According to Packaging Digest, roughly 11% of all goods arrive at distribution centers with significant damage. This isn’t just a problem for customers and end-users — it affects carriers, shippers, and the industry as a whole. We process these issues with freight claims: a system of formal requests made by shippers to freight carriers for reimbursement on lost, damaged, or delayed shipments. While the system is as efficient as possible, shippers must have an effective freight claims management system if they want to ensure fair reimbursement for their claims while keeping administrative costs down.
But what if there were strategies they could employ on their end to help reduce damages?
Fortunately, preventing freight claims isn’t just about careful driving by carrier employees — shippers have the power to mitigate damage risks before packages are even in transit. They just need to take time to optimize loads and invest in the right software to help them do it.
The High Cost of Freight Claims and Damages
Freight claims can stem from any type of delay or product damaged during shipping, ranging from chipped edges to completely crushed packages, as well as stolen items or lost shipments. Even when carriers are at fault, the costs for shippers can quickly add up:
- Item replacement costs encompass any expenses to reimburse customers for the value of a product that’s not covered by insurance or the carrier if they’re found not at fault, including return shipping costs from damaged packages.
- Claim processing costs account for the indirect expenses shippers incur while making and managing a claim, including the hours and hours of labor needed for investigation and customer relations for each claim.
- Reputational damage refers to the impact freight claims can have on customer retention or negative word of mouth that deters business from new customers. Unfortunately, customers are more likely to associate package damage and bad experience with the shipper rather than the carrier.
Reducing Freight Claims Begins With Transportation Software
It’s true shippers have no direct control over how carriers handle their shipments, but there are a number of strategies to help reduce damage risks before items leave the warehouse. Shippers can reduce freight claim processes significantly with a mixture of physical improvements aimed at minimizing shipping damage during transit and handling. For example, optimizing receiving processes or better securing loads to prevent shifting can go a long way in reducing damage rates. But these strategies still leave many risks completely unchecked.
The latest transportation software can help shippers avoid damage even more effectively: by mitigating risk at the shipment planning phase. Some of the ways this can help include:
Load Planning and Optimization
Transportation and shipping software can generate more effective loading strategies than a manual approach can, especially in terms of palletization. Properly loading pallets minimizes movement and stress on the cargo during transit, ensuring each item is securely balanced to reduce risk of damage and allow workers to unload cargo efficiently.
Predictive Packing
With access to vital information about products, shipping software can recommend customized instructions like which is the most appropriately sized box for the order, what should go in the box, and handling instructions to minimize the risk of damage during transit. In addition to improving damage rates, this technology can help reduce packaging waste and optimize for cheaper freight classes.
Carrier Performance Monitoring
Transportation software gives users deep insight into the performance of each carrier, tracking key metrics like damage rates and on-time delivery rates. Having this insight during route planning can help shippers better prepare shipments based on past issues, or even steer clear of certain carriers altogether to avoid damage.
Streamline Freight Claims Management With 3G
Transportation software is a game changer for any company, but not all platforms come equipped with the features needed to run a fully modernized operation. 3G is different.
The platform serves as an end-to-end software suite that not only optimizes all aspects of over-the-road transportation, but also helps simplify more routine business processes, such as freight claims management. With 3G, users can easily streamline complex administrative tasks related to freight, ensuring smoother, more efficient operations from start to finish. What’s more, the platform’s advanced load planning, route optimization, and tracking capabilities can significantly reduce cargo damage and resulting freight claims.
Want to see how 3G can reduce your damage rate? Schedule a demo today.
