Who pays for lost or damaged stock depends on where the loss happened: before the warehouse, inside it, in the carrier's hands or after delivery. Each stage has its own liable party, its own clock and its own evidence, and a claim sent to the wrong party or after its window closes gets denied.
A 3PL lost inventory claim runs under your warehouse contract: the 3PL is liable for stock and orders it loses or damages inside the warehouse, under the contract's standard of care, up to its liability cap, after any shrinkage allowance and within its notice window. Transit losses go to the carrier; as of October 2026, UPS, FedEx and USPS expect notice of damaged or missing contents within about 60 days.
Who's liable at each stage of an order?
Liability follows custody. Whoever held the goods when the problem happened owns the claim, so the first job is to find where in the chain it occurred.
| Stage | Who is usually liable | What decides it | Typical evidence |
|---|---|---|---|
| Inbound to the warehouse (supplier or freight carrier) | Freight carrier or supplier | Condition and count noted at receiving | Bill of lading, receiving photos, count sheet |
| Inside the warehouse (receiving, storage, pick, pack) | The 3PL, within the contract's liability terms | Contract: standard of care, cap, claim window | Cycle counts, pick and pack records, photo records |
| In transit to the customer | The parcel carrier, up to declared value | Carrier terms and the declared value | Tracking, delivery scan, photos of damage and packaging |
| After delivery (porch theft, wrong address entered) | The brand, unless a policy covers it | Your store policy and carrier terms | Delivery photo, customer message |
The two handoffs, dock to warehouse and warehouse to carrier, are where custody disputes sit, so the record of each moment decides who you claim against. Our staff photograph carts on the shipping floor, and the order page in Orderfy WMS shows a "Handed to" line with the carrier and the time, with a strip of photos under the parcels. Receiving has arrival photos as well, so the condition of an inbound delivery at our dock is on record before anything is put away.
A wrong or incomplete order sits with the 3PL, not the carrier, so the agreement should say who pays for the reship, the return and the fulfillment fee on the bad order. Ours settles the reship and the fee: if we ship a wrong or incomplete order, we reship it free and credit that order's fulfillment fee. The liability clauses to negotiate before you sign are in the 3PL contract negotiation guide.
How does a lost inventory claim against a 3PL work?
A 3PL inventory claim follows the warehouse agreement, not the carrier's terms. You give written notice within the contract's window, supply evidence of the discrepancy, and the 3PL reimburses up to the contractual limit.
Find the loss before you file. Line up the receiving count against your packing list, the cycle count history for the SKU, the adjustment log and the orders that shipped it. A unit counted in at receiving and missing at the next count is a warehouse loss; a unit that never appeared on the receiving count is a supplier or inbound freight claim.
The contract terms that set the payout:
- Liability cap: per pound, per unit or per claim. A cap far below your landed cost means you carry the difference.
- Valuation basis: landed cost is the fair standard, and retail value is rarely agreed to.
- Shrinkage allowance: some contracts tolerate a small percentage of inventory variance before any payout.
- Claim window: how many days you have to give written notice after a count or an audit.
- Insurance: what coverage the 3PL carries and what you should carry yourself. The 3PL's policy usually protects the 3PL, not the full value of your stock.
Get these terms in writing before you sign, and have a lawyer review the final agreement. This article is practical background, not legal advice.
What evidence wins a claim?
Evidence that shows the condition and count at each handoff wins claims, and missing evidence loses them. Keep these for every parcel and inventory discrepancy.
- Order record: order number, SKUs, quantities, the declared value and the date shipped.
- Pack-out proof: photo records of what was packed and how it left the building.
- Carton weight and size: the weight recorded at pack-out is the best check against a missing-contents claim.
- Tracking history: the full scan list, including the last scan and any exception.
- Damage photos: the outer box, the inner packing and the product, taken before anything is discarded.
- Packaging: the original box and filler. UPS and FedEx may ask to inspect them.
- Value proof: invoices that show what you paid for the goods.
- Receiving records: for inventory claims, the receiving count, cycle counts and variance reports.
Outbound orders are photographed on the cart before the carrier takes them, so a missing-contents dispute starts from photos taken before the carrier had the parcel. We also weigh every Shopify order and pack it in the right-size packaging, so each parcel has a pack-out weight to check a missing-contents claim against. If you also sell through FBA, the FBA reimbursements guide covers Amazon's own claim windows for stock lost or damaged at its fulfillment centers.
What are the carrier claim windows for UPS, FedEx and USPS?
