At delivery: what you write on the receipt decides whether you have a claim
The two minutes while the driver waits for a signature matter most. If cartons are crushed, wet or distorted, if the seal has been disturbed or the count is wrong, write it in words on the delivery receipt or equipment interchange receipt, for example: three cartons crushed, one wet, two short, seal number differs from bill of lading. Add the date and time and ask the driver to countersign. If the driver refuses, write the remark anyway and photograph the driver, the plate number and the document. If the outside looks sound but you doubt the contents, write that the exterior appears in order and the contents are subject to inspection, never that the goods were received in good condition. Do not sign a clean receipt because you are in a hurry or wish to be polite. That clean receipt is the best defence the carrier will ever have.
Photograph in sequence: the container or truck as a whole with the seal number, the stow as the doors open, each damaged item with its outer packing, contents and label, and finally the goods as they sit in your warehouse. Video persuades better than stills because it shows the damage existed before unloading. Keep the damaged goods and the packing material exactly as they are. Do not unpack, discard or rework them, because the insurer's surveyor and the carrier's surveyor need to see the original state. For containerised cargo, photograph any holes, corrosion or water marks on the box itself. They help establish whether the container was defective or the cargo was badly stuffed, and that single distinction often decides which party ends up paying for the loss.
Send written notice of claim quickly: the period is counted in days
A remark on the receipt is only the first step. You must also give the carrier written notice of loss or damage within the period fixed by law and by the contract of carriage. That period is short and is counted in days, and for damage that is not apparent on delivery the period, running from delivery, is equally short. Sea, air and road carriage and forwarders' trading conditions each set their own period, so the exact number of days depends on the applicable law and on the terms printed on the bill or waybill. The safe practice is to send notice on the day of discovery or the next day and not to aim for the deadline. Apart from the notice period, the time for starting court or arbitration proceedings against a carrier is much shorter than for ordinary contract claims, so that clock deserves equal attention.
The notice does not have to be elaborate. State the bill or waybill number, the arrival date, the description and quantity of the affected goods, the nature of the damage, a statement that you reserve your right to claim, and an invitation to attend a joint survey. A precise figure is not needed yet; you may say the amount will follow once the survey is complete. Address it widely: the actual sea or air carrier, the forwarder you contracted with, the terminal or warehouse operator at destination and the trucker on the final leg, because at this point you do not know where the damage occurred. Send it by email with a read receipt and follow up important ones by courier. For who handles which leg see forwarder versus customs broker.
Who to claim from: where the damage probably happened, and who your contract is with
A consignment passes through many hands between the factory and your warehouse, and the right defendant depends on two things: the leg on which the damage most likely occurred, and the party with whom you have a contract. Goods that were badly stuffed, or packed too lightly for a normal voyage, point back to the seller or whoever loaded the container, and you must read the sale contract and the trade term to see where risk passed to you. An intact seal and a sound box with wet or collapsed cargo inside usually point to stuffing or to the goods themselves. A substituted seal or a holed container points to the sea leg or the terminal. Events after discharge, in the terminal, the yard, the freight station or on the inland truck, belong to the terminal operator, the warehouse or the trucking company.
If you booked door-to-door carriage through one forwarder, the forwarder is your counterparty. Having issued its house bill, it answers to you for the whole transit and then recovers from the actual carrier, so you do not need to chase each leg yourself. If a third-party logistics provider was storing or distributing the goods when the loss occurred, the rules on a custodian's liability apply; see using third-party logistics in the Philippines. Be prepared for one hard fact: a carrier's liability is normally capped by law or by contract, per package or by weight, and the cap can be far below the real value unless a value was declared and paid for at shipment. That is why cargo insurance is the real protection. For loss of stock held in a warehouse see warehouse fire or theft.
