Cargo claims: a guide for carriers

The Carmack Amendment in plain words

The Carmack Amendment is the federal law on cargo loss and damage for interstate motor carriers. It's in 49 U.S.C. 14706. The main points for a carrier:

• You must issue a receipt or bill of lading for freight you accept. Not issuing one doesn't get you out of liability.
• You're liable for the actual loss or injury to the property. Both the receiving carrier and the delivering carrier can be held liable to the person entitled to recover under the bill of lading.
• Limits on liability need an agreement. A carrier can set rates that limit its liability to a value the shipper declares in writing or electronically, or that the carrier and shipper agree to in writing, if that value is reasonable under the circumstances. Household goods follow separate rules.
• The carrier that paid can recover from the carrier at fault. If you pay a claim for damage that happened on another carrier's part of the trip, the law lets you recover it from that carrier.
• Where you can be sued. The claimant can sue in federal or state court.

This page is general information, not legal advice. If a claim is large or a lawsuit is threatened, talk to a transportation attorney and your insurance company.

The deadlines on both sides

Federal law sets minimum time limits for the claimant and response deadlines for the carrier. Your bill of lading or contract can give the claimant more time, but not less.

Two details matter. A settlement offer is not a denial unless the carrier says in writing which part is disallowed and why. And a letter from your insurer only counts as a denial if it says so in writing, gives the reason, and says the insurer is acting for the carrier.

What 49 CFR Part 370 requires

Part 370 sets how carriers handle loss and damage claims. A valid claim is a written communication, filed with the right carrier on time, that does three things (49 CFR 370.3):

• Gives facts enough to identify the shipment.
• Says the carrier is liable for the loss, damage, injury or delay.
• Asks for a specific or determinable amount of money.

What is not a claim on its own: a damage or shortage note on the delivery receipt or freight bill, a bad order report, or an inspection report, even if it shows a dollar amount. For an uncertain amount like "$100 more or less," the carrier should check the freight's condition but should not pay until a written claim with a specific amount comes in.

What the carrier must do once a claim arrives:

• Open a separate file, give it a claim number, and record the date received (370.5).
• Tell the claimant in the acknowledgment what other documents it needs.
• Investigate promptly. When needed, the claim should be backed by the bill of lading, proof of freight charges, and the invoice or a certified copy showing value (370.7).
• If a whole shipment or package is claimed lost and that can't be confirmed, get a certified statement from the consignee that it wasn't received from any other source.

How to prevent claims at pickup and on the road

You can't fight a claim with memories. You fight it with records made at the time. Build these habits into every load:

• Seal numbers. If the shipper seals the trailer, write the seal number on the BOL before you leave. At delivery, let the receiver see the seal intact and cut it. If you have to break a seal for an inspection, write down why, who was there and the new seal number.
• Count and condition. Count the pieces or pallets when you can. If you couldn't watch loading, ask for "shipper load and count" on the BOL.
• Exceptions on the BOL. If something looks wrong at pickup, like crushed boxes, leaning pallets, wet product or a count that doesn't match, write it on the BOL before you sign and get the shipper's initials.
• Photos. Take date-stamped photos of the freight after loading, the seal, the doors closed, and again before the doors open at delivery.
• Load securement. Shifted freight is a common cause of damage. Follow the federal tiedown and blocking rules in our cargo securement guide.
• Keep it all. Save the BOL, photos, reefer download and your messages with the broker together with the load file.

Reefer loads: temps and pulp readings

Temperature claims are some of the biggest. Protect yourself on every refrigerated load:

• Check the set point against the paperwork. The temperature on the BOL, the rate con and the reefer unit should match. If they don't, get it fixed in writing before you leave.
• Continuous or cycle. Confirm which mode the shipper wants and write it down.
• Pre-cool. Under the FDA sanitary transportation rule (21 CFR 1.908), when a carrier has agreed in writing to be responsible for sanitary conditions, it must pre-cool the trailer as the shipper specifies before loading food that needs temperature control.
• Pulp readings. Where the shipper allows it, take a pulp temperature reading of the product at loading and write it on the BOL. It shows whether the product went on warm, which is not something the reefer can fix.
• Keep the download. The same FDA rule says that, if the shipper or receiver asks, a carrier with that written agreement must show it kept the shipper's operating temperature. Temperature readings at loading and unloading or time and temperature data from the trip can do that. Download the unit after every load.

Damage or shortage at delivery: what to do

1. Stop and document before anything moves. Photos of the seal, the doors opening, the freight in place and each damaged piece.
2. Call your dispatcher or the broker right away, before you leave the dock. Get any instructions in writing.
3. Make the notes on the delivery receipt specific. "2 pallets crushed corner, 14 cases damaged" is useful. "Damaged" alone is not. Make sure the count on the receipt is right before you sign.
4. If the receiver refuses all or part of the load, don't just drive off with it or dump it. Get the refusal in writing and wait for instructions. Under 49 CFR 370.11, refused damaged freight must be sold or disposed of after notice to the owner and others with an interest, in a way that fairly protects everyone, with an itemized record and a lot number tied to the shipment.
5. Keep the salvage. Money recovered from salvage goes on the claim file and to the people entitled to it. It lowers the claim amount.

Remember that the receiver's note on the delivery receipt is not a claim by itself (49 CFR 370.3). The 30-day and 120-day clocks start when a proper written claim arrives.

Where cargo insurance fits

Carmack liability is yours whether or not you have insurance. Cargo insurance is how you pay for it.

• What FMCSA requires. For general freight, the federal filing you must keep on file is public liability (49 CFR 387.301T and 387.303T). A cargo insurance filing is only required for household goods carriers.
• What brokers and shippers ask for. Many still require cargo coverage in their carrier packet and set their own minimum limit. Check it before you book.
• Read the exclusions. Ask your agent which commodities, theft situations and reefer breakdowns your policy covers and which it leaves out. Know your deductible and limit per load.
• Tell your insurer early. Report a possible claim as soon as you know about it, and send copies of everything.

See our trucking insurance guide for how cargo coverage fits with your other policies.

Rate con clauses that shift liability

The rate confirmation and the broker-carrier agreement can change how much risk you carry. Read them before you accept, and watch for clauses like these:

• Full value liability. Language that makes you liable for the full invoice or replacement value of the freight, with no cap. Compare that number to your cargo limit.
• Extra charges added to the claim. Freight charges, inspection costs, disposal costs or the broker's own fees passed to you.
• Deductions from your pay. A right to hold or offset your freight payment while a claim is open, sometimes on other loads too.
• Reefer terms. Rules on continuous mode, required temperature records or download intervals that you'll be held to.
• Shorter notice windows for you to report damage to the broker.
• Indemnity clauses that make you cover the broker's or shipper's losses and legal costs.

If a clause is unclear, ask for it in writing or ask to change it before you haul. Our rate confirmation guide walks through the rest of the document.

Questions carriers ask