You are a Warehouse Manager that ships Heavy Industrial Products, you want to know how to avoid retail chargebacks, freight claims, damage claims and rejected loads using LoadProof
Vice President – Operations
Capture the conditions of the loads you ship and share it with your customer through automated email's. Take photos of every product, pallet, and truck along with the packaging conditions such as shrink wrapping, addition of dunnage bags, stretch wrapping, etc., and win the trust of your customers.
Avoid Costly Freight Claims, Chargebacks, and Concealed Shortages and Damages with the Centralized Photo Documentation Solution - LoadProof
Director of Logistics
Continuous Improvement Engineer
All of these folks ship Heavy Industrial Expensive Products, some customer examples are
- Daikin Applied – Ship very expensive HVAC Equipment – to large commercial builds such as Offices, Hospitals, Schools
- Bosch – Ships Automotive products to other OEM Auto makers – Fuel Injection Pumps, Bosch Spark Plugs, Engine Management, Ignition Parts, Batteries all kinds of Auto Parts
- Sealed Air – Air Bag machinery to Distribution Centers
- NCR – Point of Sale Systems for Retail Stores, Point of Sales Systems for Gas Stations that connect with the Gas Pumps
- Stryker – Hospital Beds
- Manufacture, Assemble and Ship all these heavy industrial products on time and to the right place in perfect condition so the deployment of these heavy industrial products can be done smoothly as part of construction or starting up new facilities that is already going on
- If you really think about it, these are products that are purchased out of somebody’s capital projects and budgets. So somebody is investing big time building large buildings or gas stations or making automotive products that consumers need to buy, or a Distribution Center is going live or for example hospitals, if these beds don’t reach on time to hospitals, people cannot get treated, people might even die
- So it is very important as a Warehouse Manager you do your part of the job thoroughly and deliver them on time. Obviously not only do the job and also keep proof that you did your job right to show it to other parties in the Supply Chain
- So when your products arrive on time, the other resources, tools, experts that are needed to finish the construction project or other projects finish their part and complete the project on time
- Let us say this is an expensive HVAC system for a large building, you did your job great, you thought, hey we perfectly tested the product, we perfectly packed it, we perfectly assembled whatever we can assemble here at the DC or at the factory then you shipped everything with the correct check list, correct sub assembly components, you did everything great and you thought, everything is going to be great.
- You handed it off to the carrier, flatbed truck or whatever it is, and you breathed a big sigh of relief
- But when the product arrived at the project site, it was damaged, it had scratches in them, it had had one part broken, or somehow somebody missed a bunch of cables now they cannot complete the installation of this product, now they are pointing fingers at you and saying – Hey the warehouse missed this
- You did a great job, you had the best team, best people, best processes, best everything, in spite of it you are getting blamed for this, now you look like you don’t know what you are doing
- Sometimes there are also penalty clauses if the product does not arrive on time at the right place, you will have to pay penalties also
- Also prior to shipping, when you are manufacturing or building your HVAC system as there are other parallel projects going on, for example construction, or another vendor building another set of products for the same building construction, installation, you will have to show progress as to how the product you are building is coming along, so the other teams can be sure of making the dates, or if there is any adjustments that need to be made, they can do those adjustments as well. So as part of proving those updates, you will have to provide pictures to demonstrate the progress that you are making with that heavy industrial product
- As a warehouse manager, you are responsible for the following
- The warehouse manager leads and coordinates all aspects of the distribution process within the Supply Chain network.
- Leads site’s planning, execution, and communication of all daily clerical and operational processes, including:
- Labor Planning & Driver Management
- OSHA, FDA and DOT Compliance
- General Administrative Duties
- Employee hiring
- Customer Service Responsibilities
- Human Resource Administration
- Product Functionality Checks and Cleaning
- Warehouse Functions/ Servant Leadership
- Load Planning, Routing, and Carrier Management
- Collection/Reporting of KPI data
Sometimes you are responsible for the P&L of the site as well
- If you are shipping products that need some kind of an FDA approval – then you have to keep all the related documentation for up to 12 years, depending upon the product it could be 3 years, 7 years or 12 years the duration differs
Your Supply Chain Community
Your Supply Chain community comprises of people that you do business with, usually it is made of all these people
- Manufacturers that manufacture products
- Trucking companies
- Ocean Carriers
- Rail Carriers
- Air Carriers
- Multi modal – Ocean, Land, Rail, Air
- Third Party Logistics Service Providers
- Vendors that you buy your products from
- Cross Dock Facility operators
- Consolidation Facility operators
- LTL Terminals
- Parcel Carriers
- Delivery Companies
- Freight Forwarders
- Freight Brokers
It is very important to keep in mind that you will work with all these people on a regular basis, so build and maintain professional relationships. While shipping products, moving products mistakes do happen, sometimes it is theirs, sometimes it is yours, whatever it is work with your partners, keep proof in LoadProof to demonstrate that you did your job right. So, you can have a professional conversation and articulate your position in a professional way, it is okay to say in a very professional and gentle manner, “Hey it is not fair for us to pay for mistakes that is not ours, here is a proof in the form of pictures”. However, do not burn bridges everybody is working very hard to make it for themselves. Also, people move on and change roles very quickly in this industry, so the same person could take up a different role and you might face them in a completely different side. So always build and maintain professional relationships, do not burn bridges. So, when you are working with such a community of Supply Chain service providers, having LoadProof and pictures to prove that you did your job right, gives you a solid ground to stand on, when something happens to your shipment.
