Getting a Handle on Loss and Damage Claims
Q: Why are loss and damage claims a challenge for shippers?
A: Global shippers face many challenges when it comes to managing loss and damage claims. The top three are a lack of knowledge about claims preparation and filing requirements (including documentation and time frames); a lack of resources to follow through on outstanding claims; and a lack of visibility into problem providers or locations.
Lack of knowledge about basic claims filing requirements is especially common. Unlike transportation providers, who are typically experienced in one specific mode, a global shipper has to be knowledgeable in multiple transportation modes. Different filing requirements exist for providers in various transportation modes, as well as contractual agreements that often differ from published requirements.
For example, the standard filing requirement for international air shipments is seven days from delivery; for international ocean shipments it is 12 months from delivery.
As far as documentation goes, some shippers may not know that supporting documentation must include a bill of lading or a delivery receipt that identifies the shipment, as well as an invoice that validates the filed amount.
Q: What can shippers do to more easily and efficiently handle claims?
A: It is difficult for shippers to perform the follow-up tasks necessary to track claims through completion without the right tools and resources. Access to the proper tools is a must. Shippers need a claims management program that allows complete visibility throughout the entire process from recording delivery exceptions (the pre-claims process), submitting the claim to the transportation provider, and recovery of the claim.
It is important to have a claims program that provides the business intelligence necessary to help leaders make informed decisions. Detailed reporting makes it easy to identify potential trends with problematic carriers, lanes, or product packaging—and that’s the first step in cutting down on future claims.
Q: What should shippers look for in a claims processing provider?
A: While working with professional service providers typically improves recovery time and collection amount, it can also be beneficial in terms of educating staff on the claims process. Many trade organizations and service providers offer seminars on claims handling or claims prevention. All shippers should take advantage of these opportunities.
While state-of-the-art claims management tools can vastly improve a company’s processes, education is critical and will empower the people using those tools to be even more effective.