By: Brian Schrumpf
There are federally mandated deadlines and time-related guidelines for filing cargo claims, investigating and responding to cargo claims, and filing lawsuits for cargo claims. These federal rules apply to shipments governed by the Carmack Amendment (most commonly, interstate shipments). There are also some common misconceptions regarding the time limits involved with cargo claims. This article will explain the deadlines and time-related guidelines for cargo claims governed by the Carmack Amendment.
Contracts. First, be aware that the contracts between motor carriers, brokers, freight forwarders, and Shippers can establish and alter cargo claim deadlines. As such, it is important to check the Bill of Lading, Broker-Carrier Agreement, Terms & Conditions, and other contracts to identify any cargo claim deadlines.
Filing Cargo Claims (49 U.S.C. § 14706(e)(1)). The Carmack Amendment allows the motor carrier to establish a deadline for filing cargo claims with the Shipper (or the Shipper’s agent), but the Carmack Amendment does not establish the deadline.
The Carmack Amendment only states that a motor carrier cannot require cargo claims to be filed in less than 9 months. So, if the Bill of Lading states that cargo claims must be filed within 6 months, then that provision is unenforceable. It is a common misconception that the Carmack Amendment requires cargo claims to be filed within 9 months.
Acknowledgment of Cargo Claims (49 CFR § 370.5). Upon receipt of a properly filed cargo claim, the motor carrier (or their agent, such as an insurance adjuster) must acknowledge receipt of the claim in writing to the claimant within 30 days. The motor carrier must also identify what additional documents and information are needed to process the claim.
Investigation of Cargo Claims (49 CFR § 370.7). Motor carriers must investigate cargo claims “promptly.” While there is no exact timeframe for what “prompt” means, the next deadline occurs within 120 days, so the cargo claim must be investigated within at least 120 days.
Pay, Decline, or Make a Firm Settlement Offer (49 CFR § 370.9). Motor carriers are required to pay, decline, or make a firm settlement offer in writing to the claimant within 120 days after receipt of the claim.
However, if the claim cannot be processed and resolved within 120 days, the carrier must advise the claimant in writing of the status of the claim and the reason for the delay in making final disposition of the claim. This notice must be sent to the claimant at the end of the 120-day period and at the end of each successive 60-day period until the claim is resolved.
Filing Lawsuits for Cargo Claims (49 U.S.C. § 14706(e)(1)). The Carmack Amendment allows the motor carrier to establish a deadline for filing lawsuits for cargo claims with the Shipper (or the Shipper’s agent), but the Carmack Amendment does not establish the deadline. If no deadline is contracted for between the motor carrier and the Shipper, then the lawsuit filing deadline is generally governed by the state’s law for filing a similar lawsuit.
However, note that the Carmack Amendment states that a motor carrier cannot require lawsuits for cargo claims to be filed in less than 2 years. So, if the Bill of Lading states that lawsuits must be filed within 1 year, then that provision is unenforceable. It is a common misconception that the Carmack Amendment requires lawsuits to be filed within 2 years.