All parties involved in a shipment are obligated by law to help mitigate a potential damage claim. “Freight Claims in Plain English” by William J. Augello and George Carl Pezold states, “The shipper has a general duty to mitigate its damage and the expenses incurred in mitigation are properly recoverable.” In Saul Sorkin’s “Goods In Transit” it reads “Both the shipper and consignee have a duty to mitigate the carrier’s damages where they are able to do so. ... The criterion for determining the adequacy of attempts to mitigate damages is reasonableness.”

The claimant should exhaust all mitigation attempts before the claim is filed. As an example, if a claim is the result of the shipment being received “wet or stained,” the cost of replacement should be compared with the cost of repair and refurbishing. The lower cost alternative meets the mitigation requirement.

If the damage goods are in such a state that they cannot be used, in an attempt to mitigate the claim, it is the duty of the shipper or consignee to retain the merchandise and shipping con-tainer(s) until the carrier desires to take possession of the merchandise as salvage. The claimant should provide the carrier with written notice that they can pick up the damaged goods.

However, the carrier is under no obligation to pick up the dam-

 

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aged goods until their liability has been accepted.

It is important that the claimant retains the damaged goods until the claim is resolved. Failure to retain the merchandise will directly affect a claimant’s ability to recover their loss. When a carrier issues settlement on a claim, they are, in essence, purchasing the damaged product.

As mentioned earlier, the claimant has nine months from date of delivery to file a claim. The carrier has 30 days to acknowledge receipt of the claim and to assign a claim number. The carrier has 120 days to give disposition of the claim to the claimant. The claimant has 2 years and one day from date of the first declination, by the carrier, to file its lawsuit.

Loss and damage claims will occur during the course of business. If you establish processes and procedures for managing them when they occur you can effectively minimize your claim. You should also understand carriers attempt to make the aforementioned claims process far more restrictive in their individual rules tariffs.

Dixon is vice president of transportation for TBB Global

Logistics, a 3PL based in New Freedom, Pa. He may be contacted at 717-227-5522 or tdixon@tbbgl.com.

 

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