Concealed Freight Damage: What to Do When Your Shipment Is Damaged on the Inside

There is nothing worse in the business of shipping when you import goods from overseas, only to discover that the goods are damaged inside their packaging. What’s even more frustrating is knowing that these items were declared as damage-free when they arrived.

Below, we’ll outline what you need to know about concealed damage, including; what it is, how the freight may have become damaged and what you can do when you discover that your shipment is damaged on the inside.

What is concealed freight damage?

As the name implies, concealed freight damage refers to cargo damage that is only discovered once the cargo has arrived, and after it has been declared damage-free by a proof of delivery (POD) document. This is the most frustrating of all types of damage because shipments are thoroughly inspected for visible damages before packing them. However, when cargo arrives, the damage is there. Concealed freight damage may also be used to refer to lost freight during transit.

The Causes of Concealed Freight Damage

There are various reasons why concealed freight damages occur. The most common ones are listed below:

1.      Incorrect Packaging

The type of packaging must be appropriate for the type of product shipped. If you pack your cargo with incorrect packaging, it can harm the cargo and increase the risk of pilferage.

2.      Inappropriate handling of goods

The goods shipped are handled at various stages of the supply chain from in-yarding, to vessel loading, unloading, and delivery. While all these activities are being carried out, there’s always a chance that goods are not handled correctly.

The carrier must utilise the proper material handling equipment not just to make the process efficient but also to reduce the occurrence of cargo damages.

3.      Dropped or fallen shipments during loading and unloading

During the loading and unloading process, there is also the risk of possible mishaps due to unobserved protocols. Things like unstable cargo vehicles, inadequate lighting environments and unsecured loads can all cause freight to become damaged.

4.      Parts of shipment stolen during transit

Stolen shipments are always a risk when undertaking domestic and international shipments.

5.      Manufacturer did not provide all goods

Even if your goods arrive in good condition, there is also a possibility that the manufacturer failed to include a portion of the components of the said product.

6.      Temperature changes during transport

Certain commodities like perishable products, drugs, and chemicals are susceptible to temperature fluctuations. Common temperature-related damages are due to the weather, proximity of product to the container wall, contact with floor, and temperature fluctuations during loading activities.

7.      Mould inside the container

If the container gets exposed to rain and water leaks in, that is the perfect environment for mould to grow.

If exporting, inspect the container thoroughly prior to loading the goods to spot any cracks or fissures. Report and return any containers with visible cracks or holes in them.

Example of consignment with mould. In this case, appropriate packaging prevented the goods from being contaminated, despite the wood beams being compromised.

8. Malfunctioning temperature controls in reefer containers

Reefers, or refrigerated containers, are equipped with an electrically-powered cooling unit that preserves cargo to avoid deterioration. However, when the equipment is not given proper maintenance, there’s a tendency for it not to function properly. The result may be damaged freight.

Who is responsible for concealed freight damage?

The carrier is generally responsible for the proper handling of shipments while in transit, so they may be liable for any damage caused to your goods depending on the precise circumstances. However, because the package was concealed before shipment, it can be a real challenge to prove liability for damaged goods.

In reality, carriers rarely accept liability for damage or missing cargo in transit, even when all attempts are made to make them so – which is why we always recommend cargo to be covered by marine insurance.  

Further, if you as the receiving party signs on a proof of delivery (POD) document without noting any damage, it may be arguable that you’ve made yourself partly accountable for the damaged goods. So, who’s to blame for a concealed damaged shipment? It will always depends upon the case, but it will typically be the receiver’s responsibility to prove that the item was damaged before receipt.

Tips for Concealed Damage Freight Claims

1.      Accept the shipment

Many think that by accepting the freight, the carrier is released from the responsibility of damage to the shipment. But that is not necessarily going to be the case. Moreover, by refusing to accept the shipment, the damaged goods will be taken back to storage, which will of course entail more storage costs. Many marine insurance policies also require that the shipment be accepted first before claims can be processed.

2.      Thoroughly inspect the cargo before signing

Don’t be in a hurry to sign on the delivery receipts. Always make a thorough inspection of the product and its packaging and note any pieces of evidence that show hints of damage.

Below are some of the best practices for concealed damage claims:

• Check the actual number of pieces versus the number of pieces indicated on the delivery receipt.
• Notate on the delivery receipt the actual number of units received.
• Review the unit and packaging, including the handling material (e.g. pallets).
• Check for packages that are open, exposed, or torn.
• Ensure that special instructions indicated on the Bill of Lading was observed by the carrier.

3.      Document any irregularities.

To establish solid evidence in freight claims in your favour, document any damages seen by noting them and taking pictures of the packaging and the truck carrying the damaged goods. The more evidence you have at hand, the more a freight claim becomes credible. Take note that if the evidence is not sufficient, there’s a possibility for an insurance claim to be denied.

If possible, take photos and videos of the damage found in different angles and lighting. Back these up with good paperwork before submitting a claim.

4.      Submit your claim as soon as possible.

After noting visible signs of damage or noticing a lost item, act on it immediately by submitting the claim within 5 business days. You may still submit beyond 5 days but you’ll need stronger proof that the damage is beyond your accountability. Always check your insurance policy to determine what timeframes you need to meet.

5.      Submit your claim directly with the shipping carrier.

As part of the protocol, you must submit the claim to the party to whom you received the damaged goods.

How to Submit a Concealed Damage Freight Claim?

The conventional method for cargo claim procedure was once to formalise the complaint through a handwritten letter. However, with the advent of technology, most third-party logistics providers allow the online processing of freight claims – email, online chat, and software applications where you can also attach pictures and pertinent documents.

Since concealed freight is always unexpected, you’ll need to support the claim with as much evidence as you can. Your carrier most likely has an advanced tracking system to determine where in the shipping process the damage was done.

Final Thoughts

Freight damages are always a source of great stress in the shipping process. So make sure you’re proactive when shipping internationally. Insure your goods, document as much as you can, and be prompt in submitting freight claims. Lastly, choose business partners that offer reliable services and high responsiveness.

If you want to know more about insuring your goods for international shipping, contact one of our representatives today.

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