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I had a broker try to do this to me last year. I sued them for non-payment in small claims court and was awarded my full freight charges.
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I had a broker try to do this to me last year. I sued them for non-payment in small claims court and was awarded my full freight charges.
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In my case I didn't pay the carriers (nor were they expecting payment), their insurance covered the entire cost of the claims within 2 months, and I'm still doing business with both carriers and shippers. Must be because I'm good lookin..
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No probably because you deal with mostly Yankees and most of them don't know shit from putty...
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Maybe.. or maybe they understand you don't expect payment when you've failed to deliver the goods.
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So, you screwed the carrier for payment and you (or your customer) likely got the cost of the freight (that was never paid) as part of the claim payout.
In the end the poor carrier had to pay wages, fuel, etc for this load and got nothing out of it. You sound like a great broker to work with!
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Nobody paid for freight as the loads were not delivered. When you buy something and you don't receive the goods or services do you still pay for them? You know, they probably really really REALLY tried to get them to you and they spent time and money on getting them to you, but it just didn't work out. So you should pay them anyway, right? In business one is paid for positive outcomes, not incompetence and failure.
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The payment of the freight bill completes the contract that the shipment was originally intended to go from point a to point b. The payment of the insurance claim can now proceed because the payment of the contract was complete and it shows that both parties are not accomplices in trying to move a piece of junk 10km and receive a good payout for it. Without that payment it was not a legal contract/agreement of carriage and basically it did not happen. This is the case for all insurance claims, not just the trucking industry.
In the end, it is expected that the claimant pays the freight costs, completes the contract of carriage, and can add those freight charges to the total claim regardless of how far the freight moved.
If the carrier or insurance company pays it out without the payment of the freight costs it is completely up to them to make the agreement - who is going to argue if it gets settled between two parties? Maybe the carrier wants to lower the amount of the claim on their loss run - which is completely up to them.
Either way-its a moot point. It gets paid and the claimant adds that price to the claim.
In the end, it is expected that the claimant pays the freight costs, completes the contract of carriage, and can add those freight charges to the total claim regardless of how far the freight moved.
If the carrier or insurance company pays it out without the payment of the freight costs it is completely up to them to make the agreement - who is going to argue if it gets settled between two parties? Maybe the carrier wants to lower the amount of the claim on their loss run - which is completely up to them.
Either way-its a moot point. It gets paid and the claimant adds that price to the claim.
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Gentlemen, gentlemen, please! Freightbroker is only relaying his experiences in this matter, just like all the other posters have done. PackRat is correct, a carrier is legally entitled to his freight charges regardless of a freight claim. It is also correct to say that the original freight charges (or a portion of them) become part of the overall claim along with the replacement/repair of the damaged goods, the costs associated with disposal of the damaged goods and the costs to deliver the replacement/repaired goods. Whatever is required to make the shipper (or owner of the goods) "whole again." Jim L is also correct that payment of the freight charge completes the contract of carriage. My original post on this matter was not to dispute that freight charges must be paid, but to suggest that delayed payment of the freight charge on it's own, should not prevent the carrier from starting an investigation, or contacting his insurer. No question, before a claim is paid out by either the carrier or the insurer, proof of the original freight invoice is required. What bugs me the most, is when a carrier demands payment of a $500.00 freight invoice before he will even begin to discuss the settlement of a legitimate, documented $800.00 freight claim on the shipment. I guess I have had too many experiences where a carrier refused to "put on his big boy pants" and settle a claim properly after I have sent off his check. As a shipper, you give-up what little leverage you might have had with the carrier once the freight charges are paid.
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I wonder, then, why my dumb carriers never bothered to even bring up the topic of freight charges then. Could it be that they were looking out for me, the customer? Nor did their insurers kick up a fuss.. in both cases the insurers wanted a shipper's bill of sale showing the value of the goods. In both cases the insurer paid out the full amounts direct to my shipper. Freight charges never came up, although the insurer also paid for the carriers' other losses regarding these incidents. In one case the shipper offered me a replacement load.. same carrier that had failed previously got the load and delivered it.. I paid him in my usual 72 hours and we were golden. I even got a Christmas card from him..
