Freight claims processes derive from a mountain of risks to cargo. Today, transportation and logistics companies face considerable uncertainty when moving freight. Driver speed, carelessness, outside influences, and everyday activities put freight at risk. Of course, the cost of these risks is not the merchandise alone. These activities affect fuel costs, lost opportunities to collect on on-time delivery, and, in addition to the problem of cargo theft, which costs more than $60 billion globally. When damage or cargo theft occurs, a freight claim must be filed, starting the process of identifying the issue and ensuring the respective carrier or individual with the liability for the shipment is held accountable and reimburses the shipper or consumer appropriately. Unfortunately, freight claims are incredibly complex, and any delay or inaccurately completed document could result in denial, notes a previous Cerasis white paper. Fortunately, shippers can streamline this process through the pairing of freight claims in TMS functionality.
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Challenges Arising From Inefficient Freight Claims Processes
Inefficient freight claims processes result in added expenses to freight spend. Shippers lose their profit margins for affected freight. Depending on the severity of the claim, shippers could lose a customer permanently. The deterioration of shipper-consumer relationships represents one of the most significant contributors to costs in inefficient freight claims management. Additional issues exist. For example, a carrier may decline payment on a freight claim that was submitted with the improper level of documentation or evidence to support payment on a shipment.
Unfortunately, unforeseen issues exist, and poor visibility within the transportation industry, such as a lack of real-time data for truck location and travel time, increase the risk of damage to or theft of cargo. In fact, the lack of data reflecting delays or damage to freight was used to support the release of the ELD mandate, notes FleetOwner magazine. Ultimately, a shipper’s cash flow is disrupted by inefficient freight claims processes, and it may be impossible to recover from negative consumer experience.
Effective Freight Claims in TMS Functionality Go Well Together
Optimizing freight claims and TMS functions to work seamlessly together eliminate many risks associated with damage claims processes. Shippers can use a TMS to track data for shipment status, identify routes that led to a problem, and avoid potential risks in their entirety. For example, integrated freight claims and TMS process could assess the costs associated with delays from traveling through adverse weather versus the cost of rerouting a shipment to avoid the risk. Since freight damage claims rely on data within the TMS, they can also be automated. As a result, reported damage would automatically trigger a series of workflows within the TMS to begin the claims process, reducing the delay between recognition of the issue and notifying a carrier. Since carriers have a highly regulated amount of time to respond, streamlining the process wherever possible ensures the fastest reimbursement possible.
How a TMS Streamlines Freight Claims
Using a TMS also streamlines the filing of claims in several other ways, including:
- Improved data capture regarding shipment details and information.
- Identification of delays or unforeseen issues resulting in concealed or damaged freight.
- Integrated freight claims and TMS functions optimize document management.
- Data-supported evidence eliminates all uncertainty regarding liability.
- Automation of carrier notification of concealed or damaged freight claim.
- Eliminates uncertainty regarding deadlines for filing of a claim or values.
- Provides a fast way to follow up with carriers regarding claims.
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Combining Freight Claims and TMS Functions Effectively Reduces the Reasons for Freight Claim Declinations
A comprehensive TMS should empower shippers with complete, end-to-end visibility in all operations. Freight claims must be included in this equation, so it makes sense to combine freight claims and TMS functions into the same platform. Furthermore, the benefits of combined features far outweigh the risks of maintaining operations through disparate systems and opening the door to additional risks, including freight claim declinations.