Freight Claims

FR8 4ME

New Member
2
Hi Everyone,

Curious to know how people are finding their freight claims are being received by small to mid-sized carriers. I am on the third party side myself and I find it to be an increasingly adversarial experience lately. A standard response seems to be "this claim isn't fair" and "I am telling my insurance company that is not a good claim" almost regardless of the circumstances. I also find that insurance companies are not willing to talk to you about a claim unless the insured directs them to do so. As a third party this seems to leave you with very little protection and a lot of exposure.

From the carrier side I'm not sure if the policy premiums increase dramatically from freight claims or if carriers are seeing a higher number of frivolous claims these days?

Looking forward to hearing what some of the members here think about claims and or some of your experiences handling/settling claims.
 

Freight Broker

Well-Known Member
30
In the event of a claim I always go to the carrier first to see if they would perhaps want to settle without involving the insurance. If they don't I contact their insurer direct.. It's a process.. if the information isn't there to support a claim then the carrier has nothing to worry about. If the information does support a claim then the process moves along until a settlement is reached.

Understandably insurers need to be careful to check everything due to the number of bogus claims that are submitted..
 

bellcitytransport

Active Member
15
Premiums are affected by claims regardless, no carrier wants to have a claim of any sort. Receivers tend to push back on carriers right away when the freight doesn't arrive the way the receiver expects it to. Over the last few months, mostly at the start of the Covid pandemic drivers had little to no access to shipper or receiver docks. Drivers weren't able to inspect the freight prior to loading or during loading. There seemed to be an increase in intent to claim at this time. New procedures and policies have been put in place over the last few months to help minimize these frivolous claims.

That being said, I've always had a hard time understanding why the carrier is responsible for crushed cases, this is a result of product pushing down on product which are in cases that are not capable of supporting the weight of all the product. Or a mixture of moisture/humidity and road conditions, alittle bounce here and there causes the cases at the bottom to loose structural integrity. Sounds like a shipper or the purchaser of the cases issue, not a transportation issue.

However, these crushed cases type of claims are the ones in the reefer industry tend to payout the most one from my experience.
 

bellcitytransport

Active Member
15
All shipments offered for transport must be properly prepared and/or packaged to withstand the normal rigours of over the road transportation.
I agree but all to often we know this isn't the case. Things can look good on a the dock, the purchases saved the company some money on those new "cheaper" cases but after 1500-2500 miles of bounce things can look very different.
 

loaders

Site Supporter
30
I do tend to agree with you bellcity. In situations like this, my first question to the customer is “ have you experienced this problem with any other carriers hauling the same product?”. If it is a packaging problem, then every carrier would be seeing crushed cases. However, if the problem is unique to you, then perhaps it might be time for a drivers meeting about speed and quick starts and stops.
 

bellcitytransport

Active Member
15
I do tend to agree with you bellcity. In situations like this, my first question to the customer is “ have you experienced this problem with any other carriers hauling the same product?”. If it is a packaging problem, then every carrier would be seeing crushed cases. However, if the problem is unique to you, then perhaps it might be time for a drivers meeting about speed and quick starts and stops.
I agree.. unfortunately we've been the first carrier with the new "packaging" however with great relationships the customer usually comes back and admits it was an issue with all the loads that came from said shipper.
 

FR8 4ME

New Member
2
Thanks for the thoughts everyone. Claims are bad for all of us, no one is generating any revenue while they work on them and they seem to take way too long to settle. Packaging can be an issue and we generally follow a similar protocol to what bellcity outlined when these situations arise.

I have had specific issues with 2 different carriers breaking seals on loads of food grade product, although instructed not to do so in writing on the load tender and being told verbally at the time of booking that the seal had to remain intact. In both instances the claim was rejected by the carrier out of hand and we were forced to process the claim through our own insurance, leaving our insurer to try and recover the payout.

Have any of you had experience with clear well documented claims flat out refused by a carrier? How do you handle it, are you able to register a claim with the involved carriers insurer without the carriers support or do you end up putting it through your own insurance and leaving your insurer to battle it out with the carriers insurer to recover costs? Just curious to know if we are all facing the same types of issues or if it's just me.
 

bellcitytransport

Active Member
15
Thanks for the thoughts everyone. Claims are bad for all of us, no one is generating any revenue while they work on them and they seem to take way too long to settle. Packaging can be an issue and we generally follow a similar protocol to what bellcity outlined when these situations arise.

I have had specific issues with 2 different carriers breaking seals on loads of food grade product, although instructed not to do so in writing on the load tender and being told verbally at the time of booking that the seal had to remain intact. In both instances the claim was rejected by the carrier out of hand and we were forced to process the claim through our own insurance, leaving our insurer to try and recover the payout.

