Shipping and logistics managers have to deal with many aspects of transportation management. After orders have already shipped and invoices sent, understanding freight claims management can become a critical factor in cost control.
Unfortunately, the problems seem to be growing for teams that manage damage and loss freight claims. For instance, cargo ships lost 661 containers at sea in 2022.
A freight claim represents a legal document filed to request and gain reimbursement for damaged and lost products. Freight claims can be managed externally by a third-party vendor who provides the service, or internally by employees of the shipping or courier company.
Freight claims management is vital to efficient operations within the supply chain, so it remains something worth considering. But first, let’s consider the top types of freight claims.
Common Issues Affecting Efficiency of Cargo Claims Management
Transportation technology revolutionizes freight movements and improves cargo handling across all lanes and modes. However, issues can still arise. Cargo claim filings that can occur as part of freight claims management include these five issues:
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- Visible damage remains the most commonly reported cargo claim. Any damage that can be easily seen upon receipt must be noted in great detail and recorded. A lack of information and facts to back up a damage claim can result in denial of the shipper’s claim.
- Loss occurs when documentation shows the carrier picked up a shipment order but did not deliver, such as when losing a container at sea. The shipper must note that no final delivery took place, even though documentation of pick-up and loading exists.
- Shortage in the shipment. Miscounts and missing parts often occur for more extensive and complicated orders. It’s essential to account for all pieces wherever their location and ensure that large orders have all items included. Items can fall off the truck or a pallet or be mistakenly delivered elsewhere, resulting in a shortage.
- Concealed damage when preliminary inspection misses damage to shipped items. Some damage is only detected once a package is opened and inspected more fully. Most carriers require notice within 5 days of delivery to allow for inspection. Hold onto the damaged freight or get an inspection waiver from the carrier.
- Managing the claim is complicated, too. The carrier bears the burden of preventing loss and damage while handling the order and managing the shipping process. The shipper primarily holds responsibility for filing paperwork, delivery, handling, and everything else that comes with freight claims management. A legal representative, often used by large companies and corporations, can also file a loss or damaged claim on behalf of the company.
Calculate your potential Saving While Using an enterprise TMS
It is easy to see how involved freight claims management can become. Knowing the types of damage to look for and what claims may occur can help enterprise shippers prepare.
The global freight market in a post-COVID world still changes and fluctuates rapidly. Meanwhile, the trends toward a greater emphasis on faster shipping execution will continue, forcing suppliers, carriers, and managers alike to embrace technology and innovation.
Automation and advanced platforms improve freight claims management and overall supply chain management.
Enhance Your Freight Claims Management Processes With the Right Technology
Of all the processes, systems, reports, and records that managers must track, freight claims management remains an essential part of the modern-day supply chain.
Ignoring freight claims and failing to follow up and address issues will not only end up costing the company money in the long run, but it will also severely damage brand reputation and destroy customer service satisfaction ratings.
A dedicated vendor experienced in freight claims management is the best answer to the freight claim dilemma. A robust TMS platform, embedded with claims processes and innovative methods, can make a huge difference in bottom-line profits. Find out how our freight claims management clients measure savings.
Be sure to watch our webinar for a closer look at how we can help you automate freight claims to reduce costs and protect your bottom line.
