Freight claims management software should be an integral part of any shipper’s tech stack. To understand the power that this software can have, let’s take a closer look at what freight claims are, the impact of those claims on shippers, factors that affect the claims, and how software can provide use case solutions and reduce liabilities.
The global impact of cargo loss surpasses $50 billion annually, according to the National Cargo Security Council (NCSC). With losses like that, it’s not hard to see why freight claims can become quite costly and dig into or wipe out profits. A shipper files freight claims if goods are negatively affected as a result of mishaps during transport — goods that are damaged, lost, contaminated, or delayed. Damaged freight is an inevitable headache that comes with the business. Freight claims are a partial cure for that headache and are essential to ensure the shipper is not left on the hook for damaged or lost goods.
In the shipping industry, with over 15 million trucks operating in the U.S. alone, freight will inevitably be lost or damaged every once in a while. When it comes to a freight claim, the burden of proof lies with the shipper. Three conditions that must be validated to prove a claim:
Freight claims can lead to disagreements over the guilty party and the dollar value of the damage. While waiting to be reimbursed for damaged freight can be exhausting and frustrating, it is important to remember that the opposite sides of the claim are still partners in getting products to retailers or front doors.
With the volume in shipping reaching ever greater heights, freight claims will be doing the same. Suffering cargo losses and managing damaged freight claims are inevitable. Over the last few years, accidents have been disrupting supply chains for hundreds of U.S. retailers and manufacturers such as Amazon and Tesla.
More than 3,000 shipping containers dropped into the sea in 2020, according to Bloomberg. The ship ONE Apus lost over 1,800 containers in the Pacific Ocean in November of that year. At an average of $50,000 per container, the ONE Apus was estimated to have lost $90 million in cargo alone, the highest in recent history, according to Jai Sharma, a partner at maritime law firm Clyde & Co. in London. With a figure as high as $90 million lost in one accident, you can see that cargo loss is not just a drop in the ocean.
Without the organization, accuracy, and accompanying expertise of freight claims management software, shippers can find themselves paying for lost or damaged goods. And when the cost of damages can reach massive figures like those in the ONE Apus accident, a company’s economic future can be devastated.
Freight claims management software allows shippers quick access to resources that can help minimize the costs of claims. In addition to saving money for the business, it also allows the focus to be returned to the No. 1 objective — getting customers the goods they need on time.
While freight claims management software is essential during shipping crises, it’s also a must-have for everyday logistics operations. By focusing on a few key scenarios, Cargo Claims Solutions software can help shippers develop a broader understanding of potential applications for use case solutions.
Freight claims management software can help twofold in the area of extreme weather.
Each year, an estimated 25% (9.4 million) of the approximately 37.5 million containers and trailers transporting goods through numerous interchange points on each trip incur damage, said Tom Burke, CEO of TCompanies, the parent company of PEIRmobile. A survey from TCompanies found that 61% of the companies that paid for the damage said they did it because they couldn’t prove they weren’t responsible. The likely costs surpass $1.8 billion in the U.S. annually. It again demonstrates the costs can be high, especially if not enough attention is paid to all of the evidence needed to back up a claim. Software that can document, track and manage the three conditions of claims can help in proving those claims and saving the company money. The software can also provide future assistance by being able to locate the source of recurrent freight claims and optimizing logistical processes in warehouses and on the road.
A disturbing trend within the logistics industry shows that there has been a 52% increase in trucking accidents since 2009. Along with that, he Federal Motor Carrier Safety Administration authorized another extension of its hours-of-service waiver, which exempts certain maximum daily and weekly drive-time rules for any driver or trucking company providing direct assistance in support of the COVID-19 health emergency.
Freight managers need a way to keep on top of the costly shipping accidents stoked by these two factors. Without the streamlined communication between carriers, insurance reps, and logistics professionals provided by freight claims management software, shippers are susceptible to lengthy litigations. By partnering with a software provider, shippers can streamline communication to ensure that freight claims are addressed quickly and effectively, assuring all parties and building customer satisfaction.
Freight claims seem to be an ever-growing monster that eats up millions of dollars and creates just about as many worries for shippers. That’s where freight claims management software can come to the rescue. Not only can it help solve problems and keep up with issues in the here and now, it can also forecast ways to prevent claims issues from happening in the first place. To get on the path to saving some of that money and assuaging some of those worries, request a demonstration with Cargo Claims Solutions.
