Freight claims are an inevitable and undesirable part of shipping because they mean something went wrong. But freight claims are the only way a shipper can get reimbursed for lost or damaged goods in transit. According to a report from uShip, a study found that 21% of U.S. adults who have bought a large item, such as a sofa, mattress, or treadmill, said the product arrived damaged, and 15% said the item never arrived at all. Furthermore, TCompanies, Inc. estimates that 25% of containers and trailers in the U.S. are damaged. Those percentages show how unpredictable the ecosystem of OS&D (over, short, and damaged) has become and why shippers need to have an in-depth understanding of freight claims.
The Importance of Documentation in Freight Claims
Freight claims documentation requires evidence of custody or, in other words, who was legally responsible when a shipment was damaged. Without that evidence, it is nearly impossible for shippers to get reimbursed for the damaged cargo. Considering the National Cargo Security Council estimates global cargo losses at $50 billion, there’s quite a bit of money on the table regarding freight claims.
The proof is in the paperwork, and shippers must stay on top of every document in the process to achieve a successful freight claim outcome. Knowing what is needed to proceed with a freight claim is the first step, so take a few moments to familiarize yourself with the following critical documents.
Delivery Documentation
As the title states, this is about the final step: delivery. This is a crucial part of the
process because these documents — which usually include a signed delivery receipt, drop trailer receipt, and receiving sheet — show proof of delivery to the consignee and whether or not the product left the shipper’s hands damaged, short, missing, or not in order. The receiver should state in these documents if there is any discrepancy.
Statement of Claim
If the delivery documents show a concern with a shipment, the statement of claim becomes the next step. This statement itemizes what was damaged or lost and its estimated value. It should also explain the claim circumstances — the who, what, when, and where of the shipment’s arrival.
Value Verification
The commercial invoice and bill of sale can provide a more detailed account of the costs associated with a damaged goods claim. A screenshot of the internal accounting page for that shipment will suffice if an invoice is unavailable. This documentation supports the value quoted in the statement of claim.
Photo Evidence
Upon arrival at the consignee, shippers and carriers should photograph any damaged cargo from a distance to capture the magnitude and from up close to show specific breakages.
Transportation Documentation
Once a claim filing is in motion, it’s crucial to collect all documentation of that shipment’s journey — the shipper and carrier information, the commodity shipped, the quantity, and the shipping terms. The bill of lading should contain all this information.
Misplacement of any of these documents can lead to unmet freight claims and huge losses in revenue. With outdated processes, shippers are leaving themselves and their customers open to risk when it comes to being reimbursed.
- With old-school physical processes, like filing cabinets and desks stacked with paperwork, documents can be compromised by damage (think spilled coffee) or lost. Trying to track down all that paperwork is hard to do in a fast-paced logistics environment.
- With outdated software programs, such as Windows Suite, Excel, and others, users can lose data easily, and sharing information can be cumbersome at best. But with the right technology partner, those concerns can be put in the past.
There’s a Better Way: Cloud-Based Documentation Strategies
Those vulnerabilities of the traditional documentation storage systems can float away when shippers link up with a new cloud-based documentation strategies partner. With a cloud-based software system, shippers can share vital freight claims documentation via the cloud. Reliable access to data can be easy and almost instantaneous. A centralized portal available to all logistics partners means no more worrying about version histories. It also creates a supply chain system in which all partners can access cloud-based documents around the globe. Document storage limits will no longer hound shippers as a cloud-based system can grow alongside your business.
Let Expert Partners Show You the Way
The formidable world of freight claims processing depends heavily on accurate documentation. Knowing your way around that world is the first step for shippers. But to navigate freight claims documentation, more smoothly, it’s best to have an expert partner with tools and platforms that make the journey easier. With Freightclaims.com experts and their easy-to-used, cloud-based software system on board, you can go further than ever before. For a demonstration, contact Freightclaims.com.
