Logistics Lane: Cargo Claim Reduction

As Benjamin Franklin once said:

An ounce of prevention is worth a pound of cure.

These simple yet profound words can apply to every aspect of human life. In this case, they can apply to every aspect of transportation as well.

Over the past decade, we've seen an overall decrease in the number of cargo claims. There are several factors which attribute to this decline, the most prominent being the development of new and improved technologies.

A great example of this are the TMS (Transportation Management Systems). Most shippers, carriers and brokers nowadays are using some form of TMS in order acquire a greater degree of control over their business in the form of neatly storing data and automating once time-consuming tasks. When businesses are well-organized and utilize the right tools, the margin of error significantly decreases.

Even though modern technologies help reduce the number of cargo claims, they alone cannot make the problem of human error disappear completely.

What all parties need to focus on, in addition to technology, is the enforcement of procedures which are put in place to minimize risk.

Freight brokers, for instance, should not only focus on finding drivers to move shippers' freight. They must also help their shippers and carriers reduce risk of a claim by developing guidelines and having them enforced through mutual cooperation.

For example, freight brokers must be keenly aware of their shipper's needs as well as understand FMCSA rules and regulations to help spot and prevent potential issues over the road. Some products require special paperwork, packaging, distribution, temperature, etc.

Most brokers only focus on getting their assigned loads picked up, but there is much more to it than simply counting on the carrier and their insurance provider to deal with any issues. Especially ones that might have been prevented with a little bit of extra effort in the form of communication.

So, what can brokers do to help both their shippers and carriers reduce the number of claims they have to deal with?

1. Schedule deliveries well so that drivers are able to complete them within legal hours of service. It is key is to maintain good communication with the carrier to make sure that the driver is well and able to deliver the load safely.

2. Require drivers to confirm PO numbers, seal numbers, piece counts, temperature, product integrity and product security. Per the FMCSA, it is the shipper's job to carefully load the freight whereas it is the driver's job to make sure that it is well-secured before departing. Drivers should always be present during the loading process to verify everything is ready and safe for transit. Taking pictures and reporting discrepancies is something that every driver needs to do, and brokers need to make that clear from the start.

3. Ensuring that the paperwork and addresses are correct, especially for hazmat shipments which require an extra care. The broker must communicate with both the shipper and the driver to confirm that the right placards are being used and that the driver navigates through the correct routes.

4. Utilize automated tracking or perform check calls with ETA confirmation. This is to make sure that all parties are on the same page and that the load remains on track until delivered.

5. Upon delivery, brokers must request the signed bill of lading right away to confirm that the load was completed. If there is an issue, it is best to start working on resolving it right away, before the driver leaves. That way everything is recorded and everyone is treated fairly.

In conclusion, freight brokers must do their part to reduce the likelihood that the shipper and carrier will have to deal with a cargo claim that could have easily been prevented. Establishing guidelines and making the effort to enforce them is a small price to pay in exchange for saving your business partners' valuable time, money, and in some cases, the very future of their companies.

Masterfully Move Forward!