When cargo damage is discovered, the most important thing is not to rush to settle it, but to preserve evidence immediately and avoid losing the basis for a claim.

I. Immediate Evidence Chain to Preserve

1.Written and video evidence: photos and videos

Take photos and videos of the damaged goods, outer packaging, the interior of the container, and the seal number.
Capture both wide-angle and close-up shots.
If possible, record a video explaining the time, location, bill of lading number, and the condition of the goods.
Using a camera with a timestamp or watermark is recommended.

2.Request a damage/shortage record before pickup

If damage, shortage, or moisture is found during pickup at the terminal or warehouse, immediately request a survey report, shortage report, or damage record from the tally company or shipping agent.
If possible, have the document signed and confirmed by the relevant party.
You may also note “goods damaged” on the delivery receipt when signing.

3.Third-party inspection: joint survey report

After reporting the loss to the insurer, a surveyor may be appointed to inspect the goods.
A joint inspection is often recommended, and the report issued on the spot is a key basis for claim settlement.

4.Internal and cost-related evidence

Keep the purchase contract, seller’s invoice, packing list, original bill of lading, and insurance policy copy.
Also keep records of any additional costs caused by the damage, such as temporary storage fees, sorting or rework costs, and inspection fees.

5.Record of follow-up and claim pursuit

Send a written claim letter to the carrier (such as the shipping line) by email and courier/registered mail, and keep copies of all correspondence.
If the carrier refuses the claim, keep the rejection letter, as it may be required when claiming from the insurer.

II. Claim Procedure

1. Immediate notice of loss

Report the loss to the insurer or its agent within 24 to 48 hours after arrival at the destination port.
After an oral notice, a written “Notice of Loss” is usually required within 24 hours.
Important: Do not discard the damaged goods or repair them before reporting the loss, as this may lead to claim rejection.

2. Apply for a joint survey

Within 1 to 3 days after reporting the claim, coordinate with the surveyor appointed by the insurer for a joint inspection.

Make sure the report clearly states:

  • the cause of the damage
  • whether it was due to moisture, impact, theft, etc.
  • the loss ratio or extent of damage

If the surveyor cannot attend immediately, you may, with written consent, first photograph and seal the samples, but retain the damaged goods for inspection.

3. Prepare and submit all claim documents

Submit the following documents within 7 to 15 days after inspection:

  • Claim form (stamped with the company seal, stating the amount of loss and the basis of calculation)
  • Original insurance policy or assigned policy
  • Transport documents (bill of lading)
  • Commercial documents (invoice, packing list)
  • Inspection report
  • Claim letter to the carrier and its response
  • Expense invoices (repair, sorting, temporary storage, etc.)

4. Start a “dual claim” process simultaneously

Submit the claim to the insurer.
At the same time, file a claim with the carrier.
This is important because, under applicable rules, if the buyer does not first pursue recovery from the carrier, the insurer may deduct the amount from the final settlement.

5. Sign the subrogation agreement and close the case

After the insurer pays the claim, it may require you to sign a subrogation agreement, transferring your rights of recovery against the liable party to the insurer.
If the damaged goods still have residual value, this value may be deducted from the settlement.

III. Important Notes for Claim Handling

1.Claim time limit

Foreign insurance policies often require claims to be made within one year from the date the goods are unloaded from the vessel.
If the deadline is missed, the insurer may deny liability.

2.Risk of refusing the goods

Unless the goods are a total loss and have no value, do not refuse the goods lightly.
Refusal may affect your insurable interest and may invalidate the insurance.
The correct approach is to receive the goods, preserve evidence, and then claim compensation.

3.Verify the insured amount

If the insured amount is lower than the CIF value, the insurer may pay only a proportionate amount.
It is important to confirm whether the insured amount is at least CIF value × 110%.

If seals are intact but the cargo is wet inside

If the container seal is intact but the goods inside are found wet, make sure to note on the delivery receipt:
“Seal intact; moisture found inside for an unknown reason.”

This can be crucial evidence to distinguish between external responsibility and inherent defects of the goods, and it may directly affect whether the insurer pays the claim.

The most important principle
When cargo damage occurs, the most important steps are: photograph immediately, preserve evidence, report the loss promptly, and then pursue the claim.