Records Retention Question

[ATeam]

I used to know the answer to this when we were working the business but I have forgotten. After a load is delivered, how long does a motor carrier have to make a freight damage claim against you?

I ask because Diane and I kept every piece of paper related to every load we ever hauled. We had ZERO freight damage claims in 10 years, but we kept the paperwork in case it was needed to defend ourselves in such a dispute. I'm pretty sure we can delete and/or trash all those records now but want to be 100% sure before we do. Your answer to this question will be appreciated.

This is not about tax records (I know that answer). It's about the bills of lading and other such documents.

 

[tknight]

I take a picture of every Bol and toss the paper after 10 days!


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[Ragman]

I used to know the answer to this when we were working the business but I have forgotten. After a load is delivered, how long does a motor carrier have to make a freight damage claim against you?

I ask because Diane and I kept every piece of paper related to every load we ever hauled. We had ZERO freight damage claims in 10 years, but we kept the paperwork in case it was needed to defend ourselves in such a dispute. I'm pretty sure we can delete and/or trash all those records now but want to be 100% sure before we do. Your answer to this question will be appreciated.

This is not about tax records (I know that answer). It's about the bills of lading and other such documents.

Phil,
I would like to think enough time has passed that you don't need to worry about any claims.

 

[fastman_1]

Since most customers pay in 90 days then my copy goes to the trash in 90 days


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[redskunk]

I believe a claim can be made for up to two years after the delivery is completed.


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[Turtle]

Look up the Carmack Amendment. It establishes minimum time frames for filing a claim and for filing lawsuits for a denied claim. It's 9 months for filing a claim, and a minimum of no less than 2 years from the date of a denied claim. But there are plenty of exceptions. Generally, the time frame is specified on the BOL. That may be the physical BOL issued at the time of loading, or already having been issued in a house bill, or even in a written contract. If the carrier doesn't use published tariffs, there may not be a time limit at all in filing for a claim or a lawsuit. For any claim, the claimant must show three things; the goods were delivered to the carrier in good condition, that they arrived at the place of delivery in damaged condition, and that and that the amount of damages is measurable. That's known as a prima facie case of carrier liability. Once a plaintiff establishes a prima facie case under the Carmack Amendment, the carrier must then prove that it was not negligent or that the damage occurred from an unexpected cause (like an act of God, public enemy, an act of the shipper itself (which is why it's a really good idea to get a picture if you are loaded with damaged freight), or the inherent nature or vice of the goods (perishables that weren't marked perishable, etc).

In any case, the sooner a claim is filed the easier it is to establish a prima facie case.

As for keeping BOLs as defense for a potential claim, once the load pays out there's not much need in retaining the paperwork, since there are several legal copies of the same paperwork at the receiver and carrier. Carriers are required to keep bills of lading and supporting documents for one year (or one year from the disposition of unsettled freight papers, such as if a claim was filed or the bill is unpaid).

If you take possession of what appears to be damaged freight, the damage should certainly be marked on the BOL and pictures taken to show the condition of the freight at the time of loading, and I'd personally recommend you keep copies of those documents for a year or three.

 

[ATeam]

Thank you for your thorough reply, Turtle. One thought: It may be wise to retain your bills of lading after payment. While the motor carrier will have copies, it may be the motor carrier itself that charges you for a claim. While the claim may be made by a shipper and the motor carrier pays it, the carrier might help itself to your escrow money to recover the funds. If you cannot document that the freight was received in good condition, you may be the one who pays in the end. A signed bill of lading in which the consignee acknowledged the good condition of the freight would be a handy thing to have if the carrier decides to side with the claimant instead of the driver.

FedEx Custom Critical talked to us all the time about doing what's right for the customer. One of the reasons we so carefully kept our run paperwork, notes and photos was we felt they would happily burn us for the money for a damage claim after paying damage funds to a shipper. We felt the carrier valued the shipper's business more than they valued the services of a single team. We worried that they would more eagerly come after us for the money than they would vigorously defend us against the claim.

Thankfully, that was never tested because no shipper or consignee ever filed a claim on any load we hauled.