Easy Guide How to handle cargo claims

1. Seven easy steps to successfully settle claims with liable parties:

Often, when faced with a potential cargo claim, shippers and consignees feel daunted… With this guide, we simplify the claim process in seven easy steps!

1. Notify your insurer, if cargo is insured only.
2. Notify the shipping line within 3 days of taking delivery of your container.
3. Engage a surveyor for major damage extent or high value cargo.
4. Mitigate cargo loss.
5. Collect documents.
6. Submit your cargo claim.
7. Protect against time bar.
8. 1Notify your insurer

If your cargo is insured you should notify your insurer immediately when damage is discovered. They will advise you on how to proceed in order to comply with the procedures required in order to protect your insurance cover.

2. Notify the shipping line

It is extremely important to ensure you notify the shipping line within 3 days of delivery. The shipping line may also engage its own surveyor for joint inspection purposes. Your written notification should include the following details:

1. Bill of Lading number
2. Container number
3. Cargo description
4. Nature or cause of loss or damage
5. Approximate value of loss of damage

3. Engage a surveyor

It is not a “must” to engage a surveyor, however, for high-value cargo or large loss or damage extent, it is probably worth doing so. Surveyors may also provide guidance regarding loss mitigation.

It is important to only start to offload cargo from the container during the survey process. Do not unstuff the container until your appointed surveyor is in attendance so they can document stowage, dunnage, bracing, damage pattern, etc.

We recommend holding a joint inspection with your appointed surveyor as well as a surveyor from the shipping line in attendance, thus the reason that notifying the shipping line and requesting a joint survey is so important.

If damage extent is not excessive, suffice to take pictures, evidencing damage extent and damaged container with the smartphone. Short video recording showing a holed or damaged container at the time of destuffing is very powerful evidence supporting a claim.

4. Mitigate cargo loss

By law, cargo receivers must mitigate cargo loss. Mitigation measures include, but are not limited to the following:

Separating rotten/spoiled cargo from fresh cargo

Repairing damaged cargo

Curing damaged cargo

Re-bagging/repackaging damaged bags/packages, etc

Selling products not fit for human consumption for animal feed

If cargo cannot be resold at a lower value, a destruction certificate will be required to prove the complete loss of cargo.

5. Collect documents

Documents required for ALL claims: 

• Bill of lading
• Commercial invoice
• Packing list
• Letter of assignment/subrogation rights
• Import/export documentation (shipping docs)
• Photographs evidencing extent of damage/loss of cargo
• Photographs of container evidencing cause of damage/loss of cargo
• Notification to shipping line (letter and email)
• Claim value (breakdown of the claim amount)

Documents required when available/applicable for claims: 

• Survey report
• Salvage invoice
• Destruction certificate
• Fumigation certificate
• Laboratory test results/report

6. Submit your cargo claim

A formal claim letter should be submitted on your company letterhead, with the above-mentioned list of documents attached. It is important to thoroughly check the list of documents required for the claim process before sending your claim to the shipping line, this will save you time and assist the shipping line to bring your claim to a prompt resolution.

7. Protect Your claim against the time bar

Most Bills of Lading are subject to a one-year time bar. This means that if your claim has not been concluded within one year from the date of delivery, the shipping line has a right to close the file and not compensate you for your lost or damaged cargo.

In order to protect a time bar, court proceedings must have been initiated before the time bar date, or an extension of time be granted by the shipping line in writing following a written request from you.

Don’t just assume that if you suffered cargo loss or damage you will be paid. The truth is, only if you follow these steps, winning cargo claims will be much easier for your team.