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.

Shortage Claim

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.

Loss 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

If you’re running a business that produces physical goods, chances are you’re not only dealing with aspects of shipping, but receiving as well.

Given enough time, having a delivery come through your receiving department with obvious damage is going to happen. It could be from long distance wear and tear, improper packaging, mishandling, or any number of other factors.

As mentioned, receiving damaged freight is an inevitability – it’s a frustrating situation for both parties. The best course is to deal with the problem calmly and professionally, without finger pointing and freaking out.

What remains is knowing the best way to through the freight damage claim process. This will not only go a long way in maintaining relationships, but will get you back on track quickly and efficiently.

Here’s what to do when you’ve received damaged goods. Remember to remain even-keeled, document everything and follow the steps below.

Managing the Freight Damage Claim Process

1. Do Not Turn the Driver Away!

When it comes to carriers and freight contracts, these are your partners. Refusing to accept a shipment, even in a compromised condition, will likely only cost you more in the long run.

You might also be subjected to further shipping costs. Do not turn the driver away, instead, accept the freight, damages and all even though it may seem counter-intuitive.

2. Accept the Damaged Goods

By accepting the damaged delivery, you have the opportunity to thoroughly document the specifics. You can then file a claim, and you’ll likely be duly recompensed. Proper records will help determine whether the claimed damage was the fault of the original shipper, such as poor or inadequate packaging.

If the problem occurred during the carrier’s haul, they’ll be found at fault and will have insurance to cover such losses.

If you do not accept the damaged freight, the carrier will have to send it back to their warehouse and store it as the claim is processed – which costs time, increases the chances of further damage, and potentially leads to further charges. It doesn’t do much for the relationship either.

If you utilize a third-party insurance policy outside of the carrier, be sure that your policy does not have clauses that nullify their responsibility to compensate you if you refuse the freight.

Most insurance policies require that you accept the freight, document everything, take pictures, or even have a claims inspector come by to personally verify the damaged product received.

3. Document Everything

Act immediately and takes notes of any damages or shortages. Check the Bill of Lading (BOL) or proof of delivery (POD) provided by the carrier that they’re accurate.

It’s important to not only makes full records of obvious exterior damage, but consider the condition of the contents. Unseen damages that are not apparent at first glance can be hard to prove if the container is more or less in tact. Therefore it’s prudent to fully inspect and record the condition of the packaging and its contents for any undue harm.

In terms of associated paperwork, the Bill of Lading acts as the carriage contract between the carrier and the shipper. Most claims in the US will rely on U.S.C 14706 as the standard for resolving claims disputes, but freight claim laws differ on a state by state basis, and from country to country.

Because the laws are dramatically different when crossing the northern or southern borders, the point of origin will be the deciding factor on the legal jurisdiction that presides over the claim. For example, if a freight shipment intended for Mexico departs from Canada and is damaged or lost along the way, Canadian claims laws will be used in the resolution process.

Take pictures of the damaged goods. Make sure they’re clear, focus on the damage in context, and support your claims. Once you have taken pictures, contact your carrier or freight logistics company and let them know you received damaged goods.

Keep in mind carriers have a legal right to mitigate the value of their claim. This can be done by allowing them to try to make good on the shipment by re-delivering, salvaging, or returning the goods. Consequently, if you don’t give them their opportunity to mitigate or recoup loss, they may have legal grounds to deny your claim.

The time frame is to file a damaged freight claim is generally two weeks. Some carriers may allow longer claim times, or utilize different methods to prevent missing freight. regardless, the moment you realize you have a claim for damage on shipped goods goods, alert your carrier.

Be diligent in following up, it’s your responsibility, not theirs. Moreover, a properly annotated BOL is regularly used as proof of delivery and condition. Fill it out and then contact the claims department for additional freight claims procedures and paperwork.

It’s also important to be clear in your description of how the external damage instigated further harm to the internal products. There’s a big difference between goods that leave the factory in an already compromised condition, and those that become damaged through handling during the shipping process.

4. Keep the Freight and Packaging

It may be inconvenient to store the damaged freight, but it’s important that you do. Remember, the carrier has the right to inspect the damage in person and the right to salvage the damaged freight. Not allowing them access for inspection could result in only partial compensation or outright denial.

However, in cases such as food spoilage or hazardous materials, disposal laws may supersede the carrier’s right to salvage. Regardless, they still do have to be notified first to give them the opportunity to act.

5. Protect the Freight from Additional Damage

Receiving damaged freight unfortunately means it’s also your responsibility to not aggravate the problem. Store the received damaged goods in a safe place and do everything you can to keep the shipment from suffering further damage.

Put the received damaged goods out of the way of normal operations to avoid having to move it again. By reducing handling, you decrease the odds of further damage.

6. Pay the Freight Charges

There are requirements that claims be filed along with a copy of the paid freight bill. Regardless of who is at fault, refusing to pay the freight bill can hurt your claims resolution.

Moreover, you’ll show a sign of good faith and cooperation by paying the freight bill immediately. Consider this tactic a necessary step towards a full recovery of everything owed back to you.

7. File a Freight Claim Immediately

As with coordinating documentation, filing the freight claim should be done as quickly as possible. According to the Carmack Amendment, a carrier within the United States has to acknowledge a claim within a month of the initial filing.

Subsequently, a written final disposition has to be handed over within a three-month period. Following that, the claimant will have two years to dispute the disposition.

Remember, time in freight claims procedures is not your friend. If you file a claim after the initial claim period, that claim will be automatically voided.

8. Understand Maximum Liability Amounts on Freight Claims

Within Canada and Mexico, carriers are responsible for a permanent dollar per pound rate – unless the two parties had a prior agreement on a higher rate. Currently the rate in Mexico is fixed at 2.8 ¢/lbs, within Canada, the rate is $2 CAN/lbs. If the carrier is found liable within the United States, the carrier is responsible for the actual value of the lost or damaged freight.

9. Keep Copies of All Records

For convenience, refer to this checklist if you received damaged freight:

• Copies of photos depicting the damage
• A copy of the packing slip
• Bill of Lading copy
• Paid freight bill copy
• A copy of the invoice showing the price paid for the damaged goods received
• A standardized claim form which identifies the shipment and the states the claim amount.

Once all the records and documents are compiled, put them in an appropriate folder and keep it where you’ll have quick yet secure access to it. With an overabundance of precise evidence available, you serve yourself in strengthening your claim.

Remember, Receiving Damaged Freight Is Just Another Process

You will inevitably receive damaged freight, you’ll likely be annoyed, frustrated and frustrated. But logically, think of it as a part of doing business, have a process in place to accommodate the disruption – a plan B.

Managing your freight claims efficiently can save you both time and money. Document everything and understand the process. File your claim as soon as possible and be sure that you know how the freight claims procedures work according to your contract with your carrier.

Follow the steps and you can make the normally difficult situation of receiving damaged freight as stress-free as possible.