These days, the logistics industry is truly a global force. It drives or contributes to every marketplace, physical or digital, anywhere in the world. Modern supply chains span entire countries and multiple continents, calling on numerous carriers to transport materials from suppliers and manufacturers to countless customers, all in record time.
While our current system is indeed a marvel of technological innovation and progress, no system is perfect. Even packages and shipments electronically updated in real time can still be lost or misplaced (in real time). The insights that digital tracking capabilities have granted us are nothing short of remarkable, but they can also be a double-edged sword. Customers now have the ability to track their packages through every stage of the shipment process, and while that does indeed increase engagement with the product, it also creates higher expectations of delivery. And if those expectations aren’t met, the carriers have nowhere to hide.
This is where filing claims comes in. Parcel and freight claims can act as a restorative feedback mechanism to the shipping process, re-establishing trust and keeping relationships intact to ensure future business. It starts with the fact that all carriers acknowledge a certain level of responsibility for packages or shipments taken into their care. If those packages or shipments do not eventually arrive at their intended destination properly, the shipper can then file a claim with the carrier for the cost of the goods, and the carrier will pay the shipper back. Simple right?
Unfortunately, nothing is ever that easy. Here are some things to keep in mind when filing claims:
- Record Keeping: To protect themselves from false claims, carriers require a fair amount of documentation from shippers in order to even start the claim process. This can include requesting shipper/consignee information, customer invoices, written descriptions, the value of the merchandise, etc. While this is not information shippers always have on hand, luckily today’s technology is here to help. Automated logistics platforms can simplify this part of the process by storing all the necessary shipping information in a centralized, easy to access data hub.
- Timing: Delays happen during the shipping process, especially with larger freight shipments or international packages, but that doesn’t necessarily mean a package is lost. With this in mind, and also considering the costs of storing large amounts of data for long periods of time, both parcel and freight carriers have designated windows of time in which they allow shippers to file a claim. The shipper often needs to wait a certain number of days after the package is shipped to file the claim, but then they also only have a certain number of months after the item was shipped in which the carriers are liable for the package. The carriers do this to allow for delays, while also trying to make sure they don’t spend too much money storing data indefinitely. For shippers, pulling together the proper documentation is important, but it doesn’t mean much if you can’t keep track of each shipment’s filing window and then submit the claim appropriately.
- Filing: There are numerous options to choose from when it comes to carriers these days, from international giants to regional partners. Usually, the more choices one has, the better. But, when it comes to filing claims, this means navigating multiple online carrier portals all with different requirements for submission. The larger your supply chain grows, the more it pays to know your way around these complicated submission processes.
- Follow Up: Once the claim is properly submitted, in a timely manner, with accurate documentation, the process still isn’t complete just yet. The carriers all have internal processes they follow on their side to validate the package is actually lost before they will pay for the missing items, and those processes always take time. Following up with the carriers to ensure the proper steps are taken, not to mention making sure that payment is ultimately sent out and received in full, can often times be a full-time job.
Benefits of Filing Claims
So, is all that effort worth it? Simply put: Yes. The biggest reason for shippers to file claims is that it can generate a large (often times very large) amount of refunds for your company. If you’re not currently filing claims with all your carriers, or if you’re not doing it effectively, you’re absolutely leaving money on the table.
But there’s another benefit to filing claims, one that isn’t talked about as much. Filing claims can help repair and maintain your relationship with your carriers. Parcel and freight carriers are companies composed of real people, just like any other business. And just like everyone else, those people make mistakes. But unless the carriers are given the chance to learn from those mistakes and make them right, the relationship will suffer. Instead of resenting your current carriers for poor service and eventually switching to new ones every few years, break the cycle. Give them the feedback they need, along with the chance to make good on their promises.
When businesses focus on maintaining long-term relationships, everyone wins. You should consider your carriers as your partners in success, and you should give them the feedback they need for both of you to come out on top.
Brad A. McBride has been in the transportation industry for over 30 years. He founded Zero Down Supply Chain Solutions in 2003 after many years in high-level sales and operations roles in the logistics industry. In 2016, determined to make an impact on traditional industry practices and provide considerable savings for businesses, Brad also launched FreightOptics, the cutting-edge technology that provides one-login access to view and optimize all modes of transportation. Brad can be reached at firstname.lastname@example.org