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You're right Freight broker. In the general scheme of things, especially if the loss is large, the freight charges are a small, somewhat insignificant component of the total claim. Reluctance to pay them should not automatically be construed as some sort of nefarious conspiracy on the part of the injured party to defraud the carrier or the insurer. Get the process started, involve the proper parties, in other words, fix the screw-up. The freight charges will become a line item on the final tally.
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The carrier may have been paying the claim out of his pocket so did not want to add anymore charges. Insurance companies are truly very basic money in versus money out so any good trucking company knows what they can claim and what they should just pay. Plus a lot depends on a Carriers deductible we chose a 10K deductible because it works for us so a 12K claim is not worth putting through insurance so we obviously would not charge for freight. But also remember don't begrudge the carrier for wanting to be paid because the cost of freight is usually in the cost of goods and the shipper then also claims the cost of freight on top in the claim getting paid twice (which for the inconvenience it is causing should not be an issue).
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You are 100% correct, but I never said the carrier did not have to entertain the claim. A carrier is under obligation to respond to the freight claim. However, without payment of the full and complete freight charges, the carrier is under no obligation to pay the freight claim ... which is exactly what I said ... sorry if I was not clear on that part.
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It's not an industry standard. It's the law.
Like all laws, there is no room for interpretation ... that's why they are call laws.
If you hold an apple above your head and let it go, it will fall. That's the law of gravity. There is no interpretation to the law of gravity ... it's law.
There are rules in dealing with freight claims and they are spelled out in the law. One of those rules is that carriers must respond to freight claims within a certain time period. Another of those rules is that the freight bill must be completely and fully paid before the carrier has to pay the claim. If the claimant tells the carrier to shove the freight bill, then the carrier doesn't have to pay the claim. If a certain time period (9 months I think, but check that) goes by without action, then the claim is defunct.
Basic SOP for claims:
1) Claimant issues Intent to Claim letter to carrier.
2) Carrier responds "I have received your Intent to Claim".
3) Claimant issues claim
4) Carrier accepts or denies claim. Carrier gives reason(s) if claim is denied.
5) Claimant issues evidence, and copy of paid freight invoice and supporting backup, and cost of claim including freight charges.
6) Carrier pays claim, or tells claimant to sue him.
Remember that these laws were written about a hundred years ago to protect shippers (John Q. Public) from the most unscrupulous of transporters ... bed bug haulers. Frankly, there are so many ways out of paying a claim that unless it's for big dollars, it's not usually worth the claimant's time or energy to process one.
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Back to the original topic ... I kind of like the online ones. For the most part I find that they are fair contracts. If negotiation needs to be done, it has been my experience that it is a fairly simple process. The only fly in the ointment is a RMIS insurance certificate. Our insurance company, Old Republic, doesn't like to issue RMIS a certificate as they are not a "real" certificate holder ... in the end they do it anyways.
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I think there's an echo in here... haahahaa...
You are correct about the 9 months sir... And quite correct about the strength of law. In this case it is the Highway Traffic Act as referenced in my post from earlier.
I wish I could like your comment more than once!
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Hahaha, yea, I know ... I read yours after I typed mine, but was just too damned lazy to re-edit it .... LOL
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It would only be the HTA if the load originated in Ontario. Any load originating in the US would fall under US regulation, regardless of the destination. Glad to see we all can agree that payment of the freight charges only relates to final payout of the claim and does not prevent a carrier from initiating an investigation and acknowledging the existence of the claim.
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I just reread your thread ... the case of an accident and complete write off is a whole different kettle of fish. What was being spoken about earlier is the delivery of damaged freight. In case of an accident, you are correct ... insurance pays off the whole thing right then and there and freight charges have nothing to do with it.
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amen to that.. I'm all fought out on this topic. Hopefully any claims we get are resolved to everyone's satisfaction.. stuff happens and when we can move on from it then its a good day.