The Hidden Costs of Damaged Freight

Every shipper, receiver, and carrier will be affected by damaged freight at some point in time. While it may seem like you simply need to replace the damaged product and move on, there is more to it than that. Lost product is not the only cost that is incurred when a shipment shows up with damage. In fact, there are several ways that damaged freight can be financially harmful for everybody involved in the supply chain.

If a replacement is required, manufacturers incur the costs of making new product and shipping it to the destination. The receiving warehouse will lose funds since they will be unable to sell the damaged product. All of these coordination efforts require the attention of customer service reps and warehouse workers, consuming hours to replace an order rather than make new sales. Employees need to be paid, and that lost productivity is has a hidden cost as well. Whenever a product shows up damaged, the multiple steps taken to replace it take time away from other more pressing tasks. Even if a company employs OS&D specialists, they are spending money for the sole purpose of fixing issues that arise from lost or damaged freight, not with generating revenue.

In addition to the traceable costs incurred from shipping damage, there are even more hidden costs in the form of relationships. One damaged product can often be forgiven, but if it is a regular occurrence, customers will start blaming the carrier or the manufacturer. Whether they believe it is due to poor packaging or subpar equipment, they will begin to question if it is worth the effort to maintain the relationship. This lost trust can lead to a customer switching to a competitor, and the attrition will hurt any company’s bottom line. This is why it is so important to minimize damage and to have a solid, efficient process to follow when the inevitable problems occur. To see how we can prevent damage with your next shipment, get started with Zip Xpress today!

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