As a shipper, it’s an inevitability you’ll run into trouble with a shipment and have to resolve it. Do you know what you need to file a successful OS&D claim?
What Does OS&D Mean?
In the context of LTL claims, OS&D is an abbreviation that stands for over, short and damage. To expand the meaning further, here’s a description of each term used:
- Over or Overage: The shipment quantity is over and above that listed on the shipping documents
- Short or Shortage: The shipment quantity is less than that indicated on the BOL (bill of lading)
- Damage or Damaged: The shipment was received damaged. Damage can be either externally visible or concealed within the packaging containers.
Solving Problems Associated with LTL OS&D Claims
Nobody wants to deal with the headaches of filing a claim of any kind – but it does happen. The fallout from an interruption in your supply chain will include delays, unexpected costs, lost productivity and perhaps worst of all, a loss in customer confidence.
Moreover, OS&D can become a point of contention between you the shipper and your 3PL partner as you try to hammer out the details. Both sides have to feel they’ve done the right thing towards resolving a claim.
To help you get past the problem of dealing with an OS&D claim as quickly and efficiently as possible, we thought we’d share some insight into how limit claims and improve your chances of recovering a payment.
Details of OS&D Claims
Since there are a number of aspects and circumstances that constitute a claim, here’s some further explanation on the particular elements:
Time Period for Filing a Claim
For visibly damaged goods, a shipper usually has nine months to submit a claim. Taking numerous pictures is critical in making sure there’s enough evidence to back-up the freight claim.
Similarly, don’t delay the claims process by waiting any great length of time. The success of being compensated goes down the longer you wait.
As shipping technology advances so does the ability to monitor freight claims. Using technologies such as Software-As-A-Service (SaaS) can greatly help to expedite the claims management process.
Shipper’s Responsibility for the Freight Bill
As a process, the freight bill still needs to be paid regardless of whether there is a claim in place or not. As a shipper you are still required to pay the invoice as part of the delivery service.
In other words, claiming reimbursement for a damaged shipment is a completely different process and transaction.
Bill of Lading
The importance of the Bill of Lading or BOL, can’t be underestimated. It’s the key document the carrier uses to verify all aspects of the shipment itself, especially when associated with an OS&D freight claim.
As a main point of reference in evidence, it’s the one document both parties inspect first to determine how the product was received at the warehouse or distribution centre.
Along the shipment’s journey, signing the BOL acknowledges the product arrived and verifies its condition. Before signing off on the BOL, he receiver validates the shipment quantity and inspects it to make sure there’s no visible damage to the freight.
Once the BOL is signed, the bill of lading is free and clear. This now “Free BOL” allows little to no opportunity for filing a damage or short-ship claim because title of the product is transferred at that moment.
As the name implies, a shortage claim occurs when freight arrives incomplete. The shipment is clearly missing a number of units and does not match the details described on the bill of lading.
If a consignee or receiver made a note of a shortage on the BOL, it’s relatively easy to file a shortage claim.
Concealed Damage Claim
Due to the extra layer of inspection required, concealed damage claims are more difficult to pursue and claim for reimbursement.
In comparison to obvious visible damage where you have an extended period to file a claim, most carriers will only allow concealed damage claims to be filed within five days.
Concealed Shortage Claim
Similar to a concealed damage claim, concealed shortage claims are not immediately recognized and therefore not noted on the BOL at the time of signing.
Concealed shortage claims are difficult to prove, so you’ll often find that carriers push back very hard on these claims.
As with other concealed claims, time is of the essence. You only have five business days to let your shipper know about the shortage. If you delay beyond five days, your carrier will deny your claim.
Refused Freight Claim
If a consignee is not happy with the condition of their received freight, they have the right to refuse part or all of the shipment. Examples of refused freight include: damaged freight, late shipment or wrong product.
In the case that your consignee refuses shipment, it’s returned to your carrier’s delivery terminal. Your LTL or 3PL partner will contact with the following options on what to do with the freight:
- Send it to another address
- Send the shipment back to the address of origin
- Dispose of the product of as per your company’s policy
Depending on the agreement with your provider, you may or may not have to pay the invoice.
Once again there is a critical window of time window. You must file the claim within five days otherwise the carrier can deny the claim.
A loss claim makes great case for maintaining insurance as it means your entire shipment was lost by the LTL motor carrier. The majority of loss claims occur due to the shipment paperwork being separated from the physical freight itself.
In this situation, your carrier will typically have a week to try and to locate your freight. Service providers understand this does not reflect well on them. Therefor in the event the freight is not found, you will not incur shipping charges and the claim will be reimbursed quickly.
Freight Claim Reimbursement – Key Points to Keep In Mind
Successful OS&D claims begin and end at the receiving dock. Taking immediate action will help ensure the claim is quickly processed and approved.
The following lists cover the essential documents and actions required to facilitate a quick resolution:
OS&D Claim Requirements
- POD must notate any discrepancy to the BOL
- Copy of the freight bill
- Original BOL must be included
- Merchandise invoice documenting the value of goods
- Repair or replacement bill for the product
- Pictures of the damaged freight
- Damaged freight must be saved until the claim is approved
How to Improve the Product Receipt Process
- Inspect the freight immediately
- Do not sign the BOL without inspecting the freight
- Document any damages or shortages
- Notate any damage on the BOL
- Take pictures of the freight
- Store the shipment in a safe area to prevent further disturbance until the claim is approved