Using the insurance: notify, survey, document, subrogate
Where the cargo is insured, notify the insurer or the claims agent named on the policy for the destination port as soon as damage is found, and let it appoint a surveyor to inspect on site. Do not dispose of damaged goods before the surveyor arrives, but do take reasonable steps to stop the loss from growing, such as moving wet cartons to a dry area and separating sound goods from damaged ones. That is the insured's duty, and reasonable costs of doing so can normally be added to the claim. Confirm first who took out the policy and for which leg. On a cost, insurance and freight sale the seller usually insures and assigns the policy to you. On a free on board sale the buyer must insure, and many buyers discover only after a loss that the shipment was never covered.
The usual claim file consists of the policy or certificate, the bill of lading or waybill, the commercial invoice and packing list, the delivery receipt bearing your remarks, your notice of claim to the carrier with any reply, the survey report, a statement of loss and evidence of repair cost or salvage value. The notice to the carrier matters a great deal. After paying you, the insurer takes over your rights and pursues the party responsible. If the carrier has escaped liability because you failed to give timely notice, the insurer may reduce or refuse the claim on that ground. Once paid, you sign a subrogation form and the insurer carries on the recovery. Read the exclusions as well: insufficient packing, inherent vice of the goods and market loss caused by delay are commonly outside cover.
Without insurance: the realistic way to claim directly against the carrier
Being uninsured does not end the matter; it means you walk the whole road yourself. After the initial notice, follow up promptly with a formal claim letter that attaches all the evidence and states the amount and how it is calculated: invoice value of the goods, the proportion damaged or the cost of repair, less salvage, plus survey fees and other reasonable expenses. Consider paying an independent surveyor for a report. Its findings carry far more weight than your own photographs, and you should invite the carrier to attend and sign a joint survey if it will. Carriers typically reply by invoking the liability cap, alleging insufficient packing or pointing to the leg before or after their own. Answer each point with evidence, and keep watching the time bar throughout the exchange.
For modest amounts a discounted settlement is usually worth more than a lawsuit, and a forwarder with whom you have a long relationship may agree to settle by crediting future freight. If talks fail, the formal demand and the routes that follow are described in what a demand letter does and mediation, arbitration or court. Where you suspect pilferage in transit and not accidental damage, for example a substituted seal or a container emptied of part of its contents, report it to the police as well. The police report is a standard document in an insurance claim and the starting point for holding anyone responsible. Whatever route you take, do not add remarks to documents afterwards or inflate the loss. The consequences of a false claim are far worse than those of an unpaid one.
Losing less next time, and what Yixing can do
Damage in transit cannot be eliminated. What you can control is whether you are paid when it happens. Three things belong before shipment: confirm that every consignment is insured and know who arranged the cover and where it ends, pack for the mode of transport and not for the factory's habit and photograph the stuffing, and write the period of responsibility, the compensation basis and the notice method into your contracts with forwarders and logistics providers. At the receiving end, adopt a fixed routine: a named person receives, seals and exteriors are checked before unloading, exceptions are always written on the receipt, photographs and video are filed the same day, and notice goes out the same day. One page with this routine posted at the receiving dock costs far less than a lawyer afterwards. For high-value goods consider declaring the value or buying additional cover, and placing shock or humidity recorders inside the container.
Yixing Travel Consultancy (SEC Registration No. CS202009551, Bureau of Immigration Accredited Agency No. CA-202624381-1) offers compliance retainer services for foreign-owned companies in the Philippines: standard receiving and claims procedures, a review of the liability terms in your forwarder and logistics contracts, preparation of claim notices and evidence lists, and introductions to licensed customs brokers, surveyors and licensed counsel when needed. We are not an insurer, a carrier or a law firm and we do not promise any payout. If damaged cargo arrived today, do not move it and do not sign a clean receipt. Send us the photographs, the delivery receipt and the bill of lading, and get the notice out first. For your specific case consult a licensed lawyer; this article is not legal advice.
Frequently Asked Questions
The cartons arrived visibly damaged. Can I sign now and sort it out later?
Is there a deadline for notice of cargo damage?
Should I claim from the shipping line, the forwarder or the insurer?
Will the carrier pay the full value of the goods?
Can I still claim without cargo insurance?
May I dispose of or rework the damaged goods?
What if I suspect the goods were stolen in transit?
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