Tips on how to handle a fruit damage claim

So after working hard to cultivate and grow your produce, you identify your customer, stuff, load and ship off your container. Unfortunately, upon receipt, your are informed your container arrived with damages. Now you want to commence a claim against the responsible shipping line. Where do you begin?

What do the experts say?

After speaking with experienced claims handlers in various recovery agencies, it comes down to one thing: paying attention to details. The law on the responsibility of the carrier is clear. However, the facts surrounding the damage could need a closer look and that is why you need to pay very close attention to avoid losing your claim on a technicality.

Proof of quality of cargo at origin

To start off, for a shipping line to be responsible for damage to cargo, the cargo must have been in a better or good condition before it was entrusted to the shipping line. To satisfy this requirement, you may have to show evidence of the harvest date and accompanying quality certificates. Depending on the country of destination, a phytosanitary certificate and a certificate of origin may be required. In countries like South Africa and Peru, you may also require documentation from their perishable control boards.

Proof of quality of discharge

The causes of damage to perishables vary but in the main, temperature fluctuation and delays make up the majority of causes of damage to cargo. Their impact to the cargo may be apparent at discharge but not always. So you will be well advised to appoint an independent surveyor to confirm the cause and extent of damage to cargo at discharge. This is not always possible due to availability or unavailability of surveyors or pandemics like Covid 19. In such cases, you are encouraged to use mobile applications like Ukweli by which enables you to collect objective information about the quality and handling of your product.

Quantifying your loss

How much are you claiming for from the responsible carrier? The generally acceptable formula for quantifying loss is ASMV – ADMV. Arrived sound market value less the arrived damage market value. Although some times, the invoice value is considered rather than the arrived sound market value. Also, depending on when you are filing your claim, you may not have access to evidence of the arrived sound market value of your produce. Do ensure to keep clean salvage sale receipts as any proceeds you may have received for the damaged produce will be deducted from your overall claim.

Determine applicable law

Depending on your port of loading and port of discharge, different international conventions may apply to your case. Generally, these could be Hague/HagueVisby or Hamburg Rules. You also have the COGSA which is applicable in the US and the choice of law and jurisdiction clauses stipulated by the Bill of lading. These laws are deemed to be pro cargo or pro carrier interest. You will be in a better position if you understand these laws and then choose your forum to claim accordingly.

Take note of applicable time bar

Depending on the applicable law to your case, you may have a 1 or 2 years time bar within which to commence legal actions in relation to your claim. With the right kind of guidance and evidence, you should be able to settle your claim out of court. Remember that the prescription period starts counting from date of discharge or from the ETA date. Often, upon request, a time extension may be granted to extend your prescription period. Should you, for any reason, forget to request for such time extension within your prescription period, you may lose all rights to bring a legal action. This tends to happen all too often.

Submitting your claim

Once you have gone through all these considerations in your mind and have drafted your initial letter of claim, submit same to the liable carrier. Beware that claims cycles today could last up to 6 months! We do understand that handling claims is not your core business and that outsourcing same to lawyers or recovery agents can attract significant costs and loss of control. That is why we strongly recommend submitting your claim on CroP. All the above worries are handled automatically on your behalf.

Ship Safe!