- You are losing dollars due to freight claims
- You are losing money on damages, your customers are submitting damage claims
- You are losing money on rejected loads
- So, you started taking photos in your official Digital camera
- Some of your people started taking photos in their personal cell phones but the process had the following drawbacks
- Take photos in a device, either a digital camera or a smart phone
- Then you have to save the photos somewhere in a Google drive or Shared drive or Shared Folder
- Then manually have to search the photos to find the right ones when there are any questions
- Cumbersome to copy the photos from the camera
- Time consuming to organize photos for future reference
- No back up for the photos – What if your computer suddenly crashed?
- No visibility across the Supply Chain – Other operators in the Supply Chain cannot see the pictures – your vendors, customers, carriers, lumpers, personnel at the cross dock facility, insurance companies cannot see them
What is a Freight Claim?
You shipped your product through a carrier to your customer. The carrier failed to deliver the product in a perfect manner, it was not delivered in the same condition as it left your facility. And often the carriers insure these transportation moves. So, if there is a problem or if there is an act of god, for example thunderstorm or a tornado or any natural disaster that damaged your shipment you can file a claim to the Carrier and then get compensated. We are actually a partner with Mercury Gate My Ez Claims, so if you have pictures in LoadProof and you are already using My Ez Claim, you can automatically pull the pictures from LoadProof into My Ez Claim and submit those pictures to the Carrier along with your Freight Claim. That makes getting compensated by the carrier easier. Because these shipments are insured, often the insurance companies get involved and you know what happens when an insurance company is involved, you got to submit all kinds of proof to prove that the shipment left your facility in perfect condition, that is where LoadProof comes in, using LoadProof you can exactly do that. You can take 1000s of pictures and within no time you can find those pictures and share them with whoever you need to share them with.
This could get really complicated if you did not pay for the transportation, which means you don’t have a contract with the carrier and you cannot even talk to them. Typically, this happens when you ship to a retailer, a retailer will often take advantage of the economies of scale and get their own carrier and the carrier will come to your facility and pick up the products. In that case if there is a damage then you really have to talk to the retailer and if they are one of those big retailers, and if you are small supplier, the 3PLs can help.
What is a Damage Claim?
A damage claim is submitted by a customer to you, when the product you shipped did not arrive in a good condition where the customer is doing extra work to get the product to work. This could potentially result in an automatic deduction in the invoice you submitted to your customer, meaning if you submitted an invoice for $10,000 the customer is going to pay only $9000 and quote the damage claim as the reason for the automatic deduction. That is where you can show pictures from LoadProof to demonstrate that you did your job correctly and it is not your fault. If it is a Carrier’s mistake you can submit a Freight Claim to the carrier if you paid for the carrier, or if your customer paid for the carrier, then you can tell that to your customer and get paid fully on the invoice.
What is a Rejected Load?
A rejected load is an extreme case, but you would be surprised to hear, how often it happens in the Food distribution business. Basically, the load was delivered in such a bad condition, the customer at the receiving end is so mad, they are completely rejecting the load, because they cannot take it and fix it, they don’t have the resources to take it and fix it. Now you have to take it back, bring it to another place, either another nearby facility or bring it back to your own facility, fix it and ship it back. So now you spent extra on the transportation both hauling it back and re-delivering, then also you spent on extra labor to fix it, also think about how bad this can be if these products are perishables, for example lettuce or cheese. So the loss could be a lot. So now imagine if you have pictures to prove that you did your job right, at least you can push back and say – Hey I am not going to pay for this, because it is not your fault and you can have the party that is responsible for the problem to pay for it.
Different scenarios to take pictures of
- Outbound Loading & Shipping
- Video of entire fully loaded flatbed truck
- Inbound Receiving
- Inbound Damages
- Outbound Trailer Seals
- Licenses, DEA, FDA, sometimes even Drivers licenses
- Bills of Lading
- Proof of Delivery
- GEMBA walks
- Trailer Numbers
- Proof of compliant loads
- Stretch Wrapping
- Using the wrapper with the right gauge – The gauge is even more important because if it is an LTL shipment the gauge you apply have to be higher because you are going to move the product too many times
- If it is an FTL shipment, then the gauge can be slightly less
- Using the right labels
- Do not Stack
- Do not break skids
- Fragile Item etc.
- Cost Savings
- Labor Reduction – no need to manage all these photos
- Show that the product was shipped Outbound Damage Free – No damages
- Capture damages in the Inbound Product
- Paper Trail – Supply Chain Visibility & transparency across multiple parties
- Significantly improved Customer Satisfaction
- Significantly improved Relationships with customers and other Supply Chain partners due to transparency
- You are eating the cost yourself in order to not lose customer (even though it was not your mistake)
- 75% cost reduction in labor spent on researching problems after they happened
- Whenever there was an issue the following happened
- Your OEM or the Name brand customer – would call & ask – hey what happened with that?
- Then as a 3PL warehouse Manager you will have to respond to that
- There will be a lot of back and forth on what was the problem, how exactly it happened, how come this happened blah blah – look at all the time that was spent on this
- But with LoadProof, the OEM Name Brand customers have access to the pictures themselves, so they can login and see the pictures for themselves – all the back and forth is avoided – so claims went down by 95% – All this was because the customers knew there were pictures and they can see those pictures anytime they want
Additional Customer Results
- Customer Satisfaction through self-service portal – customers love this – no training needed
- DEA Compliance fine avoided – $10K
- Documentation – cost savings $20K
- Compliance for International Shipment – Cargo containers that go international, very often they would bounce around and move so many times in the ships and would get damaged very frequently by the time they reach the international destination after travelling through the ocean
- 20% Savings in Freight Claims