How We Saved Our Client $500,000

Here’s how we recovered $500,000 in claims expenses in just 6 months.

The Client

In 2012 CDS was retained by a Global Food Manufacturer to review their current freight claim procedures. As a company with hundreds of millions of dollars in sales, they did not feel that their freight claim procedures and collection process provided the expected return. Here is what their claims situation looked like prior to working with us:

  • They were filing less than $100,000 in claims per year
  • Over 3 years, they filed fewer than 100 claims

Problems in Freight Claim Procedures

We reviewed their denied and paid claims, as well as their freight claim procedures. We found that they were losing money due to several problems and inefficiencies:

  • There were no formal freight claim procedures to follow, preventing claims from being filed in a timely manner
    • This resulted in freight claims remaining open for 6 months to a year, restricting cash flow
    • Some freight claims were even being time barred based on the statute of limitations
  • Freight claims were not being filed for the correct amounts, leaving money on the table
  • Correct or complete freight claim documentation was not provided to the carriers
    • This resulted in freight claim payments being delayed or denied altogether
  • In spite of the fact that they were paying for a web-based claim solution, freight claims were still being filed manually
    • This meant that filing was more time consuming and costlier than necessary
    • This also meant that there was a lack of claim records to track the freight claim filing process

CDS’ New Freight Claim Procedures

CDS developed a set of formal freight claim procedures which included:

  • Implementing a process to ensure that the web-based freight claim management system was used for all claims
  • Developing forms and guidelines to ensure that the correct amount was claimed
    • For example, processes & check lists to determine what charges could be added to the invoice cost, as a part of the freight claim
  • Developing a freight claim check list to ensure complete documentation was included with the claim
  • Setting up a formal follow-up procedure
  • Providing examples of court rulings and precedents applying to their product line and shipments that would be used in challenging carrier declinations
    • This allows our client to continue to receive the most from their carriers, even without our ongoing help
  • Formalizing monthly and YTD reporting that identified root causes of freight claims
    • This allows us to reduce the number of claims filed annually
    • For example, these reports identified carriers, products and/or locations that were the cause of claims
  • Reopening freight claims that were underpaid and collecting additional dollars
  • Reopening freight claims that were denied to get them paid and resolved in our client’s favor

Results of the New Freight Claim Procedures

Here are the results of our new freight claim filing process:

  • We recovered over $500,000 in 6 months
  • In this time we filed 75 claims
  • Compared to their original collections, we increased claims recoveries by 1200%.

The areas for improvement that we identified were by no means unique to this company; we find similar patterns in many of the companies that we audit.

Looking for more information on our past results? Download our MyEZClaim Case Study.

Want to see how CDS can improve your own bottom line? Contact us to find out what we can do for you.