Eliminating unnecessary costs is a crucial aspect to supply chain optimization. If you’re seeing a significant amount of freight damage in the shipments you send, it might be time to focus in on this potentially expensive area.
Although reliable industry-wide statistics are hard to come by, the National Cargo Security Council (NCSC) estimated at one point that the global financial impact of cargo loss exceeded $50 billion annually. Additionally, Packaging Digest estimates that as many as 11% of loads arrive with some kind of damage, with the average sitting at about 2%.
In addition to the obvious cost of damaged goods that you can no longer sell, freight damage also creates a ripple effect throughout your operation:
- First, there’s the cost of replacing the shipment for your customer, which might also include paying for expedited freight. Additionally, if losses continue, your customers may look to another supplier who can more reliably deliver freight in good condition.
- If you plan to claim the loss through insurance, you’ll lose the time and energy it takes your staff to handle the claim. Additionally, if you’re reporting a significant number of losses, you may end up looking at a rate increase.
- You’ll also have a significant number of administrative costs associated with the damage, including communicating with your customer, coordinating the replacement shipment, receiving the damaged freight, inspecting it, and deciding whether to repair it and/or re-sell the undamaged part of the load, among other tasks.
In other words, the costs associated with freight damage add up quickly—and can significantly impact your business’s financials.
To help you combat freight damage in your business, we turned to one of our in-house experts, Corky C., our Project Sales Manager, a 35-year veteran of the freight industry, with 11 years of experience in Hawaii freight forwarding. Below, you’ll find Corky’s four key tips for minimizing freight damage to save your business time, money, and hassle.
1. Start with the Right Material for the Job
Preventing freight damage begins with a simple—but crucial—concept: Make sure you’re using packing material that’s sturdy enough for your job. Cardboard boxes, shrink wrap, and packing tape all come in different sizes and strengths. It’s important to choose materials that match the specs of your load.
“Packaging can get expensive,” Corky said. “So some shippers try to cut corners by using material that’s not the proper gauge or strength to protect their product in transportation.”
However, at the end of the day, Corky noted, if you’re skimping on materials, it can mean that your product arrives in less-than-perfect condition. That will cost you more money in the long run. Instead, starting with proper packaging will solve a majority of freight damage issues—and, ultimately, save you money.
2. Palletize Your Shipments
If you’re not already palletizing your shipments, you might want to reconsider. Pallets are the best way to both ship your goods and transfer them from one facility to the next. In fact, according to Corky, palletizing your goods in standard-size cartons that are shrink-wrapped to a pallet makes for the best-case scenario for moving most products.
The exception? Items that are an unusual size, such as rolls of carpet. Those, he suggests, would be better off shrink-wrapped.
Pallets also play a big role in stabilizing loads that travel via ocean freight. “The movement on vessels is a little different than on trucks, trains, and even planes,” Corky said. “That consistent back-and-forth movement in an ocean container means it’s even more important to use proper packaging to prevent potential damage.” Pallets that are properly loaded add another level of stability to your goods in transit.
3. Watch for Feedback—Especially Where Concealed Damage Is Concerned
How do you know if you have a problem with either your shipping materials or your packing technique? Listen for complaints from your customers related to freight damage—and track them.
“If you’re getting a high level of damage complaints from your clients—or even refusals from transportation companies who won’t accept your product because it looks improperly packaged—it’s probably time to make a change,” Corky noted.
One of the areas in which you’ll want to be especially vigilant is concealed damage. In the case of concealed damage, problems aren’t noticed until after the shipment has been accepted. Often times, this can be because the exterior packaging doesn’t reveal any issues or evidence of mishandling. In many cases, concealed damage can be caused by improper internal packaging. (Check out our article on safe shipping practices to help avoid this situation.)
Ultimately, concealed damage can come back to haunt the shipper, who is usually responsible for making it right. If there’s no external proof of egregious abuse, such as obvious forklift damage, it’s hard to hold the transportation company moving the freight liable.
In other words, it all comes full circle: The right packaging, both interior and exterior, can make all the difference.
If you’re getting a significant number of customer complaints—or refusals to accept improperly packaged freight—there is someone you can turn to.
4. Establish a Relationship with an Experienced Partner
If you’re working with an experienced freight forwarder or 3PL, they can be an excellent resource for improving your packaging.
First and foremost, look for a partner who can spot packaging issues early in the process. The most innovative freight companies use a dimensioner, such as FreightSnap, when they receive shipments. In addition to calculating the size, cube, and weight of a shipment, it also snaps photos from all angles. At that point, the 3PL or forwarder can alert the shipper if it doesn’t look like the shipment is properly packaged.
“If we see a shipment that might cause an issue—such as a product that’s loaded too high, one that needs to be restacked, or one that needs to be rewrapped—our team will reach out to the shipper with photos, as well as our assessment and recommendations,” said Corky. If the client agrees, the team can repackage the freight in order to reduce the possibility of damage in transit.
Some experienced freight forwarders or 3PLs can also help with creative packaging solutions to prevent freight damage before the first load is packed. Corky recalled working with a shipper who was sending lengths of copper and aluminum pipe. Because they’re flexible, they tend to bend easily, creating creases in the pipes. Although it’s possible to work around these creases, it can be costly. Together, Approved and the shipper came up with a simple, low-cost solution that significantly stabilized the pipes to reduce the possibility of creases in transit.
“Our expertise isn’t in building a product or manufacturing it. Our expertise is in moving the product. So if a client has a new product line, we’re happy to offer our expertise in terms of packaging material,” Corky said. “We also answer a lot of questions from shippers in terms of hazmat requirements, especially since protocols differ between air, water, and land transport. We welcome all kinds of communication from both customers and potential customers in these arenas.”
Increasing Efficiencies, Saving Money
At the end of the day, anything shippers can do to reduce the possibility of freight damage will contribute significantly to a more efficient supply chain. Mitigating freight damage will not only reduce costs, but also save time and effort for many members of your organization. In other words, any investment you put into managing this potentially costly problem will be repaid many times over.
Interested in talking to one of our experts about reducing freight damage? Just schedule a free consultation to get started. We’d be happy to talk through your options and offer our expertise around packaging solutions.
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