Port congestion is leading to shipping delays becoming the norm. After what seems like an eternity, you receive your cargo. And, as Murphy’s law would have it, whatever can go wrong, does go wrong. You realize on the spot that your long-awaited consignment has been damaged in transit.
You have to react swiftly. In the event of a loss or damage to commodities that may involve a claim under your insurance policy, it’s all about being in the right place at the right time. There are a number of key steps you should take to ensure your claim will be processed correctly.
So, if you’re wondering…
How to go about a cargo claim?
On receipt of a shipment, inspect your consignment before signing any proof of delivery (B/L):
- Verify whether the number of packages matches the number stated on the B/L.
- Inspect the goods carefully.
- If possible, take pictures of the cargo while still in the container as evidence of its damaged condition.
⚠️ Write any remarks as to the goods being damaged or missing on the delivery receipt. Don’t forget to record any exceptions encountered both on the carrier’s and on the recipient’s copy.
After the first inspection, you must let the shipper know that something went wrong with your cargo by filing a provisional claim. If more than one carrier is involved, a notice of damage or loss must be filed against each one.
What's the time limit to serve a provisional notice of claim?
The Hague-Visby Rules establish two different scenarios:
1. Upon receipt of goods.
If the loss or damage is visible at once, a written notice of loss must be provided to the carrier or carrier’s agent at the port of discharge when the goods are delivered.
Imagine that a vessel carrying perishable cargo is significantly delayed at the transshipment port. This delay will cause damages to the goods, which may be worth nothing by the time they reach their destination.
In this kind of situation, a written notice of damage should be sent to the carrier on the spot.
2. Within 72 hours after discovering potential loss or damage.
If the loss or damage isn’t apparent, you’ll need more time to inspect the consignment thoroughly in order to ascertain its condition. That’s all fine and well. However, take into account you only have 3 days from discharge of goods to file your provisional claim for concealed damage or loss.
By way of example, this deadline would apply to cargo that is only found to be damaged after opening the container doors at the warehouse, i.e., once it has been taken in custody.
These time limits apply unless the goods undergo a joint survey or inspection at the time of receipt. In that case, it wouldn’t be necessary to provide a notice in writing.
Which role does a provisional claim play in the claims handling process?
Filing an initial notice of claim timely is essential, as it raises a presumption of carrier liability. In the absence of such a preliminary claim, it is assumed that the goods were delivered in good order and condition. If the consignee intends to claim at a later stage, they will have to overcome the burden by proving that the damage occurred before delivery.
Another key aspect is the time limit established by Article III Rule 6 of the Hague Rules:
«In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.»
In other words, suits against the carrier are time-barred, unless proceedings started within one year of the cargo delivery or expected delivery date.
However, under the Visby Amendments, parties may:
- extend the one-year time limit by agreement (Art. III Rule 6); and
- bring an action for indemnity against third parties beyond the one-year time limit (Art. III Rule 6 bis).
These rules enable recourse actions that may have otherwise been time-barred
Last but not least, there’s still one piece of information you’re missing if you are to file a provisional claim:
Which details must a provisional claim include?
The notice of damage or loss must be in writing, and it must specify:
- Data to identify the shipment (B/L or WB No., voyage, container No.)
- Type of damage or loss noted (mouldy, broken, torn, wet)
- Cause of damage, if known (package overturned, forklift damage)
- Date and signature
Furthermore, your provisional claim should include this paragraph:
«We reserve the right for ourselves and/or our insurance company to present a specified claim later”.
Remember that, by putting the carrier on notice in writing, you are protecting the insurance company’s subrogation rights.
What happens next?
Filing a provisional claim may be the sine qua non of your claims handling. But it’s only the start of what may be a lengthy process: survey coordination, preventing further damage, claiming recovery…
Did you know that Claimar provides all these services as a TPA administrator? Let us turn your claims problems into solutions.