The late William J. Augello, co-author of Freight Claims in Plain English, had a passion about this topic as few others have. According to Brent Primus of Logistics Management said:
“I believe that there are at least two reasons why Bill felt so strongly about the importance of understanding claims.
The first reason is financial. Unrecovered claims have a direct impact upon the bottom line of a company—and the tougher the economic times and thinner the margins the greater the impact. As depicted in the accompanying chart, if your company operates at a 5 percent profit margin, to recoup the net revenues that would be lost by failing to recover a $1,000 cargo claim, it would have to generate $20,000 in sales!
Second, Bill believed that this knowledge is vital for shippers because they’re on their own when it comes to claims. For carriers, whose core business is transportation, the processing of claims is an integral part of their business, and all but the smallest of carriers are quite knowledgeable and very competent when it comes to defending against claims. For most retailers, manufacturers, and distributors, the transportation function is an unwanted headache—and claims represent a migraine.”
At Cerasis, we provide comprehensive freight claims management. Why? It’s something all shippers, at some point, will eventually face. Sometimes this involves a huge damage or loss claim, sometimes it’s much more simple. We provided this service, as a value add service in addition to many other services because as shippers used our transportation management system, we found that one area that most shippers are the least knowledgeable in is that of claims for freight loss and damage. However, this does not mean that an understanding of claims isn’t vital to running an efficient transportation and logistics department.