Each year companies across the globe suffer in excess of $50 billion in losses from goods that are lost or damaged between the production floor and the consumer.
That’s $50 billion dollars that doesn’t go to product development, sales, marketing, or other initiatives designed to grow business. Instead, these dollars are going to replace goods, resolve claims, and restore confidence in the brand – your brand.
The remarkable thing is that, while many things in business are outside of your influence or control, freight damage claims are not. Damaged freight has been widely accepted as a cost of doing business, but it doesn’t have to be this way.
What are Freight Damage Claims?
Damaged freight claims arise when products arrive at their destination with visible damage; the damage is documented and acknowledged in the delivery paperwork, and a claim is filed.
There are a range of ways goods get damaged:
- Manmade and natural disasters
- Extended exposure to the elements
- Traffic accidents
- Improper stacking and shifting loads
- Punctures and spills
Determining how and when damage occurred is critical in establishing which party (the shipper or the carrier) may be liable. The cost of that liability depends on the reasonable measures required to mitigate the loss/damage.
(For information on the laws which govern the rights, duties and liabilities of shippers and carriers read about the Carmack Amendment.)
Shipper is the person or company who is usually the supplier or owner of commodities shipped, also called Consignor. Carrier is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport.
Mitigating the Costs of Freight Damage Claims
Producing goods for your customers takes resources, and when those goods are lost or damaged, the resources required to mitigate those losses through freight claims are exponentially greater than those involved in the initial manufacture of the lost goods.
This occurs as a result of moving beyond simply repairing or replacing the items, into the effort involved in processing and resolving a claim (some of which may not always be immediately apparent). Some of those costs involve:
- Workforce resources invested in processing claims (especially where that workforce would otherwise be applied to growing the business)
- Storage space that must be used to house damaged goods
- Salvage/disposal costs to process/remove damaged goods
- Cost to your brand/customer satisfaction
- Time-Sensitive loss from delayed delivery
Preventing Damaged Freight (and claims)
No matter who may be responsible for damage, the idea should be to prevent it. Don’t be afraid to spend a little more on packaging to prevent damage, to avoid spending more on it after the fact. Preventing damaged freight starts with:
- Selecting the proper packaging materials.
- Designing a packing process that takes into account how containers will be stacked/shipped.
- Packaging goods to anticipate impacts as much as the elements.
- And when in doubt about how best to package your goods, turning to an expert like Pioneer Packaging.
We offer durable and secure packaging solutions for retail, food, industrial, healthcare, and moving and storage. We also offer design and prototype services to ensure your products’ packaging is as protective as it should be. Contact us today to find out more.