Freight Claims

Freight Claims: How Much Are They Really Costing You?

A Freight claim, also known as cargo claim, is a legal demand made by a shipper or a consignee for damage or a loss of a shipment as a part of financial reimbursement. When an item is being sent via shipping or through cargo or other transportation facilities, the freight is insured so that if damage occurs during the transportation, the logistics company will pay the consignee for the losses. To claim the loss Freight claim is issued against the logistics company.

Factors affecting freight cost:

The cost of insurance or freight is based on the following factors:

  1. Distance between the departure location and the destination:

The calculation of distance is very important as the overseas shipment rate and the local shipment rates are entirely different. The freight cost would increase according to the shipment distance and the weight of the distance (for example if the shipment is to be delivered in an isolated village in a different country then the cost would be high).

  1. Weight of the shipment:

The shipment has standard rates based in a particular set of weight as labour or the lifting machinery should able to lift the shipment of the consignee.

  1. Classification:

There are two freight classes when it comes to shipment:

    1. Low classification shipment: refers to freight which requires low rates for the shipment.
    2. High Classification shipment: refers to freight which requires high rates for shipment.

    Mode of shipment:

It refers to the timeline during which the consignee wants the freight to be delivered. In case of urgency, the consignee can pay extra for faster shipment.

  1. Other costs:

This includes the rate for fuel, tariff and other rates (third party vendors), this is also included in the freight cost.

All these factors are included while calculating the freight cost. There are shipment companies who try to add extra costs to increase the freight price for their own profit. The companies who can offer you the total breakdown of all the cost and unveiling all factors in the bill are the best option for cargo shipment including the insurance amount and how it has been calculated.

There are four types of freight claim:

    1. Loss: This happens when all the documentation is made and the freight has been shipped into the cargo but it never ends up at the destination. It means that the shipment was lost during the process.
    2. Damage: the damage which occurs during the shipping process.
    3. Shortage: when some of the items from the freight are missing.
    4. Concealed damage or shortage: This is a very rare situation, it refers to the damage or shortage which was noticed post the process of handing over of the freight and the documents were signed.

Which is why freight insurance is recommended by every logistics company.

Here are some benefits of freight insurance:

    1. In case of damage to the freight, you will receive the complete monetary value of the shipment with the help of freight claim.
    2. The freight insurance rates are fixed and are based on the classification of the freight.
    3. You can also track your shipment online, you can check the update each second including the delivery time.
    4. In case of damage, companies do provide an online claims system.

We at Wersel Logistics solution provide the best cloud solution for freight forwarders across the world and increase their competitive edge with the help of the latest technology. We provide customer relationship management services, shipping management, transportation management and logistics system to our freight forwarders with the help of SaaS solution. We ensure to use the best practices.

For more information call us at +1-213-337-8564 or email us at [email protected] for shipment queries and other services provided by us.

Check our recent blog on Best Practices To Improve Logistics Efficiency.

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