What Does OS&D Mean?

In the context of LTL claims, OS&D is an abbreviation that stands for over, short and damage. To expand the meaning further, here’s a description of each term used:

• Over or Overage: The shipment quantity is over and above that listed on the shipping documents
• Short or Shortage: The shipment quantity is less than that indicated on the BOL (bill of lading)
• Damage or Damaged: The shipment was received damaged. Damage can be either externally visible or concealed within the packaging containers.

Solving Problems Associated with LTL OS&D Claims

Nobody wants to deal with the headaches of filing a claim of any kind – but it does happen. The fallout from an interruption in your supply chain will include delays, unexpected costs, lost productivity and perhaps worst of all, a loss in customer confidence.

Moreover, OS&D can become a point of contention between you the shipper and your 3PL partner as you try to hammer out the details. Both sides have to feel they’ve done the right thing towards resolving a claim.

To help you get past the problem of dealing with an OS&D claim as quickly and efficiently as possible, we thought we’d share some insight into how limit claims and improve your chances of recovering a payment.

Details of OS&D Claims

Since there are a number of aspects and circumstances that constitute a claim, here’s some further explanation on the particular elements:

Time Period for Filing a Claim

For visibly damaged goods, a shipper usually has nine months to submit a claim. Taking numerous pictures is critical in making sure there’s enough evidence to back-up the freight claim.

Similarly, don’t delay the claims process by waiting any great length of time. The success of being compensated goes down the longer you wait.

As shipping technology advances so does the ability to monitor freight claims. Using technologies such as Software-As-A-Service (SaaS) can greatly help to expedite the claims management process.

Shipper’s Responsibility for the Freight Bill

As a process, the freight bill still needs to be paid regardless of whether there is a claim in place or not. As a shipper you are still required to pay the invoice as part of the delivery service.

In other words, claiming reimbursement for a damaged shipment is a completely different process and transaction.

Bill of Lading

The importance of the Bill of Lading or BOL, can’t be underestimated. It’s the key document the carrier uses to verify all aspects of the shipment itself, especially when associated with an OS&D freight claim.

As a main point of reference in evidence, it’s the one document both parties inspect first to determine how the product was received at the warehouse or distribution centre.

Along the shipment’s journey, signing the BOL acknowledges the product arrived and verifies its condition. Before signing off on the BOL, he receiver validates the shipment quantity and inspects it to make sure there’s no visible damage to the freight.

Once the BOL is signed, the bill of lading is free and clear. This now “Free BOL” allows little to no opportunity for filing a damage or short-ship claim because title of the product is transferred at that moment.

Shortage Claim

As the name implies, a shortage claim occurs when freight arrives incomplete. The shipment is clearly missing a number of units and does not match the details described on the bill of lading.

If a consignee or receiver made a note of a shortage on the BOL, it’s relatively easy to file a shortage claim.

Concealed Damage Claim

Due to the extra layer of inspection required, concealed damage claims are more difficult to pursue and claim for reimbursement.

In comparison to obvious visible damage where you have an extended period to file a claim, most carriers will only allow concealed damage claims to be filed within five days.

Concealed Shortage Claim

Similar to a concealed damage claim, concealed shortage claims are not immediately recognized and therefore not noted on the BOL at the time of signing.

Concealed shortage claims are difficult to prove, so you’ll often find that carriers push back very hard on these claims.

As with other concealed claims, time is of the essence. You only have five business days to let your shipper know about the shortage. If you delay beyond five days, your carrier will deny your claim.

Refused Freight Claim

If a consignee is not happy with the condition of their received freight, they have the right to refuse part or all of the shipment. Examples of refused freight include: damaged freight, late shipment or wrong product.

In the case that your consignee refuses shipment, it’s returned to your carrier’s delivery terminal. Your LTL or 3PL partner will contact with the following options on what to do with the freight:

• Send it to another address
• Send the shipment back to the address of origin
• Dispose of the product of as per your company’s policy

Depending on the agreement with your provider, you may or may not have to pay the invoice.

