Freight Packaging Requirements, Cargo Claims, LTL Carriers, & the NMFC!
How Do You Properly Package LTL Freight & Get Paid on a Claim?
Packaging, LTL Carrier Rules Tariffs, and the NMFC
This is the second time I’m taking the time to write about this topic. I feel it is so important for shippers to understand how to properly package their freight to “withstand the rigors of normal transport” that it’s worth it! Time and time again, I see shippers wait until their stuff gets damaged and the carrier denies their claim to start considering packaging requirements. If your company makes, sells, and ships a valuable commodity, it would serve you well to start your investigation here. What you’ll find is two things: One, you have to signup and pay for the NMFC’s publication in order to find out what rules apply to your commodities and packaging; and two, there are very specific rules in place that must be followed in regards to packaging. All of the major LTL common carriers stipulate in their tariff that you must comply with the packaging requirements laid out in the NMFC! Further, many trucking companies add a whole bunch of additional rules themselves. Whenever you choose to ship with them, whether you like it or not or know it or not, you’re agreeing to their terms and conditions, which is their entire tariff consisting of hundreds of pages, that hardly anyone ever reads!
My Freight Got Damaged… I’ll Just File A Claim…
Well, maybe… or hopefully… or good luck! Think of it like this: Most carriers are currently just barely breaking even in terms of net profit and many have been running in the red for many years now. This means for every dollar of revenue a carrier brings in it is netting a couple of pennies or worse. If they destroy a $25,000 shipment, operating on such a miniscule profit ratio, how many trucks would they have to move just to cover that one claim? An awful lot! This means, you better have your I’s dotted and your T’s crossed if you want to be the company who collects every dollar you’ve lost in damage by common carriers. You have to comply with the packaging requirements or guess what, your claim gets denied! You need to read the NMFC and find out what packaging requirements exist for your commodity and make sure your boxes, crates, drums, etc., are up to snuff. Then you need to take the time to read the tariffs of all the carriers you work with to see what additional limitations they have in place to protect themselves. For instance, some carriers are putting things into their rules that say that they will not pay claims for shipments consisting of loose articles, which of course they’ll accept, or for pallets that are uneven on top since it increases the likelihood the uneven part will damage the boxes below it and not allow for a flat surface to hold other freight above it. By definition, LTL freight means your orders are going to be crammed into the truck with other shippers’ freight. Sometimes on top, sometimes on bottom. The carrier has to be able to rely on the fact that your cargo is packaged with the appropriate strength boxes or packaging, so they can maximize their volume on the truck, thus, maximizing revenue.
Realistically, What Can I Do to Protect Myself?
Great question. If you don’t have the means to get really deep into all this packaging stuff or fall asleep to quickly when reading these complicated carrier tariffs, contact a packaging consultant to help you out! Heck, pay me to consult you on your packaging and carrier’s rules. Pay a packaging company to come in and design some state of the art packaging for your products that meets all industry criteria. You could also work to get a contract with your carriers to the effect of “you guys damage it, you pay for it, bar packaging requirements.” Of course, they’d probably give you a smaller discount. Finally, you could get a general, blanket cargo policy to cover you in the event the carrier doesn’t pay a claim on some damaged cargo. Just make sure you understand any limitations of the policy. For a very informative guide to packaging download the Fedex packaging guidelines! It’s really detailed and explanatory. If you’re a company that has your packaging in order and knows your carriers’ rules, then this isn’t for you, but you probably aren’t reading this anyways. This is for all the shippers out there over the years that have that deer in the headlights thing going on, when all of sudden they see their shipment smashed to tiny pieces and 6 months later get a letter denying their claim due to insufficient packaging! For you guys, I hope this helps!