Freight claims are a fundamental right that shippers have that allows them to file grievances against carriers concerning damaged products and goods they were responsible for shipping. Before the peak shipping season hits, logistics managers and transportation service providers alike need to catch up with the standard claims management trends that could impact their profits.
1. Freight Claims Will Continue Increasing Due to Increased E-Commerce
The first trend to accept is that claims are going to continue happening. They will likely occur more frequently as the peak season ramps up. The more freight that gets moved, the more chances exist for issues to arise. More customers are opting for e-commerce shopping services, revealing new pain points for the modern supply chain. Preparing for claims is a smart move for any shipper preparing for the coming busy season.
2. Carrier Capacity Constraints Will Increase Risk of Delivery Service Failures
Most companies have reached the point where they see freight claims as an integral part of customer service. A shipper can do a job well and do everything promised to the customer, but the real question happens when something goes wrong. As carrier capacity constraints intensify and become more challenging to work around, the focus must remain on delivery services and customer service.
3. Claims Management Will Further Add to Leading Overhead in Shipping
Freight claims are unavoidable and will happen at some point and time, so good claims management practices are essential. According to the Journal of Commerce, most damage and loss claims allow up to nine months from the date of delivery for a claim to be filed. With hundreds of thousands of orders getting shipped weekly, this can lead to many claims occurring in the future. Streamlining claims management is critical to successfully handle claims while keeping costs and overhead fees as low as possible.
4. The 2021 Peak Will Be Bigger and More Constrained Than Ever Before
With the drastic fluctuations the market has seen in the last year or two, it’s critical to understand how freight claims and shipping delays create a ripple effect in 2021. Small claims lead to more significant spikes and disruptions for shippers and carriers, especially during peak seasons. Thankfully, new technologies and automated systems can help with end-to-end shipment lifecycle operations for digital freight management.
5. Uncertainty in Weather Patterns Will Also Impact OTIF Deliveries, Resulting in More Freight Claims
Another factor that impacts transportation service providers and their ability to meet on time and in full (OTIF) delivery deadlines is the weather. Climate change and erratic weather patterns can lead to unexpected delays due to hazardous driving conditions. This can all lead to missed deliveries and damaged goods, leading to higher rates of claims. Preparing for severe weather is a must as peak season rolls around.
6. Increased Throughput Will Inherently Mean Increased Claims’ Rates
7. Automation Will Be Key to Timely Claims Management
Automation and technology are kings when it comes to claims management and supply chain operations. The shipping industry has gained benefits, including flexibility, scalability, and adaptability with automated systems and freight data integrations. For the logistics industry, the need for accurate, insightful, and actionable data cannot be underestimated. Successful claims management depends on intelligent data-driven processes and decisions, especially during times of extreme market volatility. Understanding the root cause of claims allows shippers to strategize on options to reduce claims.
Gain Control Over Freight Claims by Optimizing Your Network to Reduce Risk Today
Even when using the best practices and planning for disruptions as much as possible, issues will still arise, and claims will still occur. Reducing the frequency of claims and their impact is easier with the proper management system in place. That’s where having a real partner can make keeping up with current trends more accessible than ever.