Payment Held for Pending Claim

[LrgCar]

Hi Team,

We did a load for a US broker and delivered it all fine, however receiver noted under the wrap there were some scratches on their equipment which they agreed could have not been caused in transit as the freight was wrapped and no damage to wrap or shifting to the load. We sent paperwork and an invoice, and we received a notice of a pending claim, no problem these things happen and we have our proof. The invoice aged 30 days and our accounting followed up and we were advised payment was on hold due to the pending claim, we asked and were not given much details, the invoice is now 68 days old and there is still no formal claim from their client, what can we do to get our money?

 

[tasuinam]

Hi Team,

We did a load for a US broker and delivered it all fine, however receiver noted under the wrap there were some scratches on their equipment which they agreed could have not been caused in transit as the freight was wrapped and no damage to wrap or shifting to the load. We sent paperwork and an invoice, and we received a notice of a pending claim, no problem these things happen and we have our proof. The invoice aged 30 days and our accounting followed up and we were advised payment was on hold due to the pending claim, we asked and were not given much details, the invoice is now 68 days old and there is still no formal claim from their client, what can we do to get our money?

We had something similar - we emailed the customer and the borker with all the paperwork in one email
Also cc our insurance company - and asked for a written notice that a claim was open and the details for insurance as we cc our insurance agent

We also requested to be paid as we delivered per our contract in the same email
This seemed to resolve the issue very quickly and we got paid - no claim was open

 

[loaders]

If they haven’t filed an Intent to Claim and/or provided you with all the details and particulars, then there is no claim, they are just not paying their bill. Based on what you have related, this is simply a case of a delinquent payer. Perhaps a demand letter sent from a lawyer or paralegal might stir things up. As the carrier, you are obligated to investigate every claim, but you need to be provided with details to begin that investigation, and that responsibility rests with the party who has suffered the loss.

 

[LrgCar]

If they haven’t filed an Intent to Claim and/or provided you with all the details and particulars, then there is no claim, they are just not paying their bill. Based on what you have related, this is simply a case of a delinquent payer. Perhaps a demand letter sent from a lawyer or paralegal might stir things up. As the carrier, you are obligated to investigate every claim, but you need to be provided with details to begin that investigation, and that responsibility rests with the owner of the goods.

They have sent us a "notification of potential claim" but that was in July, however, no formal claim has been filed since, every time we ask them they are saying they are waiting on their customer to get back and provide a formal claim presentation, whatever that means. The load was for a decent amount so its not a couple hundred or a thousand dollars, it's like 6000 USD. Any paralegal or good transport lawyers out there?

 

[loaders]

Reach out to ScamChaser on this site. Excellent, experienced transportation paralegal. We have used him successfully on a few occasions.

 

[SBTri]

From my understanding even if there is a pending claim that has nothing to do with the transportation charges. Those still need to be paid. The claim would be separate from that.

 

[bchar]

Claims, Freight is 100% separate from a claim, our policy is the freight bill needs to be paid before we open a claim with the customer, then they need to provide us all the documents... We 100% pay the carrier unless the claim is resolved before 30days and must be agreeable with the carrier before we deduct money... As soon as the word claim is said we advise the carrier to get there ducks in a row... so there are no surprises or AR chasing money

 

[loaders]

The carrier is obligated to start a claims investigation once they are notified by the claimant and they receive the details of the claim. Payment of the freight bill has no bearing on the claims investigation. Payment of the freight bill is required before the claim can be settled.

 

[Jim L]

Hi Team,

We did a load for a US broker and delivered it all fine, however receiver noted under the wrap there were some scratches on their equipment which they agreed could have not been caused in transit as the freight was wrapped and no damage to wrap or shifting to the load. We sent paperwork and an invoice, and we received a notice of a pending claim, no problem these things happen and we have our proof. The invoice aged 30 days and our accounting followed up and we were advised payment was on hold due to the pending claim, we asked and were not given much details, the invoice is now 68 days old and there is still no formal claim from their client, what can we do to get our money?

Remember that 60 page carrier packet that they sent you and you signed the bottom of the last page? You agreed to all the terms and conditions. Almost all carrier packets are written to extremely favor the freight broker. I can almost guarantee you that there will be a section where you have agreed that the broker can hold all payments until any and all claims are settled, and they can hold funds to offset other claims or potential claims regarding any shipment hauled for the broker regardless of payment requirements due to a claim. Effectively they contracted that requirement out. Either their customer advised them about damage or the BOL had some notation on it where they will hold your funds until it is signed off by the freight owner. Extending that, they have 9 months to file a formal claim.
The real question; is this broker just doing their due diligence to ensure everything is ok? Or are they taking advantage of you by utilizing a situation to keep your money longer and not pay you out.

I recommend calling the broker and speaking to someone higher up to get a resolution date - either payment or a formal claim. Maybe just asking them that question will get you paid and the hassle is over. If not, and a formal claim is forwarded to you, it will give you the information you need to move forward. You can then contact the actual claimant and say that you have not been paid and the claim cannot move forward. Use the claimant to put pressure on the freight broker.