CDS Logistics Blog
Here you'll find freight claim tips, logistics news, and tricks for reducing supply chain costs. Check back often, as we're always adding new posts.
Freight claim management is all about attention to nitty-gritty details. However, in this post, we’re going to step back and take a look at the big picture procedures that will take your recoveries to the next level.
1. Give Instructions to Each Department
It’s a common misconception – the idea that freight claim management is confined to the claims department. In reality, departments ranging from receiving to purchasing play an important role in ensuring that freight claims are paid and properly processed. For example, if the receiving department handles the paperwork or incoming shipment incorrectly, the claims department will be unable to collect reimbursement for the damaged shipment.
Therefore, it’s essential that you communicate each departments’ responsibilities toward freight claim management.
2. Streamline Claim Management with Pre-Written Forms
Although every claim is unique, the same set of steps will be repeated across claims, such as submitting the claim form, a request for inspection, or a follow-up if the carrier doesn’t respond to your claim.
Ensure that your claims staff aren’t wasting time by writing these requests from scratch each time. Be sure to provide your claims staff with stock letters, templates, and emails that they can use for each claim.
3. Create a Carrier Master Agreement
Unfortunately, most claims fail before they are even filed. Why? Because the carrier has written liability limitations right into their tariffs, and most shippers fail to negotiate better terms for themselves. This is why successfully negotiating an agreement that works in your favor will make it possible to recoup far more losses than if you’re shipping under the terms set out by the carrier.
4. Argue Declined Claims with Legal Evidence
Most claim clerks lack the training needed to argue against a carrier who declines their claim. This can result in the loss of thousands of dollars that could have been recovered with the proper legal argument. However, it doesn’t take a degree in transportation law to be able to effectively argue these claims. Usually it’s a simple matter of a few hours of training and some templates for arguing against the most common types of declinations.
5. Give Claims Staff Ongoing Training
Most businesses have a bias regarding which departments are eligible for training. Sales teams are sent to training workshops, and the manufacturing floor manager is encouraged to upgrade his Six Sigma certification. However, claims clerks are rarely given additional training, and as a result shippers miss out on tens or hundreds of thousands of dollars in recoveries. A monthly coaching program is an affordable way for staff to get advice on difficult claims while receiving training at the same time.
Want more information on how to implement these programs? Download our Freight Claim Assistance Program Brochure.
Shipment delays are a common experience. Your carrier tells you that your shipment will arrive by next Thursday, but it doesn’t arrive. Your shipment might be delayed for several days or weeks before it is actually delivered. The question is – can you be compensated for the shipment delay by filing a freight claim?
Unfortunately, there’s no cut and dry answer to this question.
What Encompasses a Shipment Delay?
There are two questions to ask when reviewing shipment delay claims:
1. Did the carrier deliver within “reasonable dispatch”?
2. Was it clear that the shipment had to be delivered by a particular time?
Shipment Delay Outside of Reasonable Dispatch
“Reasonable dispatch” refers to the amount of time that a shipment should reasonably take to deliver. A carrier may be required to reimburse you for damages if they took longer than a reasonable amount of time to deliver the shipment. If the carrier took longer than they initially told you, but they were still within reasonable dispatch, then they are generally not liable.
Shipment Delay with Required Delivery Time
There are some cases where your shipment becomes worthless if it is not delivered by a particular date and time. If you make this clear to the carrier and include it in your contract, then you are within your right to be compensated by the carrier for your loss caused by the delay.
The courts have favored cases like this, where seasonal merchandise was delayed to the point that it could not be sold until the following year. This is an example of a situation when the carrier may be found liable in the case of a shipping delay.
How to Protect Yourself from Shipment Delays
Keeping these things in mind, here are a few tips to protect yourself from a shipping delay:
- If it’s essential that your shipment is delivered by a certain date and time, make sure that this is clearly stated in your contract with the carrier.
- Find out what the reasonable dispatch is for your delivery. If the reasonable dispatch for the trip is greater than you can afford to wait for your shipment to be delivered, upgrade to a faster form of shipping.
One of the easiest things you can do to improve freight claim recovery is to take a couple minutes to ensure that the bill of lading is accurate.
After loading, when the driver hands you the bill of lading to sign, check for a note that says “Shipper’s Load and Count”, “SL&C” or “SLAC”. This note means that the shipper counted the packages and loaded the shipment, and the carrier was not present during loading to verify the count and condition of the shipment. This notation protects the carrier from liability for shortages or damages when they were not able to check the initial condition or amount of cargo.
However, if your driver was present during loading, make sure that he doesn’t sign the bill of lading with any of these notations. This will release the carrier from any liability for shortages or damages by stating that the driver wasn’t present (even if he was).
More importantly, if the driver adds anything to the freight bill that isn’t true or you don’t agree with, don’t sign it. It could save you a lot of trouble later.
In January 2015, shipments in both Canada and the US will be subject to new dimensional weight pricing. The pricing change will affect bulky but lightweight packages. Traditionally, as long as these packages were shipped by ground, and had a volume of less than 3 feet cubed, these packages were only charged by weight. However, with dimensional weight pricing, the volume of the package will also be taken into consideration, with larger packages being charged at higher rates, regardless of their weight.
The price change will occur across the board, with carriers such as FedEx, UPS, USPS, and Canada Post implementing the new pricing methods.
This will be a drastic change, with shipping prices for small and bulky items expected to increase by 20 – 60%. Therefore, it’s time to change your shipping practices.
Here are some tips for reducing shipping costs under the new dimensional weight pricing.
Stock More Box Sizes
It has been typical for small businesses to only carry a few sizes of boxes. The extra cost for shipping and void filler has been so minor that it was far lower than the cost of ordering and managing extra box sizes. With dimensional weight pricing, the reverse is true. Now it makes sense to keep extra sizes of boxes in stock in order to avoid increased shipping charges.
Build on Demand Boxes
Simply stocking a few extra sizes of boxes is the simplest and easiest solution for many small businesses. However, depending on the amount of parcel shipping you do, it may make sense to custom build each box to fit each product being shipped. Companies like Box on Demand
and Packsize are making this possible with machines that make custom sized boxes in-house, as they are needed.
Split Up Packages
Under the new shipping fee structure, it may be cheaper to ship 2 smaller packages instead of one large one. Be sure to create a chart or spreadsheet, or invest in software to help you determine your most cost-effective shipping option.
Zone skipping allows shippers to reduce the cost of parcel shipping by shipping several parcels by the truckload (or even by LTL) for the first part of the journey, and then finishing the journey via parcel shipping. For example, if you were shipping from North Dakota to several Southern states, you could ship a truckload of packages to Texas, and from there, utilize a parcel service such as FedEx or UPS to ship the packages to their final destinations in Arizona, California, and Louisiana. This solution is only possible if you are shipping high volumes of products.
Whatever strategy you use, make sure to keep an eye on your shipping methods and costs in the new year, or else you could see your extra shipping costs add up.