[Request for Review of Claims Group's Disallowance of Freight Charge Refund Claim]

A firm requested a review of a Claims Group decision that disallowed a claim for refund of freight charges that the government recovered by setoff as unearned in connection with the shipment of a Marine Corps member's household goods. No exception to the condition of the goods was noted on delivery of the shipment; the first notice of damage in transit was a claim made 77 days after delivery. The firm's claim was based on the contention that, pursuant to a military-industry memorandum of understanding, damage was deemed not to have occurred in transit if the damage was not discovered within 45 days after delivery. The Corps cancelled the claim because damage was not discovered before the 45-day period expired. The Corps contended, however, that the 45-day reporting requirement applied only to a claim for damage to the shipment and failure to meet the requirement thus did not preclude a claim for unearned freight charges. Regulations applicable to the shipment provide that a common carrier of household goods shall not collect or retain freight charges on the portion of a shipment that was lost or destroyed in transit, however, the shipper bears the burden of proving that the carrier failed to deliver the same quantity or quality of goods. Loss or damage not discovered within 45 days of delivery is presumed not to have occurred in the carrier's possession in the absence of contrary evidence. The Corps had not presented any contrary evidence that irreparable damage occurred in transit. Accordingly, GAO found that the firm was entitled to a refund of the freight charges collected as unearned.