A freight claim is defined as a formal request for monetary restitution for the loss or damage to a shipment made to a carrier by a shipper or consignee. They may also be referred to as “shipping claims,” “cargo claims,” “loss and damage claims,” or “transportation claims.”
In order for the carrier or consignee to feel as though the carrier has met their obligations under the terms of the Bill of Lading, the goal of a freight claim is for the carrier to make the necessary corrections. Claimants are therefore expected to do so in order to recover their costs, excluding profits, though there may occasionally be an exception.
Freight Liability vs. Freight Insurance
It is unfortunate that a carrier cannot obtain a typical freight insurance policy and be completely safe. To put it plainly, freight insurance does not provide protection from all losses for which a carrier may be held accountable under the Carmack Amendment or common law. A carrier’s certificate of insurance that attests to a particular amount of freight insurance does not, in itself, guarantee that your claim will be honored.
Due to these insurance considerations, it is essential that anyone in charge of shipping is aware of the extent of the carrier’s legal liability for freight loss as well as the coverage provided by the carrier’s insurance.
The Carmack Amendment, which established a uniform national standard of liability for freight loss and damage and was extended to motor carriers in 1935, serves as the cornerstone of freight liability. A carrier is responsible for all shipment loss, damage, and delay as long as the loss was not brought on by one of the five recognized carrier defenses—an act of God, an act of a public enemy, an act of the shipper, an act of a public authority, or the inherent nature or vice of the goods themselves. In the absence of any of these circumstances, the carrier is responsible for the actual loss or damage to the shipment.
Therefore, some form of limited liability coverage is included with every freight shipment that is scheduled. However, sometimes damage or loss is caused by shipper error rather than carrier error. The carrier is not liable for paying for repairs if the damage is the result of inadequate packaging, incorrect loading, or weather-related factors. This situation would benefit from additional freight insurance. Both the freight and the shipping costs related to that freight would be covered.
Types of Freight Claims
There are four different types of freight claims that can be filed against a carrier if it’s their fault.
1. Damage
The “damage” subcategory includes freight claims that are made most frequently, which, as the name implies, mean that the cargo is damaged when it reaches its destination. It must be clearly damaged upon arrival in order for it to fall into this category, and the damage must be noted on the proof of delivery.
2. Loss
Another typical freight claim is classified as a “loss.” This occurs when cargo is recorded as having been picked up at its origin but is never actually delivered to its destination. A legitimate original bill of lading and no official, signed proof of delivery can be used to demonstrate this.
3. Shortage
A shortage occurs when less freight than was anticipated and listed on the BOL arrives at the destination. Many different things can go wrong, one of which is that something falls off the original pallet. Due to this, it’s crucial to compare the pieces in a shipment that has been received to the delivery receipt provided by the carrier. Your freight claim will be much easier to file if it can be acknowledged and documented at the time of delivery, with the driver’s signature serving as verification.
4. Concealed damage or shortage
A freight claim for concealed damage or shortage is the most difficult to submit. That’s because these losses or damages are difficult to see when waiting for freight to arrive. Consignors frequently sign the proof of delivery, only to discover later that some of their freight is damaged or missing when they open the box or remove the shrink wrap.
Legal Briefing Cargo Claims in India
It is statutory for the High Court to have admiralty jurisdiction over contracts of affreightment and cargo claims. The aforementioned maritime claims are covered by Admiralty Act (2017) Sections 4(1)(d), (f), (g), (I), and (q).
Any claim relating to loss or damage resulting from the operation of a vessel, loss or damage to or in connection with any goods, agreement relating to the carriage of goods or passengers on board a vessel, whether contained in a charter party or otherwise, salvage services, including, if applicable, special compensation relating to salvage services in respect of a vessel that by itself or its cargo threatens damage to the environment, and salvage services in general are all subject to admiralty jurisdiction in the High Court.
The primary statutes governing maritime law in India with regard to the carriage of goods by sea are the Carriage of Goods by Sea Act, 1925, as amended in 1993, the Indian Bills of Lading Act, 1856, and the Multimodal Transportation of Goods Act, 1993.
The laws and statutes that are currently in effect under Indian law apply to goods loaded in India. There is a chance that the Contract Act of 1872, the Sale of Goods Act of 1930, the Indian Merchant Shipping Act of 1958, the Major Port Trusts Act of 1963, the Indian Ports Act of 1908, the Marine Insurance Act of 1963, and the Indian Ports Act of 1963 will all be applicable to cargo in India. The Major Port Trusts Act of 1963 and the Indian Ports Act of 1908 both deal with port administration and ship management. Various regulatory measures are included in the 1962 Customs Act. It also covers exports, taxes owed on purchases, and other restrictions, as well as the clearance of goods for domestic use.
In addition to these laws, Indian court decisions have established general maritime law principles for resolving cargo claims and other issues.
The Hague Rules of 1924 serve as the foundation for the Indian Carriage of Goods by Sea Act, 1925 (amended in 1993), also known as COGSA. It was developed to acknowledge and put into practice the Hague Rules of 1924 as they would be applied in India.
Claims Relating To Cargo In India
The maximum package value is 666.67 SDR per package or unit, or 2 SDR per kilogram of the gross weight of the lost or damaged goods, whichever is higher, in accordance with Indian law. If the claimant can demonstrate that the damage was caused by a carrier act or omission that was made recklessly with knowledge that damage would likely result or with the intent to cause damage, this package limitation defense will not be valid.
Some significant COGSA amendments and changes were brought about by the MTOG Act, including the following:
- The one-year window for filing a lawsuit over cargo claims may be extended by mutual agreement of the parties under this provision.
- In India, the upper limit has been increased to 666.67 SDRs per package or 2 SDRs per kilogram of the gross weight of the lost or damaged goods, whichever is higher.
- Both the ship and the carrier are ineligible to benefit from the package limitation under current Indian law. That is, if it can be demonstrated that the carrier engaged in behavior that caused damage intentionally, recklessly, or with knowledge that damage was likely to occur.
How do Jay Packers and Movers help with a freight claim?
Jay Packers and Movers is one of the most reputable packers and movers in Patna. They typically offer transit insurance to safeguard your goods, including priceless furniture, delicate electronics, and other goods, from harm. Please be aware that the terms and conditions may change, so thoroughly understand them beforehand.
Freight claim and Damage cover are a crucial and required part of your order when moving. By hiring a reputable packers and movers team such as Jay Packers and Movers with the appropriate packing supplies and moving know-how, you are lowering the likelihood of damages.
Even though the likelihood of damages and losses is very low, if it does occur, your damage cover policy will let you file a freight claim and pay for the costs of repair or replacement. For a small premium, you can get protection from losses and damages for your priceless household items.
Additionally, the small premium won’t significantly increase your overall cost. The costs of repairs and replacements may be high for you if there are any damages. If such an event takes place, damage cover will take care of the expenses.
Conclusion:
Thereby, to conclude, a freight claim is described as a legal request made to a carrier by a shipper or consignee for monetary compensation for the loss or damage to a shipment. They may also be known as loss and damage claims, shipping claims, cargo claims, or transportation claims.
As mentioned above, Jay Packers and Movers helps you with reimbursing your freight claim, which thereby makes your products much more safe and secure with them. Also, with this, they make sure that the damage is soon recovered.
