Overages, Shortages and Damages (OS&D)

What it means

Receivers count against the bill of lading, whose required contents include the names of consignor and consignee, origin and destination, the number of packages and a description of the freight.^[1] Any difference is written on the delivery receipt at the time of delivery. A missing whole package is a shortage (a loss), not damage, and is best noted separately.

Carrier tariffs make that notation important. FedEx Freight's rules tariff says a delivery accepted without written notice of damage on the delivery receipt is prima facie evidence the shipment arrived in good condition, and that visible loss or damage should be recorded in detail on the receipt.^[6]

But an OS&D notation is evidence, not a claim. Under the federal claim rules, bad order reports, shortage or damage notations on freight bills or delivery receipts, and carrier inspection reports do not, standing alone, meet the requirements for filing a claim.^[2]

What goes in an OS&D report

• Overage: more pieces than the bill of lading shows, or freight with no paperwork at all. Overages matter to carriers too: FedEx Freight's shipper-load terms say it will work with the shipper to use overages to offset its liability on valid shortage claims.^[6]
• Shortage: fewer handling units than shown. Note the count received against the count billed, such as "21 of 22 pallets received."
• Damage: what is damaged and how (crushed, wet, punctured), how many units, and whether the damage was visible at delivery or found later.
• Signatures and evidence: the driver's signature or initials beside the exception, photos taken before the freight is moved, and the trailer and seal numbers.

Count handling units, not just cartons. Under FedEx Freight's shipper-load-and-count terms, item and purchase order shortages are not treated as shortages against the carrier when the handling unit count matches what was signed for.^[6] See shipper load and count.

How to file a freight claim for a shortage

1. Write the exception at delivery. Note the shortage on the delivery receipt with the driver present.^[6]
2. File in writing, on time. Federal law bars a motor carrier from allowing less than 9 months to file a claim.^[5] FedEx Freight's tariff sets 9 months from delivery, or from the scheduled delivery date if nothing was delivered.^[6]
3. Include the minimum content. A claim must identify the shipment, assert the carrier's liability and ask for a specified or determinable amount of money.^[2] FedEx Freight also asks for shipper and recipient details, the freight bill number, an explanation, the amount and contact information, backed by documents such as invoices or repair estimates.^[6]
4. Track the carrier's deadlines. The carrier must acknowledge the claim in writing within 30 days, unless it pays or declines it in that time.^[3] It must pay, decline or make a firm compromise offer in writing within 120 days, or explain the delay then and every 60 days after.^[4]
5. Know the lawsuit window. A carrier cannot allow less than 2 years to sue, counted from its written notice disallowing the claim.^[5]

Liability under the Carmack Amendment is for the actual loss or injury to the property,^[5] subject to the carrier's tariff terms. More detail is in freight damage claims and Carmack Amendment.

Concealed damage claim time limit

Concealed damage is damage that could not be seen at delivery, such as crushed product inside an intact carton. The 9-month federal floor still applies to the claim itself,^[5] but carriers set shorter windows for reporting the discovery:

• FedEx Freight's general claim rule asks for notice as promptly as possible and in any event no later than 21 days after delivery. The carrier then inspects or waives inspection; if it waives, the consignee must inspect and record the details itself.^[6]
• Under the same tariff's shipper-load-and-count terms, concealed damage claims reported within 15 days of delivery are settled on the facts of the investigation.^[6]

Keep all cartons, inner and outer packing and contents until the claim is resolved; the tariff requires them to be available for inspection.^[6]

Why it matters

A clean delivery receipt is hard to argue with later, and a vague exception ("damaged") is weak evidence. When damaged freight is still sellable, sorting, re-boxing and repalletizing it keeps the loss down; RapidShips does that kind of freight rework at its East Brunswick, NJ dock.

Example

Illustrative only: a trailer delivers 22 pallets against 22 on the bill of lading, but two have crushed top tiers. The receiver writes "2 of 22 pallets damaged, top tier crushed" on the receipt, has the driver initial it, photographs both pallets and logs the damaged cartons by SKU on its OS&D report. Days later it finds broken units inside an intact pallet, reports concealed damage to the carrier that day, keeps the packaging and files one written claim with invoices.

Damaged freight and salvage

The claimant is expected to limit the loss. FedEx Freight's tariff says that where salvage has substantial value, the claimant should accept it and reduce the loss through repair or discounted sale; disposing of undamaged or cosmetically damaged product instead brings transportation charges plus a $5.00 per pound disposal cost. It also bars deducting a claim from freight charges without written authorization.^[6]

Frequently asked questions