This post is a continuance of an ongoing series about strategic shipping. After nearly 2 decades in business, we at Cerasis have found that those shippers we have helped stay strategic often are ahead of the curve with proactiveness. This proactiveness leads to a strategic mindset and also the avoidance of bottom line eating errors. Today we will discuss one of the 10 points from our post regarding strategic shipping to stay competitive: distressed shipments. We will expand upon most if not all of those points in this ongoing series.
6 Areas of Staying Strategic and Proactive with Distressed Shipments
Opportunities for errors abound throughout shipping processes. Sometimes, these errors lead to the failure to deliver a product on schedule, if the delivery even makes it to the recipient at all. When a shipment fails to meet the expectations for delivery, the shipment is considered to be distressed.
Distressed shipments account for the majority of insurance claims, returns of merchandise, and poor customer feedback among shipping entities. However, employing certain best practices for addressing distressed shipments can minimize their impact on consumers. As a result, the customer-company interaction remains positive, and the shipping company does not face the added criticism of failure to provide accurate service. Let’s take a look at the six best practices for managing distressed shipments.
Managing Driver Responsibilities
Drivers are the most influential factor in delivering a product in a timely manner. If a driver fails to meet standards, such as failure to pass state-mandated inspections or being prevented from leaving the loading dock on time, the expected time of delivery is pushed back. Shippers can address this problem by effectively managing driver responsibilities.
For example, the use of automatic logging systems and accountability tracking software can reduce the opportunities for driver problems. Furthermore, these systems allow drivers to focus on getting product from warehouse to the consumer. Another example could be the use of sealed loads prior to departure from a given distribution center or warehouse. Drivers should not sign off on a shippers load and count (SLC) form unless the load is actually sealed. This will prevent shipping errors, such as picking up an incomplete load.
Distressed shipments often occur due to poor weather or inaccurate route management. A shipper must ensure drivers have an up-to-date list of route directions to ensure appropriate, timely deliveries. Furthermore, shippers should avoid the temptation to require drivers to maintain a given route if another faster route can be identified. However, secondary routes should not pose a threat to the freight, i.e. the secondary should not cross state-lines if the initial route would have retained in-state transport.
Throughout shipment procedures, shippers need to know where their shipments are located, their current status of delivery, and how much time is currently required to get the shipment to the destination. This is achieved through the use of real-time key performance indicators (KPIs).
KPIs may include radio-frequency identification (RFID) chips, GPS-enabled tracking systems, and real-time alerts to possible problems. For example, a tire blowout should trigger an automatic notification to the shipper’s transportation management system. If the estimated repair time is longer than the estimated time to get another driver to the incident’s location, the shipper should consider deploying a second driver to pick up the shipment. Although this represents an added cost to the company, it will reduce the probability of dramatic impact and evolvement into a distressed shipment. At Cerasis, we have recently implemented real time tracking using the driver’s smart phone application. The notification is sent right to our TMS or freight brokerage team so we may easily give our shippers a heads up of any distressed shipments.
Use a Web-Based Transportation Management System
Some shippers may opt to use terminal-based transportation management systems (TMS). A TMS monitors all current shipping activity in terms of docking and loading times, departure status, distance to destination, and driver information. Unfortunately, terminal-based TMS systems have the drawback of not being able to account for multiple errors and events immediately.
When terminal-based systems are used, the chances of missing an update due to location issues becomes more prevalent. Alternatively, web-based TMS allows the shipper to access information from a given server on any shipment’s status information at any location with Internet access. This is vital to ensuring accurate, up-to-date information about a distressed shipment.
Delivery For Non-Available Deliveries
Modern delivery schedules rarely fall into perfect alignment with delivery recipients’ schedules. In many cases, this results in lost time during attempts to deliver a product to an undeliverable (not at location) recipient. Traditionally, this would immediately result in a distressed shipment; however, the issue can be addressed by improving communication between drivers and delivery recipients.
For example, the driver’s phone could send an automated message or call to the recipient to determine if the recipient will be available for delivery at the time of leaving a current delivery. If the communication results in a determination of a non-available recipient, the driver can make the decision to move forward to another delivery recipient in the route. On the other hand, the driver could use a lock-box, such as those offered by many postal services, to deliver the product on-time and advise the delivery recipient of the appropriate action to get their product.
Effective, Efficient Claims Process
Regardless of the strategies used to prevent distressed shipments from growing in severity, some distressed shipments will result in lost merchandise or revenue. In cases where an item was incorrectly delivered or not delivered at all, the shipper needs to have a specific, easy-to-understand claims process in place. This will make any possible insurance freight claims efficient and reduce the impact on future business dealings with a given recipient.
Similarly, some distressed shipments may result in a recipient canceling their order. If such action occurs, the shipper must be prepared to accept responsibility for the delay and its associated costs in transport. Some shippers may have specific rules for restocking fees and return-to-sender shipments; however, these policies should not be geared towards punishing the consumer if the shipping delay was the fault of the shipper.
While a distressed shipment-free world in shipping would be ideal, human factors will never allow this to be a possibility. However, improving technology and accountability throughout the shipping process through the use of these seven tips can reduce the number of distressed shipments and how distressed shipments impact a company’s profit margins. Until shipping becomes solely dependent on robotics, including robotically-controlled transport vehicles, shippers will need to educate their staff and personnel on these tactics.