Comment: How to recover fresh produce claims effectively

In the highly competitive fresh produce industry, it is essential that cargo reaches its destination in sound condition. But the reality of global shipping is that things can – and often do – go wrong.

Whether it’s excessive delays, reefer malfunction, power outages, or spoilage due to inadequately controlled airflow, the need to file a cargo claim arises more frequently than anyone would like.

Navigating the complexities of such claims can be a daunting task. But with the right approach, you can maximise your chances of a successful recovery from liable carriers.

Recoupex’s recent industry survey revealed that 40 per cent of fresh produce exporters identify document gathering as their biggest headache in the cargo claims recovery process.

This article is designed to help you to orchestrate your cargo claim documentation and claim process better.

1—Start with the right documents

The foundation of any successful cargo claim is proper documentation. Without it, even the most genuine and legitimate claim can be rejected. Here’s a checklist of essential documents:

Bill of lading
This serves as the contract of carriage between shipper and carrier.

Commercial invoice
This details the value of the goods, which is necessary for calculating the claim amount.

Packing list
This provides information on how the goods were packed, which can be crucial if there’s a dispute over improper packing.

Survey report
In house or third party, this documents the extent of losses and the cause of the damage.

Temperature records
For fresh produce, maintaining the cold chain is vital. Temperature logs can prove whether the goods were kept within the required temperature range.

Photographic evidence
Pictures of the cargo in sound condition at origin, and damaged at the destination, can prove it was was stuffed properly, precooled, and then damaged in transit while it was in the carrier’s care.

Precooling evidence at origin
Loss mitigation documents at destination. Was the salvaged cargo sold or destroyed?

Preliminary notice of claim
Regulations for the international carriage of goods by sea, known as Hague-Visby Rules, state that notice of loss or damage must be given to the carrier – or their agent – in writing within three days, otherwise they are assumed to be delivered as expected.

But it is almost impossible for cargo receivers to know within those three days if cargo inside a container is damaged. That is the primary reason why shipping lines reject any claim submitted after this period.

To overcome this, it is now industry practice for shippers to notify shipping lines even before the cargo arrives and invite them to attend de-stuffing at the receiver’s warehouse – regardless of whether or not the receiver appoints a surveyor, regardless of whether or not the cargo has actually been damaged, and regardless of whether or not the shipping lines want to attend the joint survey.

Claim breakdown
Most shipping lines pay CIF value of the damaged cargo, and between one and three times freight, for the cargo damaged due to excessive delay.

2—Engage in meaningful follow-up with shipping lines

Submitting your claim is just the first step. The real work begins with follow-up. Shipping lines often handle numerous claims, so ensuring yours is not lost in the shuffle requires persistence. Regular, proactive communication is key. Here are a few tips for exporters:

Establish the right point of contact
A carrier’s claim handler has the right to investigate and pay out cargo claims. Do not waste time chasing the carrier’s local import clerk.

Set clear deadlines
Politely but firmly request timelines for responses to keep the process moving. Answer the carrier’s questions promptly and provide supporting documents.

Be ready to escalate
If your initial contacts aren’t responsive, don’t hesitate to escalate the issue to higher management or external lawyers that specialise in cargo claims recoveries.

3—Beware of the ‘time bar trap’

One of the most common reasons why cargo claims fail is because carriers push them to the time bar, after which the claim is extinguished. Here is how to avoid losing your cargo claim due to a missed deadline:

Know your deadlines
For ocean shipments, it is 12 months after delivery date. Ask the carrier to grant a time extension if a time bar is imminent.

Act quickly
Don’t wait until the last minute. Begin your claim process as soon as you identify an issue.

4—Seek professional help when needed

Using your commercial relationship and expecting the carrier to pay a claim as a goodwill gesture might seem a great idea, but it often fails. When a claim resolution is delayed, it is wise to seek expert help.

Specialists in cargo claims, like my company Recoupex, have the experience and resources to handle various cases and can often recover claims that might otherwise be denied.

They also have the advantage of dealing with various carriers. They build claim defences, counter back, and negotiate with carriers, all of which expedites the settlement process.

Improper handling of fresh produce claims can be very expensive, time-consuming, and frustrating. So it should be avoided.

The more knowledgeable the exporter is about the ins and outs of the claims process, the better equipped they will be to recover losses from the liable carrier faster.