There is a common misconception within freight management: freight claims processes apply only to damaged items. That is simply not true. Damage can have a ripple effect throughout the industry, reports Supply Chain Brain. The total cost of damaged goods can extend beyond any individual department or budget. This ripple effect further adds to the total cost of transportation. As a general rule of thumb, the typical freight damage claims filing process takes about two hours. If an employee makes approximately $10 per hour, that is an extra $20 expense on every process affecting freight claims. This scenario indicates a legacy process, requiring manual submission of an initiated claim, which ultimately detracts from what matters: spending more time with your customer. As such, shippers and logistics service providers (LSPs) need to know a few things about how freight damage claims technology can finally overcome this obstacle and enable optimization in claims processes too.
Why Do Legacy Freight Damage Claims Technology Processes Cost So Much
Legacy freight claims technology is a bit of a misnomer. By definition, legacy capabilities rely on manually-intensive processes. In other words, shippers have to physically enter the data, recognize when claims occur, collaborate with carriers, and process paperwork. It is an incredibly lengthy and burdensome process. Meanwhile, any problem within the freight claims process, such as an incorrect data point, could result in additional delays and denial of the freight damage claims. In today’s world, rejection is tantamount to never receiving reimbursement in the first place, primarily since many carriers operate on specific timelines for the submission and approval of such claims. However, modern technology is changing the process entirely.
Advancements Within Freight Management Technology Have Automated Claims Processes
Automation is a groundbreaking advancement in supply chain management, reducing or eliminating redundant, repetitive processes, especially in freight claims management. Further, the typical causes of damage and invoice errors are relatively simple and replicable. In other words, freight claims management is ripe for automation, allowing a transportation management system (TMS) to share data automatically with a carrier and submit freight claims. Some instances may require manual initiation. However, the distinction lies within a TMS capable of bringing that information to the forefront of the supply chain manager’s workload and ensuring all claims are filed correctly and with the appropriate carrier or LSP. That has a tremendous effect on reducing the total time it takes to process a claim and reducing the burden on carriers and LSP’s that need to process those claims.