Have any of you had experience with clear well documented claims flat out refused by a carrier? How do you handle it, are you able to register a claim with the involved carriers insurer without the carriers support or do you end up putting it through your own insurance and leaving your insurer to battle it out with the carriers insurer to recover costs? Just curious to know if we are all facing the same types of issues or if it's just me.
This a relatively new area for claims, not sure why because loads have been sealed for years. However USDA and CFIA have placed more emphasis on chain of custody, etc in the last couple years, mostly as a result of illnesses from consumers.

I've heard of the exact events you're speak of occurring, the 1st event the claim was denied because their was no proof that the chain of custody had been broken or tampered with, the seal was simply cut without witness. The second was paid out, and product was disposed of. It is imperative that you have a clear statement on your carrier contract that ANY seal tampering will result in a claim for the freight, as well a process for when seals need to be broken. Seals may be broken to move the freight from a broken down unit to a new one. On multiple stop loads. To be inspected by authorities. You and your customer need to have a practice in place to handle each of these events should they occur.

Unfortunately a carrier and their insurance company will always defend themselves from a claim or mediate their loses however possible. Usually best to let your insurance and the carrier's insurance hatch it out, either way, it's a lose lose situation.
 

loaders

Site Supporter
30
Certainly your first steps should be to work with the carrier and their insurance provider. In spite of what the carrier might say to both you and his insurer, most insurance companies know the rules pertaining to freight claims and will respond in some manner. If they don’t, then it is time to involve your insurer and let them pursue the matter. Although it doesn’t happen often, we have experienced cases where the carrier dismisses the claim outright, as if a legitimate freight claim could never happen to them. Kind of like a carpenter who has never hit their thumb with a hammer! No one likes them, but freight claims are a fact of life in transportation and the better carriers have an established process in place to handle them in a professional, non adversarial manner.
 

27426

New Member
2
I've always found it very much depends on the carriers deductible. Big claims are easy, anything under 5K is like pulling teeth. That's when you want to have some history with the carrier. Does anyone actually reach out to the insurer on claims below the deductible? Does an insurer consider it part of service the carrier is paying them for or is it a non starter since there is no cost to the insurer?
 

Freight Broker

Well-Known Member
30
I reach out to the insurer on claims below the dedctible if I'm left to pay it. I've had carriers skip out on paying the deductible and to keep my customer happy I've been obliged to pay it. In that case I contact the carrier's insurer and let them know that there was a claim and that the carrier left me hanging with the deductible... of course.. before I do that I let the carrier know in order to give them a chance to make the choice.. i.e. pay the little deductible or risk an increased insurance premium. Insurers get nervous about claims, however small they may be, and they view them as increased risk. If they choose wisely and pay the deductible then the claim goes no further and their insurer is not notified.
 

SCAM CHASER

Site Supporter
10
So let's do a little poll....................
You are the carrier. Unfortunately, on a produce load from TX to ON, your driver runs off the road, and the produce is not salvageable. The load is worth $10,000.

What is the carrier's limit of liability? No value on BOL
1. $2/lbs based on the total weight of the shipment
2. $10,000
3. Unlimited

Now look at the attachment

Comments??
 

Attachments

loaders

Site Supporter
30
There seems to be more and more customer contracts that include indemnification clauses such as this. Anything and everything that could happen while hauling our freight will be on your shoulders. No wonder insurance is getting more expensive and harder to obtain.
 

Kysanahc

Member
5
There seems to be more and more customer contracts that include indemnification clauses such as this. Anything and everything that could happen while hauling our freight will be on your shoulders. No wonder insurance is getting more expensive and harder to obtain.
Just went through this with XPO Managed Transportation side. Wanted us to take the blame for anything and everything.
 

Tip15

Member
5
So let's do a little poll....................
You are the carrier. Unfortunately, on a produce load from TX to ON, your driver runs off the road, and the produce is not salvageable. The load is worth $10,000.

What is the carrier's limit of liability? No value on BOL
1. $2/lbs based on the total weight of the shipment
2. $10,000
3. Unlimited

Now look at the attachment

Comments??
I would think the carrier would be liable for $10,000.00 (cost of the goods). Under the Carmack Regulations, carrier is liable for the actual cost of the shipment even if over the $2/lbs threshold. My answers is assuming no indemnification agreement was signed.
 

WALTERK

Active Member
10
Just take your pen and cross, cross, and cross some more and send it back. Problem solved. These are TQL like schemes targeting the stupid ones that are willing to take it in......
 

loaders

Site Supporter
30
Unfortunately it not just large brokerages that include this type of clause in their contract, the large multi national shippers do as well. It makes for a difficult decision when faced with the choice of getting 20 loads per week by signing their contract, or 0 loads per week if you don't.
 
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