FREIGHT CLAIMS

QUESTIONS & ANSWERS

Common Misconceptions about

Freight Claims

MODERATOR

Wally C. Dammann, CCP Mitsui Sumitomo Marine Management (U.S.A.), Inc.

PANELISTS

Darryl Gash Kathleen C. Jeffries Dillard’s Scopelitis, Garvin, Light, Hanson & Feary, LLP

Paul J. Kozacky

Kozacky Weitzel McGrath, PC

David Nordt, CCP Brent Wm. Primus, J.D. The Gilbert Company Primus Law Office, P.A.

A clean bill of lading is proof that the goods were fine

when the carrier received them.

A clear delivery is proof that the goods were still in

good condition when delivered.

Clean Bill of Lading

Clean bill at origin only establishes a presumption that

the goods were tendered to carrier without damage

Clear delivery receipt only establishes a presumption

that the goods were received by consignee without

damage

Not definitive proof - presumption is rebuttable

Carrier may overcome clean bill with proof of

damage at origin

Claimant may overcome clear delivery receipt with

proof of damage at delivery

Clean Bill of Lading

Freight Charge/Freight Claim Offset

vs.

Carrier: Shipper has to pay freight charges first

before we’ll consider a claim on the shipment.

Shipper: We have a right to offset the claim amount

against freight charges owed.

Must freight charges be paid as prerequisite to claim-

filing?

Only if an agreement between carrier and shipper or carrier’s

rules impose that obligation

The law does not

May shipper offset the claim amount against charges

due?

A valid claim may be used as offset, but you may run into

problems

And vice versa (carrier can deduct approved claim amount

from charges due)

Freight Charge/Freight Claim Offset

Under new food and drug rules, carriers have to pay

claims in full if shipper’s instructions not followed -

even without visible damage.

Food and Drug Claims

FSMA

The gist of the FSMA regulations is that shippers and

brokers must provide carriers with written instructions

for certain specified types of food-related products

The comments to the final rule clarify that a carrier’s

failure to follow the instructions does NOT mean that

the transported products are “automatically” deemed

unsafe and/or a total loss for cargo claim purposes

Food and Drug Claims

The carrier is automatically off the hook if loss or

damage occurs because of an Act of God or one of the

other accepted defenses.

Bill of Lading Defenses

Bill of Lading Defenses

Carrier must establish that loss or damage occurred

because of

An act of God

An act of the public enemy

An act of public authority

The acts or default of the shipper itself (improper packing

or loading) or

The inherent vice or nature of the goods

And that the carrier was free from negligence

But, new NMFC bill of lading changes burden

Claimant must prove carrier’s negligence

If carrier is not notified of shortage or damage within

15 days of delivery, shipper or consignee is barred

from later filing a claim.

Concealed Damage

Concealed Damage

NMFC previously provided 15 days for notice of

concealed damage

In 2015, notice period was shortened to five days

Nevertheless, failure to submit notice of damage within

five days does not act as a bar to later filing a claim

Consequence of missing five-day notice deadline is

loss of presumption of damage in transit

NOTE: Only NMFTA members permitted to use NFMC

Carrier must

pay for full

shipment if any

part is lost or

damaged.

Duty to Mitigate

Duty to Mitigate

Claimant may only recover for actual loss or damage

Must salvage whatever is salvageable for reasonable

price

Claim is good only for portion of shipment lost or

damaged

If damaged portion can be replaced

Or remainder of shipment can be sold/used

More questions?

Thank you.