Freight Claim Costs
The costs associated with freight claims can add up quickly. Here are some of the hidden freight claim costs you should be aware of.
Cost of Lost Product
For any claim that is denied or simply not filed, your company must pay for the value of the lost product. For claims that are accepted, your carrier may not reimburse you for the full value of the product – this will depend on your agreement, and on the carrier’s insurance. Usually this is reimbursed at a rate per pound.
Administrative costs add up, especially when filing claims manually. This includes time spent on the following:
- Filing paperwork, making calculations, and collecting documents
- Looking for quotes on repairs, repackaging damaged products, or inspecting damaged products for salvage
- Meeting with inspecting carriers & repair people
Printing and Postage Costs
If you’re sending your claim through the mail, you need to factor in the cost of postage, and printing, along with follow up letters and supporting documents.
The decision whether or not to salvage takes some consideration. If your carrier deems that you can mitigate the loss by salvaging your damaged product, the value of the salvage will be deducted from your reimbursement. Obviously, this can be recouped by selling the salvaged product. However, the damaged product could tarnish your company’s reputation for quality product, so this must be considered as well.
Calculate Your Costs
This should give you a rough idea of the costs involved in freight claims. If you want to actually calculate your claim costs, use our Freight Claim Calculator spreadsheet. Our spreadsheet will help you calculate your cost per claim, as well as your total claim cost. Download it here.