Speed and care are the fundamental tenets of any successful shipping journey. But what happens when shipment damage threatens to derail schedules and consume transportation budgets? An efficient strategy can correct the shipment damage, but without it, shippers cause hits to their reputation and customer relationships—to say nothing of the additional monetary cost.
Shipments face damage risk from the moment goods leave a shipper to their arrival at a customer’s doorstep, especially in multimodal supply chains. However, resolving shipment damage is complex. The process calls for nuanced logistics management, between identifying damage and filing carrier claims. In this high-stakes, high-stress situation, the pressure on supply chain teams increases to address and correct any product imperfections quickly.
Customers expect timeliness and quality from their trade partners, even amid accidents. A speedy response to safeguard relationships and profits is paramount. There are tactics shippers can implement when there is unexpected damage to avoid an interruption in business.
True cost of shipment damage
From carrier negotiations to Incoterms management, the entire shipping process is full of challenges. But shipment damage is one misstep many shippers can’t afford. Damaged shipments threaten to contradict fundamental customer promises, altering arrival dates and the condition of purchases. Even beyond that, the consequences of damaged freight are wide-reaching:
- Shipper reputation
- Customer loyalty due to hidden freight costs
- Increased delivery times
- Extra labor costs
- Time-consuming logistics and carrier back-and-forths
Adding to that, shipment damage next-steps are not always understood. Consider this scenario: a manufacturer has just secured a large purchase order with a dream customer—an opportunity to establish credibility and future business opportunities. But the product is damaged on the way from Australia to the US. Now, supply chain managers must determine who caused the damage, who is responsible for coordinating a return or exchange, and whether a damage claim has been filed and approved, along with many other crucial considerations.
All shippers need a tried and tested shipment damage plan—large or small, domestic or international. However, organizations can take steps when damage occurs to prevent these downstream consequences.
Recognizing and resolving shipping obstacles
Accidents happen, and organizations must accept the reality that shipments could be damaged. More importantly, they must have the oversight, liability understanding, and support to quickly adapt. Shipment damage workflows should include the below steps to support efficient, intact deliveries—and ensure shippers only pay the required costs.
- Shippers need to identify when damage occurs and which carrier caused it. Visibility into the entire supply chain is needed, so shippers can find shipping hiccups as soon as possible to determine if damage occurred in the ocean, air, truck, or rail freight segment.
- Shippers must determine who is liable for damage in which leg of the journey: seller or buyer? International shipping agreements require a comprehensive understanding of the purchase’s Incoterms obligations. These will determine when shippers are responsible for costly shipment damage and when the obligation falls on the receiver of the goods. Deep contract understanding can save companies precious transport funds.
- Once shippers understand their liability, they must file a damage claim with the appropriate carrier. Technology can be invaluable in these efforts. Claims management support can optimize and accelerate the process through heightened visibility. This technology tracks claims in real time throughout the approval process and automates carrier notifications.
Technology and future of damage resolution
When supply chains stretch across oceans and nations, goods can get broken, scuffed, or lost. But a thorough claims management process and digital transformation can prove a welcome assist, especially for shippers with complex, international supply chains.
CTSI-Global offers logistics solutions designed to provide complete supply chain visibility and reduce the impact of shipment damage—so logistics teams can keep supply chains moving even in the most challenging circumstances. With logistics and carrier reporting, shippers can track open, in-progress, denied, and resolved loss or damage claims—and even identify which carriers damaged shipments.
Anticipate and overcome obstacles to your organization’s growth. Contact CTSI-Global today.