In the world of being a shipper, consignee, or freight carrier accidents and losses sometimes happen. But, this is why you know the ins and outs of filing a freight claim, and maybe even purchased insurance, right? The time it takes, who is responsible, and the paperwork and information you need for filing a freight claim are all essential when trouble happens with one of your shipment.
How long do you have to file a freight claim? The law regarding the loss or damage of goods by a carrier is known as the Carmack Amendment and requires the claim request to be filed within nine months. Freight claims are generally filed by, or on behalf of the shipper.
The Carmack Amendment states that the carrier is responsible for freight loss or damage unless the accident fits into one of five categories: Act of God, the act of terror or war, default of shipper, public authority, and the inherent vice or nature of goods being shipped. Keep reading to learn more.
What Is The Carmack Amendment?
The Carmack Amendment is the rules and regulations about who can file a freight claim and why. It was passed into law in 1935, and it draws lines and distinctions between who is liable for loss and damage of shipped goods. The loss or damage of freight that is being shipped is the fault of the carrier. It is the fault of the carrier even without proof of negligence. The carrier will carry the responsibility unless the carrier can prove it was not negligent or can prove one of the five exceptions to the Carmack Agreement.
What Are a Shippers Responsibilities Under The Carmack Agreement?
The shipper is protected under the Carmack Amendment. However, they still need to provide evidence of due diligence on their part to win the claim in their favor. The shipper needs to prove if the carrier was liable for the damage or loss of goods. They need to show these three things:
#1: The Goods Were Not Damaged When Picked Up By The Carrier
The proof of negligence on the part of the carrier can be shown by keeping track of intact orders of goods being shipped out. This is done by note-taking on the part of the shipper and verified by the carrier. This is a legal document of business transactions and is kept for just this reason.
#2: The Goods Were Damaged When Delivered, Or They Weren’t Delivered At All
Again, this is proven by the check and balance of an itinerary sheet. Documentation at the destination should be signed and dated by both carriers and shippers.
#3: The List Of Goods Shipped
The list of goods that the carrier is transporting will be created by the shipping company and signed off by the carrier.
What Are The Exceptions To The Carmack Amendment?
If all of these things are met and found by the shipping company when they file the freight claim, the carrier is liable for the damages or loss of the cargo during the shipment. However, some exceptions exist that will not make the carrier responsible for the loss of injuries of the load. These five exceptions are an act of God, the act of terror or war, default of shipper, public authority, and the inherent vice or nature of goods being shipped.
Act of God
An act of God includes severe weather events, plagues, physical anomalies that cause destruction, death, or loss. These can be proven by eye witness account. However, they are not able to be used if the event was predicted and could have been avoided.
Act of Terror or War
If enemies of the United States of America, such as a country we are at war with or a terrorist group against the US, destroy or stall the shipment of goods, the carrier shall not be responsible for the loss or damage. The only thing that would not be included in this category is if the loss or damage is caused by organized crime. This was seen played out in the 1930s and 1940s as a scheme by organized crime to get freight insurance money for goods they had not lost.
Default of the Shipper
If the shipper has been negligent or is unorganized in some way, the fault of the loss or damage may be placed on the shipper. The shipper is liable for loss or damage if there are things like not enough packaging to protect the contents or if items that are being shipped are mislabeled and thus damaged because of mishandling. These things are not the fault of the carrier, and the carrier can not be held liable for the loss or damage if it is the fault of the shipper.
If the government or other parts of public authority indirectly cause damage or loss of cargo, this is not the fault of the carrier. This can be seen by things like road closures or pandemic stay at home orders. The Carrier will not be held liable for items that cause loss or damage of goods being transported if it is because of an action by the public authority or the United States government.
The Inherent Vice or Nature of Goods Being Shipped
Some products that are being shipped are inherently unstable. This is especially true with goods that are sent in temperature-controlled environments and for long distances. Some loss of goods is approved of, and the carrier is not liable for this reasonable amount of damage for the inherent fragility or nature of the products that they are carrying.
Freight claims can be made by the shipper when the goods that they shipped with a carrier are lost, damaged, destroyed, or never show up. The application is useful if the shipper can prove that the goods were not damaged when picked up, that they did, in fact, show up damaged or never did show up, and they have a list of the goods shipped. The carrier is held liable, and the shipper protected under the 1935 Carmack Amendment.
The carrier, however, is protected under the exceptions of the Carmack Amendment for five situations that could occur: an Act of God, an act of terror or war, default of shipper, public authority, and the inherent vice or nature of goods being shipped. It is only if the carrier can prove one of these things that they will not be held liable for the loss or damage of the goods they agreed to transport for the shipper.
The shipper only has nine months to file the freight claim before it becomes invalid and too late for claims processing.