Freight Claim Documentation & Concealed Damage Reporting
This policy establishes mandatory procedures for documenting, reporting, and recovering financial losses from freight damage, shortage, and concealed damage across all inbound and outbound shipments. Non-compliance results in direct chargebacks to the responsible department.
This policy governs the end-to-end process for identifying, documenting, and recovering freight claims arising from visible damage, shortage, concealed damage, and carrier negligence. Every inbound receipt and outbound shipment must be inspected at the point of delivery or loading. Failure to document damage within the carrier's prescribed window voids all recovery rights. This policy assigns clear liability for missed inspection windows, incomplete paperwork, and untimely filing. All claims exceeding $500 require documented photographic evidence and a signed carrier inspection report. Concealed damage discovered after the driver has left must be reported within 48 hours and must include unopened original packaging photographs. The Procurement department maintains the master claim log and tracks recovery rates by carrier quarterly.
This policy applies to all shipments — inbound raw materials, finished goods, MRO supplies, and drop-ship customer orders — received at or dispatched from any corporate facility, warehouse, or third-party logistics provider. It covers all carrier modes including LTL, FTL, parcel, air freight, and intermodal rail. All receiving clerks, warehouse leads, procurement officers, logistics coordinators, and accounts payable staff who handle bills of lading, packing slips, or delivery receipts must comply. Third-party warehouses handling inventory on our behalf must adopt equivalent procedures as a condition of their service agreement. This policy does not apply to small parcel shipments valued under $100 where the cost of filing exceeds the claim value; those losses are expensed to the receiving department's shrinkage account.
- Mandatory Inspection at Receipt: Every shipment must be inspected before the driver departs. Note all visible damage, crushed packaging, torn strapping, or water stains on the delivery receipt and take dated photographs. Do not sign "clear" or "except as noted" without verifying every visible indication of potential concealed damage.
- 48-Hour Concealed Damage Window: Concealed damage discovered after the driver has left must be reported to the carrier in writing within 48 calendar hours of delivery. Retain all original packaging, dunnage, and strapping exactly as found. Photograph the unopened carton from all six sides before opening.
- Complete Claim Dossier Required: Every claim over $500 must include: (a) signed delivery receipt with exceptions noted, (b) minimum 4 clear photographs showing damage, packaging, and lot/serial numbers, (c) original invoice or PO showing item value, (d) carrier's inspection report if obtained, (e) the original Bill of Lading. Incomplete dossiers will be rejected and the cost charged to the responsible employee's cost centre.
- Carrier Liability Recovery Targets: Procurement must track recovery rates per carrier monthly. Any carrier with a claims settlement rate below 85% over a rolling 6-month period must be flagged for performance review. Damages under $150 may be written off at the discretion of the Logistics Manager to avoid administrative overhead exceeding claim value.
- Quarterly Audit of Open Claims: The Procurement Manager must review all open claims older than 45 days and escalate overdue carriers to senior management. Any claim unresolved after 90 days must be referred to legal counsel for potential subrogation or small claims action.
- Receiving Clerk / Warehouse Lead: Conduct visual inspection of all inbound shipments before signing delivery receipt. Note all exceptions in writing and photograph any damage. Report concealed damage within 48 hours and retain all packaging. Forward all documentation to Procurement within 24 hours of discovery.
- Logistics Coordinator: File formal written claim with carrier within required timeframes. Maintain the master claim log with status, dollar value, carrier, and ageing. Coordinate carrier inspections for concealed damage claims over $1,000. Escalate any claim older than 30 days.
- Procurement Manager: Review and approve all claims over $2,500. Track carrier recovery performance quarterly. Approve write-offs under $150. Escalate unresolved claims over 90 days to legal. Report recovery metrics to the Finance Committee each quarter.
- Accounts Payable: Hold payment on any invoice tied to an open freight claim until the claim is resolved or formally written off. Recover chargebacks from carriers via debit memo or deduction within 15 days of settlement.
- Shipping Coordinator (Outbound): Photograph all outbound shipments at time of loading — showing packaging condition, labels, and interior blocking/bracing. Retain loading photographs for 90 days. Provide photographs to the carrier immediately upon request for any transit damage dispute.