Cargo claims and liability
A cargo claim is a demand for payment for freight that was lost, damaged or delayed. The rate con matters in two ways: how much the load is worth compared with your cargo insurance, and whether the broker can take a claim out of your pay.
The federal claims process
Federal rules set a minimum process for claims against motor carriers for loss, damage, injury or delay to cargo:
- A claim must be in writing, identify the shipment, assert liability and ask for a specific or determinable amount of money. Notes of shortage or damage on a delivery receipt, inspection reports and similar documents, standing alone, are not a claim (49 CFR 370.3).
- The carrier must acknowledge a proper claim in writing within 30 days of receiving it, unless it pays or declines it within that time, and must open a claim file (49 CFR 370.5).
- The carrier must pay, decline or make a firm compromise offer in writing within 120 days; if it can't, it must send a written status update then and every 60 days after (49 CFR 370.9).
These rules describe how claims against carriers are processed. They don't decide who is liable, and the time limits for filing come from the bill of lading or contract.
Cargo value and your insurance
Some rate cons state a cargo value. If it's higher than your cargo policy's limit, a total loss could leave you paying the difference. Federal minimum insurance rules cover public liability (for example $750,000 for for-hire carriers of non-hazardous property in vehicles of 10,001 lbs or more, 49 CFR 387.9); cargo coverage is a separate policy with its own limit and exclusions. Check the commodity against your policy's exclusions too.
Claims taken from freight pay
The riskiest clause lets the broker deduct a claim from your freight charges, sometimes before the claim is proven or before your insurer has looked at it. When combined with setoff language, the deduction can come from pay on other loads.
What the Rate Con Checker flags
- "Claim" within a short distance of "deduct", "withhold", "offset" or "from freight": red flag.
- Otherwise, a stated cargo value over $100,000: flag, reminding you to check your cargo insurance covers it.
- Neither: OK.
What to ask for
Please remove language allowing claims to be deducted from freight charges.
At pickup, note the seal number, count and condition on the BOL; at delivery, get any exceptions written specifically. Photos of the load, the seal and (for reefers) the temperature display are the evidence that answers most claims.