Trending Ways to Win at Freight Claims Management Practices

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The right set of freight claims management practices can mean the difference between saving money and unnecessary expenses. Shippers should understand the top trending best practices to succeed in freight claims management to stay competitive throughout 2019.

More Organizations, Including Governments, Will Demand Auditing in All Operations

One of the most effective ways to ensure freight claims management is working lies in understanding the value of the audit. More organizations are likely to turn to audits throughout 2019 to reduce the incidence of fraud and ensure accountability and supply chain management. Although freight claims management is typically associated with forward logistics, it will have a natural implication for reverse logistics as well. Shippers will look for audits to ensure products are returned in proper condition, especially when products are sent to a third-party form returns management.

Thorough Tracking of Shipments Reduces Unexpected Delays and Overcharges

The precise tracking of shipments is essential to effective freight claims management. Shippers should leverage the latest technology, including IoT-based sensors, Bluetooth, RFID, and AIDC technologies, to reduce delays and overcharges. Unfortunately, these technologies can do little good when mother nature strikes or another factor affects the delivery schedule. However, shippers with high-volume contracts may be able to recapture some freight spend through the enforcement of contracted rates, or reimbursements through a proper freight claims management program.

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Automated Freight Claims Management Practices Will Enable Better Recapture of Excess Charges

Now, it is impractical to audit every invoice by hand. This is where freight claims management automation can have a significant impact. Automated freight claims management review freight invoices and data reflecting the shipment to determine if the filing of a claim is warranted, is covered under the current cargo insurance, or other factors apply. As explained by SocialMediaToday, the rise of e-commerce will lead to greater automation of customer service, and for business-to-business relationships, this amounts to the use of automated controls to handle freight claims management practices.

This allows shippers to recapture excess freight spend and costs. In addition, recaptured spend has the net effect of keeping profitability alive, read, reducing product price points for consumers. It is a win-win-win.

More Companies Will Purchase Carrier Liability and Cargo Insurance

According to Jeff Berman of Logistics Management, the value of carrier liability and cargo insurance will expand in 2019. In fact, Macy’s has already taken additional steps to move away from carrier liability to cargo insurance for its rug business. Freight management often involves concerns regarding the impact on freight rate, pricing, capacity, availability and delivery windows. However, carrier liability is not the same thing as cargo insurance. Carrier liability refers to actions taken by a carrier that directly caused a problem or damage to the shipment.

Unfortunately, the Carmack amendment specifies in detail activities that are not covered by carrier liability. As a result, the greatest threats to a shipment, which have been floods and hurricanes in recent years, would have an exemption under the Carmack amendment. Therefore shippers may have lost property and value due to the storms, to the so-called “Act of God” clause of the Carmack amendment. As a result, it is practical for more shippers to purchase cargo insurance to ensure coverage for any non-covered events under carrier liability

Blockchain Technology Will Offer Additional Transparency and Accountability into Freight Claims Processes

Breakthroughs in freight claims management practices may be the creation of blockchain technology. As an incorruptible ledger, blockchain technology could be used to hold carriers accountable when their actions are not subject to the Carmack amendment and would otherwise be covered. However, the applications of blockchain technology will enhance transparency and accountability into the entire supply chain journey. As a result, shippers can rest assured and understand when events result in a delay or added expense. Furthermore, the use of blockchain technology will reduce the risk of fraud, which will help keep the costs of purchasing cargo insurance low for shippers.

Putting It All Together

Freight claims management practices are essential to reducing unnecessary freight spend. Unfortunately, problems may arise, and depending on the contract with the carrier, shippers may be on the hook for the full cost of products and delays to consumers. FedEx even offers a specialized service, “the Purple Promise,” which guarantees delivery on some shipments.

Unfortunately, all carriers can still claim an event was subject to the Carmack amendment, absolving them of liability. As uncertainty regarding government affairs and weather patterns continue, more shippers will look to cargo insurance to protect against damage to freight. In addition, more companies will outsource freight claims management to help their in-house staff give back to filling orders and moving product, which will have the added benefit of improving customer service levels.

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