Prevent Cargo Theft and Concealed Damage Freight Claims

December 6, 2022

The biggest key to managing concealed damage freight claims and other claim types is to prevent them outright. You can also take measures to improve your chances of a successful concealed damage freight claim.

According to Packaging Digest, as much as 11% of shipments arriving at a distribution center have some level of case damage. This damage is often immediately obvious, and cargo owners can typically seek reimbursement for any freight damage loss.

Other times, concealed damage to a shipment may only be noticeable after the shipment has been opened and, more importantly, after the delivery receipt has already been signed. In these instances, proving responsibility for the damage and seeking reimbursement becomes much more difficult.

Likewise, cargo theft can often go unnoticed – especially when efforts are made to conceal missing packages. Theft claims can be equally difficult to prove after the fact.

Below, we’ll cover everything you need to know about concealed damage freight claims, including what they are, tips for preventing them, and what to do when they are unavoidable.

What Are Concealed Damage Freight Claims?

Concealed damage is defined as present but unnoticeable damage at the time of a shipment’s delivery.

This most commonly occurs when there is no visible damage to a shipment’s packaging, but there is damage to the products themselves. In this instance, the consignee is likely to discover damage once they have signed for the shipment and would thus need to file a concealed damage claim.

Unfortunately, concealed damage claims are notoriously hard to prove.

A consignee refusing to sign for a damaged shipment has all the leverage and all the proof they need to show that the damage occurred in transit. A consignee who discovers concealed damage to a shipment after the fact has neither of these things.

That’s why preventing the need for concealed damage claims is the best approach to managing their impact on your organization.

3 Tips to Prevent Concealed Damage Claims

1. Inspect Shipments Thoroughly

For reasons we’ve already covered, you are much more likely to be reimbursed if you note damages before you sign a delivery receipt. This makes it essential to inspect shipments to the best of your ability before signing them.

During this inspection, be sure to look for signs of damage, such as:

Rips in the shipment’s packaging.
Dents in boxes or box corners.
Moisture or signs of leaking.
Watermarks or stains.
Mildew damage.
Broken tape/seals or other evidence that a package has been opened.
Punctures in the shipment’s packaging.
Rattling in boxes.
Unauthorized double stacking.

These signs of damage should be immediately noticeable upon inspecting your shipment. Making a detailed note about the damages on the delivery receipt improves your odds of being reimbursed.

2. Make Sure the Shipment Isn’t Short

If you can, always count the number of packages upon delivery to ensure that it matches the number you expect to receive. If you cannot count the number of packages in the driver’s presence, count the number of pallets instead and sign only for that number.

Be sure to unwrap any pallets with signs of tampering, such as torn or cut stretch wrap, to ensure that no packages have been removed. If packages are missing, note how many packages you received on the delivery receipt and write “short” next to this number.

3. Consider Freight Insurance

Carriers have limited liability when it comes to damaged shipments. This is especially true for concealed damage freight claims where it is difficult to prove that the damage is the carrier’s fault.

Even if the carrier does accept responsibility, they are still likely to try and pay as little as possible. Third-party freight insurance, meanwhile, covers the total value of your shipment and does not require you to prove that the carrier is directly responsible for the shipment’s damage.

If you are concerned about not being fully reimbursed for a damaged freight shipment, freight insurance is a great option to consider.

What to Do When Concealed Freight Damage Occurs

If you encounter a need to file a concealed damage freight claim, here is the process that you should follow:

Report the damage to the carrier as soon as it is discovered. In most cases, you only have five days after a shipment’s arrival to file a concealed damage claim.
Thoroughly document all damage with photographs.
Follow up with the carrier via email to create a record of your request.
If the carrier wants to inspect the shipment, schedule the inspection as soon as possible.
If the carrier waives the inspection, keep a record that the inspection was waived.
Preserve all packing material and pallets until authorized by the carrier to dispose of them.

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Manage Theft and Concealed Damage Claims More Effectively with MercuryGate

Concealed damage freight claims are frequently a headache for beneficial cargo owners (BCOs). The proper precautions go a long way toward preventing damage. Following the right process for a concealed damage freight claim can improve your odds of reimbursement.

Download this infographic to see the savings you can realize with concealed damage claims management

To learn more about managing theft and concealed damage claims, download MercuryGate’s free ebook, The Guide to Concealed Damage Claims.