Cargo Claims & OS&D for Freight Brokers: The 2026 Playbook
Sooner or later, a load arrives damaged or short. How you handle the claim decides whether you keep the account - and whether you stay out of the liability. Here's the process, the law, and your defense.
Damaged freight is not an "if," it's a "when." The brokers who survive it are the ones who understand the claims process, know where their liability actually sits, and have the paperwork to prove it. This guide walks through OS&D, the Carmack Amendment, the filing clock, and how to shield your brokerage.
What OS&D Actually Means
OS&D = Over, Short & Damaged. It's the language warehouses and carriers use the moment freight doesn't match the paperwork at delivery:
Over
More pieces arrived than the bill of lading lists - often a mis-sort from another shipment.
Short
Pieces are missing. Could be theft, a mis-load, or a partial delivery.
Damaged
Freight arrived broken, crushed, wet, or spoiled (huge in reefer loads).
The critical moment is delivery: the receiver must note the exception on the delivery receipt (POD) before signing clean. A clean signature with no notation makes a damage claim far harder to win. Coach your shippers and receivers to inspect and document before they sign.
The Carmack Amendment: Who's Actually Liable
The Carmack Amendment is the federal law governing cargo liability for interstate freight. The key point for you: it places liability for loss or damage on the carrier that physically hauls the freight - not on the broker. As a broker, you arrange transportation; you never take possession of the cargo, so you are generally not the liable party.
Where brokers get burned
You can create liability for yourself two ways: (1) negligent carrier selection - hiring a carrier you should have known was unsafe or uninsured, and (2) signing shipper contracts that make you liable "as a carrier" or guarantee the cargo. Read every shipper agreement and strike carrier-style liability language.
The Claim Clock: Deadlines You Must Know
| Milestone | Deadline (minimum) |
|---|---|
| File written claim with carrier | At least 9 months from delivery |
| Carrier acknowledges claim | Within 30 days of receipt |
| Carrier pays, denies, or offers settlement | Within 120 days |
| File lawsuit after denial | At least 2 years from denial |
These are the federal minimums; the bill of lading or carrier's contract may set the exact windows, so always check. Your job as broker is usually to facilitate the claim between shipper and carrier - keep it moving, keep records, and stay neutral but responsive.
The Claim Documentation Package
A claim lives or dies on paperwork. When OS&D happens, assemble:
- The signed bill of lading (BOL) showing what was tendered
- The delivery receipt / POD with the OS&D exception noted
- Photos of the damage and packaging
- The commercial invoice proving the cargo's value
- A repair/replacement estimate or salvage value
- The written claim stating the amount and basis
How to Protect Your Brokerage
1. Vet carriers before every load
Verify authority, safety rating, and active cargo insurance with enough limit for the load. This is your defense against negligent-selection claims.
2. Use a strong broker-carrier agreement
Spell out that the carrier is liable under Carmack and must maintain insurance naming required limits.
3. Carry contingent cargo + E&O insurance
Contingent cargo backstops a carrier's failed policy; E&O covers your own errors. Both are cheap relative to one bad claim.
4. Never sign "as a carrier"
Strike any shipper contract language that assigns you carrier-level cargo liability or guarantees the freight.
Strong carrier vetting is the foundation of claims defense. Learn the full process in the carrier sourcing & vetting guide, and make sure your coverage is right with the insurance breakdown.
Handle Claims Like a Pro
The course includes an interactive Claims & OS&D workflow, carrier vetting checklists, and a broker-carrier agreement template - for just $39.
Get the Course for $39