Protecting Your Shipments – How to Inspect & Accept Freight & Cargo Valuation

Accepting and Inspecting Freight and Cargo Valuation

How are the Processes of Accepting and Inspecting Freight and Cargo Valuation Related?

Valuation and the process of inspecting and accepting freight work together to ensure that goods are shipped and received safely, securely, and accurately. The process of inspecting and accepting freight involves examining shipments to ensure that they arrive at their destination complete and in good condition. Valuation is the process of determining the fair market value of the goods to ensure that they are adequately insured in the event of damage or loss during transit. By working together, these two processes ensure that goods are delivered in the same condition they were shipped in, and that customers have recourse in the unlikely event of damage or loss.

Best Practices for Inspecting and Accepting Freight

It’s important for a business to understand the proper procedures for inspecting and accepting freight. Having an effective process in place can ensure that goods are delivered in safe and acceptable condition. You are protected from being charged for items you did not receive or receiving items that have been damaged in transit.

Discovering any issues right away enables you to seek restitution. Here are some good practices when inspecting and accepting freight:

  1. Make sure that all necessary paperwork is included. Check invoices, bills of lading, and any other required documents.
  2. Verify the shipment against the packing list: Before accepting the shipment, it’s important to check that all items listed on the packing list have been received. This will help to identify discrepancies or loss. Note any discrepancies and inform the supplier of any issues. Important items to verify include:
    • Quantity
    • Size
    • Weight
    • Type of the items
  3. Inspect the condition of the outside freight. Look for any signs of damage or tampering, and if you find any, do not accept the shipment and document the issue. This includes looking for any dents, scratches, or other signs of mishandling.
  4. Inspect the inside of the freight: Once the outside of the freight is inspected, it is important to inspect the inside of the freight as well. This includes checking for any broken, missing, or damaged items.
  5. Check that the contents of the packages are correct. Make sure the items inside match the packing list.
  6. Document any issues found during the inspection process. Be as descriptive as possible. Include all damage to the item(s), and issues in the packaging (torn, absent or loose shipping boxes/cases and packing materials).
  7. Accept or reject the shipment. If there are no issues, accept the shipment. If there are issues or discrepancies, reject the shipment and report them immediately to the supplier or warehouse manager.

In most cases the shipment will be acceptable. At that point:

  • Sign the delivery receipt.
  • Secure the items and store them in an appropriate location.
  • Record the shipment in the company’s inventory system.
How do you seek restitution if the shipment is damage or items are missing?
This is where accurate cargo valuation is important.

Cargo valuation is the process of determining the estimated or actual value of goods being shipped and it reduces your risk of loss if a shipment is lost or damaged. It is a vital tool to make sure goods are sufficiently insured in the event of damage or loss while in transit.

The value of a shipment is determined by the cost of replacement, repair, or delivery of the goods. This includes the cost of insurance.

Cargo valuation is important for a number of reasons, including being able to accurately estimate shipping costs, knowing how much insurance to purchase, and ensuring an accurate inventory of goods. When valuing goods for shipping, factors such as the type of goods, their condition, and the cost of replacement are all taken into consideration. Finally, the shipper should factor in any special requirements that may apply to the shipment, such as additional paperwork or permits.

Inspection of items upon receipt from the carrier is a must for any facility. A thorough, organized process will help to prevent disputes between the buyer, seller, and shipper. Valuation plays a key role in the inspection and acceptance process. It helps to determine the value of goods in order to properly insure them against the rare occurrence of damage or theft if it is discovered during the inspection process.

The difference between cargo valuation and valuation coverage 

These two terms are used in shiping but refer to two different, but important things. As explained, cargo valuation is the process used to determine the value of goods being shipped and valuation coverage is one of your options to protect against losses that may occur during the shipping process and is offered by your shipping company. Cargo valuation is limited to the amount established by the shipping company and is not a guarantee of coverage for the value of the items being shipped. Insurance is the other option for protecting a shipment. It can provide actual coverage for the cost of repair or replacement, up to the amount of the policy.

Your Coverage Options in Case of Damage

Valuation Coverage

Valuation coverage is a coverage option offered by the shipper to protect the value of your belongings in the case of loss or damage. While it’s name is similar to Cargo Valuation, it different. It is a product while cargo valuation is a process.

It is a federal law that interstate shippers must offer customers two different liability options referred to as valuation coverage.

  • Limited liability (or Released Value Protection) valuation coverage is offered at no additional charge to you.Under this option, the shipper assumes liability for no more than 60 cents per pound per article. For example, if your shipper lost or damaged a 100 pound bookcase valued at $500, you would only receive $60.00 in compensation (60 cents x 100 pounds).You will be required to sign a specific statement on the bill of lading or contract agreeing to this level of valuation.
  • Declared Value (or Full Value Protection) coverage is offered at an additional cost to you.With this level of coverage, the shipper is liable for the replacement value of lost or damaged goods in your entire shipment. If any article is lost, destroyed, or damaged while in transit, your mover will, at its discretion, offer to do one (1) of the following for each item:
    • Repair the item.
    • Replace with a similar item.
    • Make a cash settlement for the cost of the repair or the current market replacement value.

    If this additional level coverage is desired, it is often more cost-effective to purchase it through your existing insurance agent. There are different levels of coverage under these plans, with various deductibles and details. For declared value protection, an inventory with an assigned value to each item must be created and given to your shipper.

    Remember – insurance and valuation coverage are separate and distinct options, which should never be obtained in conjunction with each other.


    At Sterling Corporation, we take freight transportation seriously. Our goal is to provide our customers with secure, reliable shipping of your high value items with the best customer service in the industry. We strive to deliver every item in the condition it is received, on time and on budget. Our systems are designed make sure that our customers are fully protected in the rare event of an accident or loss.