxes and they may be damaged or lost),
- And the list goes on.
Myth #2: You Can’t File if You Signed the Delivery Receipt as Clear
When you sign the delivery receipt without any notations of loss or damage, it creates the presumption that the shipment was in good condition at the time of delivery. However, this presumption can be rebutted with proper evidence. If you’ve signed a clear delivery receipt and discover concealed damage later, it becomes your responsibility to prove that the shipment was damaged at the time of delivery. But don’t let that stop you from filing the claim.
Myth #3: You only have 15 Days to File a Concealed Damage Claim
Well, the 15-day rule BEFORE April 18th was a notification of concealed damage. However, the NMFTA has just changed the time period from 15 days to 5 days for notification on concealed damage claims.
You should report your concealed damage to your carrier as soon as possible, and certainly within 5 days of delivery. However, it is still possible to file a concealed damage claim after 5 days, it is just more difficult.
So what exactly happens after the 5-day mark?
After 5 days, the consignee has the additional burden of proving that the damage did not happen after delivery.
Prior to the 5 days, the consignee only has the burden of proving that the damage did not occur at the destination.
Because it is more difficult to prove a concealed damage claim after 5 days have passed, you should file within this time period whenever possible. However, you can still file a concealed damage claim after this time period if necessary.
5 Tips and Best Practices to Stay Proactive with Concealed Damage Claims
Our soon to get freight claims certification Freight Claims Specialist, Chris Raway, relayed to me the following notes on tips and best practices to stay ahead of concealed damage and claims by stating:
When I was going through the Police Academy (editor’s note: doesn’t this make Chris perfect for claims?), my instructors always said “pay attention to detail.” When filing a concealed damage claim, if I don’t understand the claim, I’ll call the customer and somehow I always work in the phrase “help us help you.” Get all the correct documents the first time and hit the carrier with all we have right away to get them back on their heels. I don’t like it when the carrier gets to “hold all the cards,” so to speak, so we must be prepared to answer any and all questions.
Here are the 5 tips our freight claims specialists provided to help mitigate concealed damage claims:
- Inspect the freight right away if possible.
- Break the shipment down right away.
- Notate any issues or things that look out of the ordinary on the POD (packaging, shrink-wrap not intact, pallet being busted, etc.).
- Document. Document. Then document some more. As the shipper, make notations on the OBOL such as the trailer number to see if the product was removed from that trailer and loaded onto another one. This occurrence will most likely not happen, but again we are documenting the shipment. If it isn’t written down or documented, it didn’t happen.
- Have the shipper take photos as the freight is being shipped out and then when it is received.
Shippers have to try and be at least one step, if not more ahead of the carriers. Especially with the new 5 day notification period on the concealed damage claims.
How do you proactively mitigate concealed damage or freight damage in general? Let us know in the comments section below!
If you are looking for help in better managing freight claims, contact us and we will help take that burden of work off your shoulders.