Reducing Freight Damage

Through my 12 years in this industry no other topic has been brought up more often, nor with more passion, than the topic of concealed damage. Customers are distraught when they open a vendor order a week after delivery to find that it is completely destroyed, despite the intact box.

Shippers are perplexed when they get a call from a customer, asking for a new order at NO CHARGE! And motor carriers cannot understand how they can be expected to pay for something that was delivered free and clear weeks' prior.

My goal with this piece is to educate the general public about this distressing subject. My hope is that after this short article, everyone reading this will have a better idea of how to protect their company from dreaded freight damages.

First, I would like to explain some of the rules surrounding claims and filing statues. A lot of people think they have 15 days to file a claim for a concealed damage. There also seems to be a popular belief that if they do file a claim in that time frame, concealed or not, the claim should be paid in full, end of story.

But the Interstate Commerce Act (in the Carmack Amendment) states that a shipper has nine months to file a freight claim, damaged or otherwise. So you can take your sweet old time when filing a claim.

However, when it comes to damages, the person filing the claim is responsible for the "burden of proof." So the claim filer is basically guilty until proven innocent in a way.

When filing a claim, there are three factors involved:

a) That the shipment was tendered to the carrier in good condition.
b) That it was delivered in damaged condition.
c) The shipper suffered economic injury as a result of the damage.

Letters a) and c) are usually easy ones to come up with. But letter b) is the tricky one. How do you proof that your shipment was delivered in damaged condition? Well, the first and most important way is if the consignee signs for the freight with a remark about the damage on their delivery receipt.

When a consignee signs for something with damage, nothing counts more than specifically noting it on the delivery receipt. The remarks should say things like, "Bottom half of the box looks to have two pallet marks indenting and seems to be touching products" or "Big rip in middle of box with dented unit exposed".

DONT DO THIS: I have seen consignee's sign for everything saying "Subject to inspection". This will not fly. These people are better off not putting anything on their delivery receipts. The carrier is asking for proof of damage. They can easily pull all your other delivery receipts and prove that you put that on every DR.

If the damage is concealed and not noticed quick enough to note it on the delivery receipt, then the thing to do is to contact the carrier the second they notice it. If you call the local terminal that delivered the freight, they will send an inspector in right away.

We have seen concealed damage claims with clear delivery receipts that were paid in full because the consignee reacted quickly. However, we also have a tough time getting a 3rd of the claim if a few days go by, even if the damage was legitimate.

Remember, a bill of lading is a contract between the carrier and you. Claims can go to court if they are big enough. The longer the freight is the consignee's hands, the tougher it will be to convince an impartial jury that the damage has occurred while the carrier was transporting the goods.

What do we do?

For people where freight damage is a concern there are two things you can do. First, consider better packaging. This past year, one of my customers invested in hiring a packaging consultant to find better packaging practices.

Although they put some of their hard earned revenue dollars back into packaging, they have noticed a tremendous result. They have a dramatic decrease in damages, happier customers and a savings of man hours. People who were dealing with calling carriers, filing claims and writing letters are now focused on their core business.

The second thing you can do is to educate your customers on how to receive your product. Make sure they know how to properly note their delivery receipts of any damages. It might even be worth buying your bigger customers a cheap digital camera to keep on their receiving dock. Remember, the "burden of proof" is on you.

THIS IS A GREAT IDEA: One of my customers even sends a letter the day an order comes in. The letter runs down a quick three bullet check list of how they should receive and inspect the shipment when it arrives. That is a .50 cent way to educate your customers.

All of the customer service people at LMI are trained experts in the proper way to receive freight. You can contact them anytime for the rules or tips about claims and preventing damages. LMI can even visit our customer's customer service departments to better educate their customers about receiving freight.

Article by George Muha