Trailer damaged by Receiver - Refusing to pay for repairs

[Michael Ludwig]

No, they cannot. Contract law.
It's exactly as you said ... you were contracted to move freight from point A to point B, ideally without damage to the freight, but damage to the freight is neither here nor there.
Property damage is a matter for the law. The police need to be called if an equitable solution cannot be immediately worked out at the scene of the incident. Without a police report of alleged property damage your insurer is under no obligation to pay on your behalf.
By and large "Fly-by-Night Brokers Inc." are not the brightest people you will run into in life, and generally they have absolutely no knowledge or understanding of rules, regulations, and laws governing either the operation of a commercial motor vehicle, or any motor vehicle for that matter (regardless of whether or not they have a driver's license and own their own car), or the movement of freight.

Let's use a different example ... You are the president and CEO of American Widgets Inc. You are at home for the afternoon. However, you need some documents from the office. You call the office and ask Mary Jane Secretary to grab the papers, jump in her car, and deliver the papers to your house, which she does. When MJ Secretary leaves your house she puts the car in drive instead of reverse and goes through your garage door. Do you;
a) call the police to do a report so you can get your garage door fixed and MJ Secretary can get her car fixed under MJ's insurance policy, or
b) withhold MJ Secretary's paycheck until some unknown entity fixes your garage door?
This is clearly a police report/insurance claim situation. Absolutely no different than a driver damaging a shipper or receiver's dock.
Even if your driver's do not know this, your dispatchers should, and should make decisions appropriately.
It's why you carry PL & PD insurance. For those that may have forgotten, PD stands for PUBLIC DAMAGE.

Damage to freight is neither here nor there;

Learn this. Understand this. Live by it.​

In a cargo claim a carrier is under no obligation to pay the claim if they have not been paid for the transit of the goods.
So, suppose you haul a load of very expensive widgets for a Fortune 500 company through a load broker. Your trailer leaks and all of these very expensive widgets are ruined beyond repair. You're facing a cargo claim of $1,000,000.00, and you only have coverage for $250,000.00. That means $750k is coming out of your pocket.
The receiver of the goods files a claim with you within the required time period, and follows the required rules. You have absolutely no defense so begrudgingly you agree to the claim and prepare to pay.
However "No-Brains Load Brokerage Inc." gets their nose into the situation and decrees they will not pay you for the transportation because you damaged the freight. What do you do?

KEEP YOUR F**KING MOUTH SHUT !!!!!!!!!!!!!​

Until you can show a paid-in-full invoice for the transportation of the goods, whether they are damaged or not, you are under no obligation to pay the damage claim. Every court in North America will support you on that decision. It does not matter that the customer has paid the broker. You, the carrier, have not been paid, and subsequently have no obligation to satisfy the claim.

So, me personally, I love brokers that put right in their contracts that in the event of a cargo claim they are going to withhold payment of your account. Thank you very much for contracting me out of having to pay cargo claims. You guys are the best (Just be aware to never get in too deep with these brokers.)

Guess who the customer goes after civilly once the claim has passed the statute of limitations ... LOL
You, the unpaid carrier, are under no obligation to willingly support the load broker in their pending law suit.

 

[loaders]

Michael, everything you said is correct and you carefully worded your opinion to include the words “pay” and “satisfy” when referencing the settlement of cargo claims. However, in my 30+ years of freight brokerage experience, I have heard many, many times from carriers, “ I am not doing anything with this claim until you pay the freight bill”. This position is incorrect. There is a distinct and very important difference between investigating the claim (which carriers are required to do), and settling the claim. A carrier cannot refuse to investigate a freight claim because the final freight bill has not been paid. In many, if not most cases, the original freight bill becomes part of the claim anyways. Freight claims are an unfortunate part of our industry. Handling them properly and professionally is just as important as preventing them, perhaps even more so.

 

[shayne]

Why cant people act in good faith??????

This 1500$ repair should have been covered by someone with half a brain and long term sense of business.

Load brokers are not the smartest at all. But the ones that are smart , make a killing.

I would have paid the 1500$ to fix your trailer.

Its so easy for a broker to add an extra 150$ on the next 10 loads to cover the kit repairs of 1500.00

Wow people are dummies.

 

[Freight Broker]

The load broker should have remained impartial, at a minimum. Offering an opinion when he/she wasn't on site to witness the incident served no purpose. Ideally the load broker would have offered help in facilitating the claims process..

 

[jonny-chicken]

The load broker should have remained impartial, at a minimum. Offering an opinion when he/she wasn't on site to witness the incident served no purpose. Ideally the load broker would have offered help in facilitating the claims process.. i.e. contacting the insurance agent and obtaining a claim number from the underwriter and following up with the carrier.

Indeed... that's all I expected from the broker...

Instead they attempted to obstruct us in any way they could, blame it on our driver, and discourage us from seeking reimbursement, even going so far as saying that if I sued they would just tie it up in the courts for years...

At that point I knew what I was really dealing with and after continually contacting the President of the receiver, we finally got satisfaction.

 

[Michael Ludwig]

“ I am not doing anything with this claim until you pay the freight bill”.

And those carriers are fools !!!
Claims cannot be ignored. I assumed that was self-evident. Serves me right for assuming.
They must be processed to the fullest extent possible. If you are processing one and you are stuck at 75% waiting for the customer, then that's as far as can you go. But, you don't need to hound the customer for the information from their end. Ask once, and leave the ball in their court.

 

[tasuinam]

And those carriers are fools !!!
Claims cannot be ignored. I assumed that was self-evident. Serves me right for assuming.
They must be processed to the fullest extent possible. If you are processing one and you are stuck at 75% waiting for the customer, then that's as far as can you go. But, you don't need to hound the customer for the information from their end. Ask once, and leave the ball in their court.

Yes - the customer with property damage DID NOT file a police report, claimed damage two days later and said had 4 witnesses - but when we asked for statements nothing.
We have insurance for a purpose and will file a claim...but need to know WHAT the claim is...

 

[Michael Ludwig]

I would be surprised if you insurance company paid it ... basically what you are saying to them is "Hey, this guy wants you to give him money.".
Pretty easy to guess what their answer will be.

 

[tasuinam]

May

I would be surprised if you insurance company paid it ... basically what you are saying to them is "Hey, this guy wants you to give him money.".
Pretty easy to guess what their answer will be.

be that is why the broker feels he needs to hold payment - well can always go to the customer direct.. let's see how this pans out...