This week our guest blog is from Expeditors Cargo Insurance Brokers (ECIB). ECIB provides supply chain risk management solutions tailored to the specific needs of their clients. Through their background in logistics and hands-on approach to claim subrogation provide access to lower rates and broader coverage. ECIB is a wholly owned subsidiary of Expeditors International of Washington, Inc. They are headquartered in Seattle, Washington, with employees located throughout the U.S., Mexico, Europe, Australia, and the Middle East.
At some point, almost every organization that ships a product will experience loss or damage in the supply chain. These scenarios can be stressful, confusing, and time consuming.
Often these losses can have enterprise-wide effects, which is why speed and accuracy of the actions immediately following the loss can dictate the difference between a claim getting paid or not getting paid, and how quickly.
One critical step in the process is transmission of vital shipping documents to the freight carrier. These documents will serve as evidence that will allow claims staff to quickly and accurately resolve a claim, and greatly increase the cargo owner’s chances of recovering the amount for which the carrier is liable.
The following are five documents every shipper should be prepared to provide when submitting a formal cargo claim are as follows:
- Transportation Documents: These documents contain the core details of the movement of the goods, such as the shipper and carrier information, commodity shipped, quantity, and shipping terms. These documents will most often be one of the following:
- Bill of lading
- Airway bill of lading
- Ocean bill of lading
- Truck bill
- Delivery Documentation: These documents are used to show proof of delivery to the final recipient - the consignee. The consignee will sign or stamp the document to show that the goods were received and in the expected condition. If the received freight is damaged, short/missing, or otherwise not in line with the shipper’s obligation, the receiver of the goods should state as much on the delivery document. If not properly noted, it could jeopardize the ability to recover the dollar amount the carrier is legally liable to pay. Delivery documents may include the following:
- Signed delivery receipt (POD)
- Drop trailer receipt
- Receiving sheet
- Statement of Claim: The purpose of the statement of claim is to clearly define the details of the loss, including the commodity damaged, the extent of damage, and the value of the damage. This statement should include the following information:
- Itemization of the claim
- Explanation of the claim circumstances
- Value Verification: This serves as supporting evidence of the value of the damaged or lost goods. Information provided may include:
- Commercial invoice
- Sales contract/bill of sale
- Screenshot of internal accounting page, if no invoice
- Photos: If goods are damaged in transit, whether partially or in total, the freight carrier will likely require photos of the damaged product. When taking the photos, it is helpful to get close-up shots of the damage, as well as photos from a distance.
In addition to the above more common documents, the following information may be requested and should be made available to help expedite the claims process:
- Quality Assessment Report: This may be required for highly technical products such as electronics, pharmaceuticals, medical equipment.
- Temperature Monitoring Report: If the product is temperature sensitive, a report of the historical temperature variances inside the conveyance may be required to prove there was an excursion leading to damaged/spoiled product.
- Police Report or Accident Report: A police or accident report will provide supporting evidence that an accident occurred that lead to the damage of the goods in transit.
- Repair Quote: In order to accurately value the cost of repairs needed to return the damaged property to good working order, a repair quote may be requested.
- Proof of Disposal: If the goods damaged are determined to be a partial or total loss, the insurer may request a disposal report, which will serve as proof that the goods were not salvaged in any way.
Note that this is not a full list. Additional documents could be requested depending on the specific circumstances of the claim.
We understand that dealing with cargo claims can be overwhelming, but it does not have to be. Contact us today to learn how we can help tailor a solution that will deliver increased operational efficiency to your global organization while maximizing recovery of carrier legal liability, and arming you with actionable data that gives you the power to make informed supply chain decisions in real time.
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