Not all freight arrives 100 percent intact or as expected. When this happens, carriers and freight recipients may have disagreements or discrepancies over the OS&D report.
It’s important to know what OS&D means and what the OS&D claims process involves, so you’re equipped with the information to resolve potential issues.
What Is an OS&D Report?
To understand an OS&D report, you first need to know what that phrase means. OSD&D is an abbreviation meaning:
- Overage, indicating that the quantity of cargo received is greater or above what is noted in the shipping documentation. Any freight overage has to be managed by either being returned to a sender or incorporated into a recipient’s inventory and then billed as necessary.
- Shortage, indicating that the quantity of cargo is less than what is reported on the bill of lading (BOL). Any shortages also have to be managed, sometimes requiring order or fulfillment management adjustments or billing adjustments depending on a company’s policy or optimization strategy.
- Damaged, indicating that the product received was damaged. Damage can be either obvious or concealed — concealed damage indicates that part or all of a shipment wasn’t visible for inspection during the shipment or receiving processes. Most damaged shipments are accepted and documented, then reported in a freight claim for later compensation.
So, an OS&D report is an inspection report created and completed by a consignee or receiver for shipped materials. The OS&D report includes details about the goods they received, including whether the goods were received in incorrect quantities or damaged. The truck driver who delivered the goods and the consignee (usually via the supply chain manager or loading dock manager) receive a copy of each OS&D report.
An OS&D claim is a legal claim for financial compensation or adjustment in response to something noted in the OS&D report. For example, if a consignee discovers that some of their cargo was damaged in transit, they may file an OS&D claim with the shipping company or carrier to receive compensation for those damaged goods.
A consignee can file an OS&D claim instead of signing a bill of lading. Signing the bill of lading forfeits the receiver’s right to file an OS&D freight claim for a given issue in the future.
When Can a Claim Be Filed?
An OS&D claim can be filed within whatever period specified by the carrier’s contract or the tariff contracts defined by state and federal law. In most cases, receivers have nine months from delivery or shipment receipt to file a freight claim.
However, there are other situations in which different statutory deadlines may apply. For example:
- Concealed damage claims: receivers have 15 days from delivery to file.
- Lost shipment claims: receivers have up to nine months of the expected delivery date to file.
If a receiver tries to file an OS&D claim or freight claim after the claim period is over, it won’t be treated as valid, and they will not be able to recover any compensation.
What Types of OS&D Claims Are There?
There are a few different types of OS&D claims that a receiver or shipper may choose to file.
Shortage Claim
A shortage claim occurs if freight arrives not intact or if freight is missing or a quantity other than what is described on the bill of lading. For example, the receiver can file a shortage claim if a shipment arrives with freight in a lower quantity than expected.
Concealed Damage Claim
A concealed damage claim occurs if the consignee believes there was damage done to cargo in transit, but they didn't notice the damage until they received it. These claims can be difficult to recover damages for, as they usually require the consignee to sign the bill of lading before they file a claim.
For example, a consignee signs a bill of lading for a shipment of boxed goods. The driver leaves. Then they open the boxes and discover some of the cargo is damaged. They choose to file a concealed damage claim as a result.
Concealed Shortage Claim
A concealed shortage claim occurs if a receiver claims that the number of goods received it not match the number of goods marked in the bill of lading, but they only discovered this fact after signing the bill of lading. This is similar to a concealed damage claim because it's difficult for receivers to recover compensation for it.
Refused Claim
A consignee can refuse part or all of the shipment if they are unhappy with the state of the freight. They might do this because the wrong product was delivered or the freight was delivered damaged/significantly later than expected.
If a consignee refuses a shipment, the carrier decides whether to ship the freight back to the origin address, ship the freight to another address, or dispose of the product. A consignee only has five days to file a refused claim before the carrier that handles the shipment will likely deny it.
What Is the Carmack Amendment?
The Carmack Amendment is a 1906 adjustment to the Interstate Commerce Act of 1877. The ICA of 1877 regulates relationships between goods owners and shipping companies in interstate commerce.
The Carmack Amendment limits the liability of shipping companies or carriers by only allowing them to be liable for lost property or damaged property, not other damages.
In addition, the Carmack Amendment allows for five exceptions or exclusions that absorb carriers of damage liability. These are:
- Act of God – if cargo is damaged due to a natural disaster that can’t have been predicted, the carrier is exempt from claims.
- Act of War – similarly, if cargo is lost due to acts of war from a foreign military force, the carrier isn’t liable.
- Act of Default of Shipper – if a carrier can prove that cargo loss or damage occurred because of a mistake or negligence on the part of the shipper, they aren’t liable for damages.
- Public Authority – if damages or losses are because of the actions of the government authority.
- Nature of Goods – perishable goods naturally decay or are damaged over time. So long as the carrier takes appropriate steps to prevent damages or delays, they aren’t liable for any minor damage that is still incurred.
How To Get Reimbursed for a Claim
You'll need to prepare accordingly to get reimbursed for an OS&D claim. You’ll need to have several important documents, including:
- The original bill of lading
- A copy of the relevant freight bill
- An invoice that notes and documents the value of the goods, the repair or replacement bill, or both pieces of information
Next, you’ll want to notate or mark any quantity discrepancies or damage on the bill of lading. Take pictures of damaged freight, if applicable; the more pictures you have, the stronger your claim will be. Then store your freight in a safe area until your claim is approved.
You can then file your claim by submitting all this information to your carrier. If the carrier agrees, they’ll reimburse you for damages. As a shipper, you must prove that the losses or damages occurred as you say if you hope for reimbursement. Working with reputable, trustworthy carriers like RPM is always wise — OS&D claims are rare, and when they are filed, we take them seriously.
Conclusion
OS&D claims are sometimes necessary if you receive freight in poor condition or in a quantity other than what you expected. As a consignee or shipping customer, it’s your right to file an OS&D claim to recover compensation if you believe the freight company did a poor job.
But it’s also vital to fully understand OS&D claims and reports as a carrier or trucker. OS&D claims can significantly slow down your business processes and cost you time and money.
RPM has experience handling OS&D claims for truckers and freight customers alike. Our experienced personnel can help resolve issues and settle OS&D claims before they impact your bottom line. Contact us today to learn more.
Sources:
Carmack Amendment Definition | Investopedia
What is Over, Short, and damaged (OS&D) in logistics? | SCM EDU
Interstate Commerce Act (1887) | National Archives
