Freight Focus / Columns

FREIGHT FOCUS: Combating Concealed Damage

October 1, 2010
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Freight damage can lead to a great deal of extra expense for manufacturers, but an extra step may significantly reduce the number of damaged products.



Manufacturers and distributors whose product lines are susceptible to damage are generally very concerned about concealed damage. They feel defenseless against freight claims because the hidden damage is often not discovered until after the consignee received the freight. Their customer will receive the product but not discover the damage until they open the order, sometimes days or weeks later. The freight carrier is off the hook because the damage was discovered after the shipment was received with a clear delivery receipt. It's up to the shipper to make his customer happy by providing a refund or replacing the damaged product.

A Simple Solution

Several years ago, I had a customer who initiated a solution that drastically reduced the amount of freight claims and instances of concealed damages. The solution was to send a simple letter to their customers asking for their assistance in fighting freight damage. This customer was shipping products via less-than-truckload carriers to trade contractors who had zero knowledge of how to properly receive a shipment. Damages were a constant, everyday occurrence.

When an order came in, the company would send a notification out that would basically let their customers know that their order was being shipped. They explained in the letter that, due to the nature of their product, it was easily damaged in transit (even with a significant investment in packaging). Then they laid out a simple three-step process explaining how their customer could help lessen the likelihood of any problems.

The process outlined how to inspect the shipment and notate any damages or dings on the receiving document. The letter explained to thoroughly inspect all sides of the product and to open it up right away. It also told them out to write the specifics of what they found on the carrier's copy of the delivery receipt.

The end result was that this company's customers began delaying drivers by inspecting the shipments and marking up the delivery documents. Carriers were in a position where they were forced to pay claims and, in turn, they started to handle the freight more gingerly. The previously problematic concealed damage issue and revenue vacuum became a small problem that now occurs only once in a while.

Important Factors

I believe the main reason this solution worked so well is because a physical letter-not just an e-mail-went out to the customers. Something about getting information in the mail lets the customer know that this is something they should pay attention to.

Another important factor is that the shipper informed its customers of the damage issue that they have to deal with because of the nature of their product; this made the customer stay on alert. In addition, the shipper asked its customers to help them out. I believe customers are willing to help if they are simply asked to. The final key piece to this whole process was they outlined in a simple three-step process exactly what they wanted the customer to do.

Freight damage can be a huge burden for manufacturers, costing thousands of dollars and aggravating scores of customers. Sometimes just adding a simple extra step or asking for a customer to help can all but eliminate the problem. This is one solution that has a proven track record.

George Muha is vice president of Sales for CHTL Logistics. He hosts a blog at www.freightsavingstips.com and can be reached via e-mail at george@freightsavingstips.com.

SIDEBAR: Sample Letter

Sample Letter
This is not the exact letter my customer drew up, but this has the same theme. Feel free to use it (or parts of it) in your operation.*

Dear Mr./Ms. Customer,

I would like to thank you for choosing to order your products with ABC Company! Due to the sensitive nature of our products, I would like to ask your help in making sure the delivery of your order arrives safely. We have invested in some of the best packaging and safe freight carrier partners to ensure the best delivery possible. However, even with our efforts, there still can be damages.

To ensure a safe arrival, we ask that you follow a simple three-step process while our product is being delivered:
    1. Before you sign the carrier’s copy of the bill of lading, please thoroughly inspect the shipment for any signs of damage.
    2. Specifically notate any signs of damage on the bill of lading before you sign it. Even if there is no clear place to write these notes down, just make sure it is visible somewhere on the bill of lading.
    3. Refuse the product if it looks like the product is beyond repair, noting all damage on the delivery receipt.
Please contact us right away at (800) 555-5555 if there is damage so we can exchange any part of the product or replace the entire order.

Thanks again for your business!

Sincerely yours,

Joan Smith
Customer Service Supervisor


*If you do send this exact letter, make sure you have an arrangement with your carrier for instances when your customers do refuse freight.

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