How Can Companies Prevent Damage to Products During Shipment?

MercuryGate Blog - Freight Category

Today supply chains face more risks than ever before in freight management. Weather-related Black Swan events appear to be growing in frequency and severity. Preliminary predictions for the 2020 hurricane season include four major hurricanes, says Lea Lane of Forbes, as well as up to 16 tropical storms. Meanwhile, the globe continues to face the coronavirus crisis, and supply chain disruption is everywhere. Such events increase the risk of damage to products during shipment, resulting from hurting operations, failure to consider shipment details and route information, and poor management. To avoid unnecessary loss and worsening of freight claims frequency, companies need to understand the primary causes of damage to products during shipment, how accountability can help prevent damage to products, and a few best practices for reducing the risk of damage in the first place.

Causes of Damage to Products During Transportation

Finding a way to prevent damage to products during shipment must be the priority of all supply chain professionals. Damage and loss to shipments can result from sloppy handling, theft, misrouting, mislabeling, and general poor planning. There are countless risks that may cause cargo loss, and some are outside of your control. As a result, it is up to each shipper to understand the true costs associated with losses and why preparation and mitigation of risks in advance can make a difference.

For example, a loss may be due to weather or other adverse events, but the true costs of freight damage or loss are much higher than realized. Take this example, explained by John Paul Hampstead via American Shipper:

“The cost of lost cargo can be enormous. Given the tight profit margins that prevail in the retail industry, a single lost shipment can represent a significant drag on profits. In the first quarter of 2019, Ralph Lauren (NYSE: RL) posted a net profit margin of 6.83 percent. If the company lost a shipment worth $100,000, it would take an additional $1.46 million in sales to pay for the lost shipment.”

Accountability and Data-Tracking Help Prevent Damage to Products During Shipping

The simplest way to prevent damage to products lies in delivering freight on time, avoiding the issue of misrouting, and ensuring accountability. More accountability and data-tracking throughout the freight management process provide a protective effect against freight loss. Remember that damage derives from a failure to consider all the factors, including the impact of adverse weather events, changes to domestic and international trade policies and procedures, and more. So, knowing more about what is happening in the world of logistics management can go a long way in preventing damage to products during shipping. In this way, the use of an advanced transportation management system (TMS) and next-generation technologies to improve freight management and visibility are the primary ways a shipper can prevent damage to products during shipping.

Additional Tips to Reduce and Prevent Damage to Products

Implementing a TMS sounds simple enough, but if simply using a basic TMS could prevent all damage, there would be no need for freight claims insurance, no need for improving visibility, and few freight claims in the first place. That is simply untrue. Instead, today shippers need to follow a few tips to reduce and prevent damage to products during shipping. Such tips include:
  • Managing freight by exception, recognizing when a problem presents itself that would cause a change in the route of the shipment and potentially lead to misrouting.
  • Validating all shipment data to ensure the appropriate address, trade Lane, driver, carrier, service level, and other insurance processes are handled correctly and labeled appropriately.
  • Recognize when a problem does arise, taking the steps to correct the action.
  • Changing company policies in tandem to reflect the state of the global logistics landscape, such as suspending guaranteed delivery or expedited services that are deemed non-essential.
  • Adopting TMS use across a whole organization, avoiding the issues of lost cargo deriving from poor planning, and keeping everyone accountable.

Minimize Risk and Prevent Damage to Products With a Transparent, Accessible Management Platform

The next black swan supply chain disruption is around the corner, and any disruption will always increase the risk of cargo loss and damage. Now is the time for shippers and logistics service professionals to rethink their risk management strategies and actively work to prevent damage to products with a transparent, actionable, and accessible TMS, such as the MercuryGate transportation management platform.

Request a MercuryGate demo online to get started.

Pete Celestina
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