Q: We use a freight broker and made a small shipment with a national less-than-truckload carrier. Unfortunately, the shipment never reached its destination and was lost.
We filed a claim with the carrier, but it denied the claim because it never received confirmation from the consignee that the freight never arrived. Our consignee is a huge corporation, so I’m not sure if the carrier’s request even went to the right department. I asked carrier representatives for a copy of the letter, but they’re not allowed to send it to me.
I’ve filed claims in the past, and never had an issue like this. I have contacted the consignee, but in the meantime if the consignee doesn’t reply to the carrier, do I have any recourse in getting reimbursed or am I out of luck because the consignee never replied to the carrier’s request?
If this rule were right, what would have happened if the consignee went out of business in the time between shipment and claim letter?
A: Well, of course there’s no such “rule.”
Now, I certainly can’t blame the carrier for wanting proof that the shipment never arrived. Sure it does. Your legal obligation is to prove that you turned over the goods to the carrier at the origin and, in the case of non-delivery, that they never arrived at destination. It naturally wants you to satisfy both ends of that obligation.
Where, though, does it get off trying to tell you there’s only one acceptable form of such proof?
Actually, you probably already have the proof required in your files. Some way or another you found out the shipment hadn’t shown up at destination, right? I mean, otherwise you’d have had no cause to
file a claim. And, most likely, the report to you was made in written form, because the consignee would have wanted something in writing to say why it wasn’t paying your invoice.
That’s all you need. Oh, if you want to dot all the i’s and cross all the t’s, you can go back to your consignee for an update — no, it’s still missing. That ensures against any possibility that the thing simply got delayed and was delivered way late but still intact.
That, however, is the most you need. The consignee isn’t obliged to reply to the carrier’s letter. Indeed, why would it bother? The carrier is nothing in its young life. It doesn’t have an issue with the carrier at all; the issue is between you as claimant and the carrier as claimee (as it were).
(Now, I’m assuming the goods were shipped f.o.b. destination, so that you were still the owner while they were in transit and lost. If I’m wrong and they moved f.o.b. origin, the consignee owned the goods when they went missing and is the proper claimant; you can just dump the whole problem in its lap and tell it to pay your invoice anyway.)
So the carrier’s letter to you points out what’s essentially a non-issue. There are multiple forms of proof of non-delivery you can provide. Indeed, the carrier ought to have the requisite records itself. If the goods weren’t delivered, it will necessarily have no proof of delivery, and without that, how can it bill you or your freight broker for its services? And why, for that matter, is it disputing the non-delivery at all?
I see two possibilities: The carrier is just stalling, hoping you and your claim will go away quietly, or for some reason, its records and yours don’t jibe — it’s showing delivery whereas the consignee reported to you that none was made — and something’s a little funky here.
Either way, you want to pursue this aggressively. Your first step should be to present whatever proof of non-delivery you have and demand immediate payment. The threat of a lawsuit — even if it’s for a small sum, you have the option of small-claims court — might help you there.
At the same time, you also might contact your freight broker, who presumably set this up, for any help it might furnish in moving the carrier off the dime on this claim.
Because you say this is “a national less-than-truckload carrier,” you should expect prompt action. If you don’t get it, in your shoes, I’d turn this claim over to the lawyers. That’s a really lame excuse for a declination.
Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.