It wouldn’t be a great stretch to think of freight claims as the elephant in the supply chain room. Freight claims filed by a shipper against a carrier if goods are damaged or lost in transport are that facet of shipping that people don’t usually want to discuss. Yet they know freight claims are an essential part of the shipping business.
Freight claims are becoming an even bigger elephant — maybe even a bull elephant — as increasing damages and costs threaten profit margins. This article provides a brief overview of freight claims and three ways a freight claims management platform can help shippers streamline processes and reduce headaches.
The Increasing Importance of Freight Claims
The volume of containers continues to rise, and that increasing quantity inevitably means some of those containers will get damaged. “We estimate that 25% of containers and trailers — or 9.4 million — are damaged,” said Tom Burke, CEO of TCompanies, which conducted a national survey on freight damages.
The survey found that 61% of the companies that paid for damage said they did so because they couldn’t prove they weren’t responsible. The likely costs surpass $1.8 billion in the U.S. annually.
More damage means more freight claims, and more freight claims mean more concerns for many logistics professionals who are unsure how to proceed with important claims. But they are in luck because there are ways that freight claims management platforms can help them streamline processes. Let’s closely look at three of those ways.
1. Optimize Document Management
Loss and damage are what most people immediately think of when the subject of freight claims comes up. But that is changing. Other, more complex types of freight claims are getting submitted with more regularity.
In a commentary for FreightWaves, Lina Jasutiene, the Founder & Managing Director of Recoupex, wrote: “We are seeing a surge of claims of a different nature from what we saw in the past, which was mostly cargo loss or damage.”
Now, the gamut of freight claims includes:
- Demurrage claims
- Abandoned cargo claims (in the case of freight forwarders)
- Repairs & maintenance claims
- Claims against additional and unexpected fees charged by shipping lines
“In the past, where a shipper may have simply paid for repackaging their products due to water ingress, they are now claiming these additional costs from shipping lines,” she wrote.
With damage or loss claims, all that is usually required is the bill of lading, but the other types of freight claims often need much more detailed paperwork. For example, demurrage freight claims should have documentation of the following:
- The constructive placement date and time
- Order-in date and time
- The actual placement date and time
- The release date and time
It’s easy to see that if shippers use manual processes for these, it can lead to misfiling and oversight. With outdated technology, there is also the possibility of poor communication — missed phone calls and endless email threads — that can result in missed Carmack Amendment deadlines.
Cloud-based document management systems can erase the days of manual processes and ensure that no important documents are lost. Shippers can store the bill of lading and other vital documents in a single location that everyone on the logistics team can easily access.
Improved carrier communication processes can streamline interaction and ensure you’re speaking to the right people through the proper channels.
2. Improve Analytics
Uncertainty has weaved its way into the fabric of the supply chain. Global conflicts (the war in Ukraine), labor issues (such as threats of a rail strike), and a worker shortage across the supply chain are adding to the strains on a system that is seeing more volume daily. All of this combined means damages are more likely, freight claims are rising, and logistics professionals are looking for any edge to improve operations to deal with all the strains.
Freight claims management software gives logistics professionals the help they need. It provides them with a bird’s-eye view of their cargo’s path. When exceptions occur, the new perspective can allow them to change operations to avoid them in the future. Improved analytics available through an intuitive, user-friendly freight claims management dashboard ensure logistics professionals understand all their freight claims and highlight when and where repeated mistakes occur.
3. Avoid Missed Deadlines
Assuring the company doesn’t miss any of the freight claims deadlines would seem like a simple task. In the freight claims world, missed deadlines are often far from simple. The Carmack Amendment statute of limitations says a carrier may not provide less than nine months to file a claim and less than two years to bring a civil action. The two limitations are the minimum amounts of time a carrier must allow for filing a claim and initiating legal action in court. But the rule of thumb is shippers must file the claim before reaching the nine-month limitation.
Miss that deadline, and you will be on the hook for the damaged freight. The outdated freight claims methods of spreadsheets and calendars increase the likelihood of a missed deadline. That does not have to be the case now because a cloud-based freight claims deadline tracker can ensure that logistics professionals meet the costly deadlines on time, every time.
FreightClaims.com Can Provide the Claims Help You Need
Adding in all the types of now-more-frequent freight claims, each with its own documentation needs, can raise that state of confusion and create distractions that lead to poor documentation or missed deadlines. The three instances above show how a freight claims management platform with cloud-based software can loosen that collar of chaos around a logistics professional’s neck and free time for other tasks.
FreightClaims.com has the ability and technology to allow you to do just that, helping you to:
- Submit claims
- Compile and store documents
- Clear communication lines
- Successfully make deadlines
- Utilize analytics that can spur improvement.
If that complete approach sounds like your cup of tea, take a sip today by requesting a free demo.
