Concealed damage
What is a concealed damage claim?
Concealed damage claims occur when a receiver finds item damage or a product shortage in a shipment that has already been delivered and unpacked, unpalletized or opened. With large, palletized freight shipments, identifying concealed damage takes time, and the gap between delivery and filing a claim can sometimes lead to payment delays or denials, especially if best practices aren't followed.
The carrier is generally liable for loss or damage caused by its own negligence, but that liability isn't automatic—concealed damage claims can be more challenging to prove than damage discovered at the time of delivery, since there's no way to confirm the shipment's condition at the moment it changed hands.
Why does concealed damage happen?
Concealed damage can occur throughout the delivery process, from loading or consolidation to in-transit and unloading phases. Quickly identifying and providing evidence for damage that isn't the receiver's responsibility is critical to successfully processing a concealed damage claim.
Even if the delivery receipt has been signed as clear, receivers should report damaged, lost or missing product as soon as it's identified, within the allowable time frame set by the carrier.
What is the time limit to submit a claim on concealed damage?
Once concealed damage is identified, it's important to file a claim with the responsible party as quickly as possible. Although there's no set standard for the time allowed to report a claim, many carriers require the delivery recipient to file a concealed damage claim within five days of delivery. Shippers should familiarize themselves with the shipping contract to ensure that, if damage or product shortages do occur, claims are properly reported within the required time frame.
How do I reduce the risk of losses due to concealed damage claims?
Timing and recording pre-shipment conditions are critical to proving a product was in good condition before the carrier picked up the shipment. Shippers can take the following precautions to reduce the risk of losses due to concealed damage claims:
Photograph items and packaging to show the condition of the shipment at the point of origin
Use temperature, impact and tilt recorders to monitor the conditions of the shipment's journey
Record how the shipment was handled prior to and during the loading process
Identify who handled and loaded the goods, and how the shipment was secured
How technology helps businesses navigate concealed damage claims
Nobody wants damage to occur during a shipment, but it's important to be prepared and respond quickly when damage or loss does occur. The right technology helps businesses eliminate manual and legacy freight claims processes with workflows that automate processes and enable end-to-end claims management.
Shippers, carriers and third-party logistics (3PLs) providers can achieve cost savings and gain efficiency through automated claims tools that:
Automate claims reporting and management processes
Integrate settlement solutions into their transportation management system (TMS)
Streamline communications during the claims lifecycle
Reduce transaction costs and timelines
Improve overall claims recovery rate
On the shipper side, this kind of automation can instantly attach mobile-uploaded photos of damage to a claim, apply quality-assurance workflows to avoid processing delays, and auto-generate a digital claim form to send to the carrier. On the carrier side, similar tools help convert incident reports to claims quickly, collect supporting documentation, track salvage details and offer customers a self-service claims portal.
When damage or loss is discovered after a delivery has already been unloaded and confirmed, businesses need technology that can help them file and manage concealed damage claims effectively.