All three carriers expect you to start a damage or missing-contents claim within roughly 60 days, and lost-package claims have longer outer limits. The table summarizes each carrier's own published terms as of October 2026. Terms change, so confirm on the carrier page before relying on them.
| Carrier | Damaged or missing contents | Lost package | Default liability or insurance | Source |
|---|---|---|---|---|
| UPS | Notice within 60 days after delivery (domestic) | Claim filed within nine months of scheduled delivery | Limited to $100 per domestic package unless a higher value is declared | UPS 2026 Terms, sections 55.3 and 56, UPS claims page |
| FedEx | File no later than 60 calendar days from the shipment date (US packages) | Within nine months of the shipment date | Declared value above the standard limit can be added, see the FedEx Service Guide | FedEx claims |
| USPS | No later than 60 calendar days from the mailing date | Priority Mail and Ground Advantage: no sooner than 15 days and no later than 60 days from mailing | Ground Advantage and Priority Mail include up to $100 insurance; more can be bought up to $5,000 | USPS Publication 122, February 2026, USPS Ground Advantage |
The clock for a damaged parcel starts at delivery or shipment, not when the customer complains, so your support team needs to forward damage reports within days. A default liability of $100 per package means high-value orders need declared value or separate shipping insurance, or a lost parcel is only partly recovered.
What does a claim recovery look like in numbers?
Filing speed and declared value decide most of the recovery. The figures are illustrative, not data from any provider. A brand ships 10,000 orders a month with an average landed product cost of $40 per order. Assume 0.5% of orders, or 50 parcels, arrive damaged or go missing in a month.
| Scenario | Landed cost per parcel | Parcels claimed in time | Recovered per month | Unrecovered per month |
|---|---|---|---|---|
| Every claim filed within the window | $40 | 50 of 50 | $2,000 | $0 |
| Half the claims filed late | $40 | 25 of 50 | $1,000 | $1,000 |
| Every claim filed in time, but order value is $180 and the carrier limit is the $100 default | $180 | 50 of 50 | $5,000 | $4,000 |
The last row shows the declared value effect: on a $180 order, a $100 default limit leaves $80 per lost parcel unrecovered. Over a year, the brand in the second row gives up $12,000 only by filing late. Set a daily routine: support forwards every damage or missing-parcel report the day it arrives, and whoever files claims works them that week.
How do you reduce claims in the first place?
Catch problems before they ship, and pack in a way that survives transit.
- Scan before the box closes. We scan every item when it's picked and check it again before the box is sealed. Even at 99.9% accuracy, about 10 orders in 10,000 can still go wrong, which is why the guarantee behind the number matters.
- Pack for the drop. Right-size the box, use enough fill and test a few pack-outs with a drop and compression test before a large run.
- Audit the warehouse. Counts and receiving records should match. The one-week warehouse audit shows how to run a blind count.
What we keep on record for a claim
Order accuracy runs at 99.9%, tracked in Orderfy WMS, the proprietary software we built in-house, and accuracy commitments can go into a written SLA with fee credits. The client portal shows each order at every stage, so when a parcel goes missing the handoff time and photos are already on the order page, and direct communication channels give your team 24/7 access to the people who packed it. Liability caps and notice windows for stock inside the warehouse are set in the services agreement, so read them as closely as the rates.
Frequently asked questions
The 3PL, up to the limits in your agreement. Warehouse contracts cap liability by weight, unit or claim and require written notice within a set period, so the payout can be lower than your landed cost. Check the cap, the valuation basis and the claim window before you sign.
As of October 2026, UPS requires notice within 60 days of delivery for damage and a filed claim within nine months for lost packages. FedEx requires damage or missing-contents claims within 60 calendar days of shipping and lost-package claims within nine months. USPS requires claims within 60 days of mailing.
The shipper of record files it, which can be the brand or the 3PL on the brand's behalf. Settle before you sign who files carrier claims, who pays any fee and how fast the paperwork reaches you. A good answer names the team that files, the fee if there is one, and a turnaround in days.
Declared value is the amount you tell the carrier the package is worth. UPS limits liability to $100 per domestic package without a declaration, and USPS Ground Advantage includes up to $100 insurance. Brands with higher-priced orders need to declare value or buy insurance to recover the full amount.
Yes, if your stock is worth more than the 3PL's liability cap. The 3PL's insurance typically protects the 3PL, and its liability to you may be capped far below the value of your stock. A broker can quote stock coverage that applies while goods sit at a third-party warehouse.