The National Motor Freight Traffic Association (NMFTA) has recently announced that it has updated the policy regarding filing concealed damage claims for LTL (less-than-truckload) shipments. This will have a significant impact on the shipping and logistics industry, as well as your business, if you ship LTL freight.

What is the big change?

The time to report concealed damages claims to an LTL carrier has been reduced from 15 days to only five. This means that consignees now have five days from delivery to notify the carrier if damages are found after the driver has left the receiver.

What are concealed damages?

Concealed damages are those that are unnoticeable at first glance by the consignee and found after the freight has been signed for. Examples of this could be a shipment of barbeque sauce with a leaking box in the middle of the pallet, or a box that was accepted, but later found to have a damaged interior product.

Concealed damages tend to be more common in LTL shipments. With less freight on the trailer, as is common with LTL, pallets have more room to shift and slide.

When will the change be effective?

The five day reporting time for concealed damage claims went into effect on April 18, 2015.

What are the pros and cons?

Like any major amendments to policies, there are both positive and negative effects of the concealed damage claims policy change.

As for positives, it’s important to note that days of letting potential claims linger are largely eliminated. With over two weeks of time passing from delivery with the old policy, receivers had quite a bit of time to let damages go unnoticed, and finding out about damaged product last minute is bad news for any supply chain. This could also be alarming for carriers who were unaware of the damages until a claim was made 15 days after the fact. Having only a few days to file a claim means receivers will be more on top of their incoming freight, which should catch any possible damages early and reduce the number of concealed damages claims.

On the other hand, this new change could leave receivers scrambling to sort cargo in a short amount of time. This could put stress on warehouses and docks, as more manpower may be needed to unload and check the loads for damages. This also may cause problems for smaller receivers who may not have the resources to file paperwork and contact carriers, as well as unload shipments, within the five day period.

How will this impact my business?

If your business receives LTL freight with concealed damages, and you do not report it to the carrier within five days, the process of filing a freight claim becomes much more complicated for the consignee.

However, just as the old policy left room for exceptions, so does the new five day policy. In the case of a claim being filed after five days, legitimate proof and documentation will be needed to file these claims and these will be left to the discretion of the LTL carrier.

What can I do to minimize potential impacts of the policy change?

The number one thing you can do to prepare for the change in policy is to ensure that all consignees and receivers are educated on the change. Those receiving shipments need to be even quicker and particularly diligent about inspecting deliveries and reporting to the carriers in order to have the best chance of a positive outcome if damages are found.

Also, taking the proper actions when concealed damage is found can minimize your chances of losing money. When you discover concealed damage, avoid moving the shipment from its original delivery location, take digital photos of the damage, and reach out to your third party logistics company or carrier representative immediately.

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