One of the absolute worst things that you can hear from a customer, is "my product arrived damaged." Negative reviews online or by word of mouth can completely ruin a companies reputation.
In short, regardless of your industry, damaged freight can be a business killer!
For manufacturers, it can disrupt the efficient flow of your business. For retailers, it can destroy your ability to keep up with customer demands. And for the carriers... well, it may just be another huge client that removes themselves from your network!
And you would think that as far as we have come with technology over, let's say, the past 20 years, that we would have perfected shipping in this regard. Unfortunately, that just isn't the case. Sure, as an industry, we have minimized freight damage claims over the years.
But, we believe the logistics industry can do so much better at reducing freight damage.
So, in this blog post, we are going to explore the ways in which freight damage impacts a business. Even better, we are going to give you a few basic tips aimed at helping you get proactive about reducing freight damage in your own supply chain!
How Damaged Freight Impacts a Business
There are multiple ways that freight can become damaged while making its journey to your customer's doorstep.
Some of the leading causes of freight damage are on-road accidents, aggressive driving, improper packaging or packing materials being used, or freight being loaded incorrectly. Sometimes, it is related to just plain old simple neglect.
However, in the end, these problems usually carry with them the same, or similar results. Loss of reputation and profit alike! And in the worst-case scenarios, it can lead to years of turmoil and potentially the downfall of an entire company, if left unchecked.
Reduction of Steady Business
When freight is being delivered to a customer, they expect it to arrive intact, on time, and in the right condition. It is irrelevant to the customer that the freight may have been damaged in transportation by a different delivery service. Someone is to blame, and in the heat of the moment, they are going to look to the most likely suspect or even the first person they contact. Not all customers will be so quick to respond in such a way, but many will be.
In the end, the shipper or company who set up the shipment is the responsible party in the eyes of most customers. This usually never ends up in any positive light for the shipper. And the best way that consumers can retaliate is by simply no longer supporting the businesses that fail to meet their standards. This can lead to lost business, or customers choosing to work with your competitors.
Either way, it's not good!
Reduced Bottom Line Profit
In most cases, when a shipper files a damaged freight claim they are compensated for an estimated value of the products.
This price will likely include the raw materials, the cost of manufacturing, and in some cases, a wholesale value. In more drastic situations, such as when the goods are beyond repair, they must be destroyed. Yes, you can claim them at the end of the year, but the chances that you get their full value as a "write-off" is very slim.
In the end, you will lose money due to the need to destroy damaged products, as well as compensating the customer monetarily should they opt for a refund.
A few Tips for Reducing Freight Damage
That's a lot of doom and gloom above, isn't it?
But freight damage should not be a happy go lucky topic, anyway. It certainly should scare us as an industry.
Freight damage can quite easily make or break a business. This is especially true for those growing companies who simply can't afford to rectify such a large issue.
Here are a few basic, yet highly effective tips that you can put into practice immediately!
Always use new packing materials
Never use damaged packaging supplies with water damage, tears, or holes
Make sure all pallets are solid with no broken boards
Be proactive about securing all cargo. Use metal bands, shrink wrap, and strong materials to ensure the freight does not move while in transit.
Invest in high-quality labeling supplies. Correct placement of labels, especially those that indicate special handling procedures can significantly reduce freight damage.
Many companies ship hundreds of thousands of pallets every single year and never receive a single damaged freight claim. However, that is by no means the "norm", it is the exception!
To achieve such a feat, many of those successful supply chain giants work with experienced 3rd party logistics companies. If you are interested in reducing shrink, improving your bottom-line profits, and increasing customer service levels, it's worth your while to reach out to a proven 3PL – like Redwood Logistics!