Once again there is a critical window of time window. You must file the claim within five days otherwise the carrier can deny the claim.

Loss Claim

A loss claim makes great case for maintaining insurance as it means your entire shipment was lost by the LTL motor carrier. The majority of loss claims occur due to the shipment paperwork being separated from the physical freight itself.

In this situation, your carrier will typically have a week to try and to locate your freight. Service providers understand this does not reflect well on them. Therefor in the event the freight is not found, you will not incur shipping charges and the claim will be reimbursed quickly.

Freight Claim Reimbursement – Key Points to Keep In Mind

Successful OS&D claims begin and end at the receiving dock. Taking immediate action will help ensure the claim is quickly processed and approved.

The following lists cover the essential documents and actions required to facilitate a quick resolution:

OS&D Claim Requirements

• POD must notate any discrepancy to the BOL
• Copy of the freight bill
• Original BOL must be included
• Merchandise invoice documenting the value of goods
• Repair or replacement bill for the product
• Pictures of the damaged freight
• Damaged freight must be saved until the claim is approved

How to Improve the Product Receipt Process

• Inspect the freight immediately
• Do not sign the BOL without inspecting the freight
• Document any damages or shortages
• Notate any damage on the BOL
• Take pictures of the freight
• Store the shipment in a safe area to prevent further disturbance until the claim is approved

Best Practices To Avoid Damaged Freight

Nothing is worse than having your goods damaged in transit. Let’s be sure your own packaging system isn’t to blame right from the start.

There’s no doubt about the amount of frustration everyone in the supply chain experiences when a shipment arrives damaged at its final destination.

Whether it’s the end-user, or the retailer who was hoping to sell a now unsalable product to a valued customer, freight damage is not only a pain for you, but can cause significant losses to your company.

The real cost of damaged freight is in lost profits, increased insurance rates and eroded relationships with customers can be avoided.

To ensure you provide the best possible protection for your goods at the start of their journey, let’s look at the best practices on how to avoid damaged freight.

1. Start With Appropriate Packaging

In order to insulate yourself from the being the source of inevitable shipping claims, correct packaging is your first critical step.

It may be the smallest cost in your supply chain, but it can have a major impact. Shortcutting on packaging can have a trickle-down effect on your more expensive costs like shipping, warehousing, and loss prevention.

Choose the right packaging material and correct size, large enough to hold the contents, and with additional necessary impact protection. Packaging that’s uniform and consistent throughout your business also makes it easy to load and stack on pallets.

Never use compromised packaging with dents, holes, tears, or water damage. A damaged container almost always means damaged contents. And stay within the maximum weight per package. You can usually find recommended weight information printed on the box maker’s certificate.

It’s also important to coordinate your packages with the correct pallet size. Adhering to matching dimensions for stacking and movement will reduce damage the boxes.

2. Consider Impact Protection

Every package should include some form of impact protection, especially for packages containing liquids, glass or otherwise fragile materials. Impact protection can mean the difference between a hassle-free shipment and a lengthy claims process.

Envelops lined with bubble wrap can provide extra cushioning for such items but the outside package will likely be soft. Therefor it’s a good idea to provide an extra layer of packaging: a hard, outer package with the smaller, impact-resistant package inside. Again, another consideration is how these packages will be arranged when palletized.

Styrofoam has been a go-to packaging material for years but comes at a risk to the environment. For a greener shipping experience, better choices are cardboard, paper, bubble wrap, biodegradable plastics, and items made from cornstarch.

3. Use Better Quality Adhesives

One of the top reasons for damaged goods is incorrectly sealing packages. Seal with strong tape that is at least two inches in width.

Better products would include pressure-sensitive plastic, water-activated reinforced tape, or water-activated paper tape. These products are strong and durable, plus they’ll hold up against potential spills and water exposure.

Avoid using typical retail products like cellophane tape, masking tape, or string, which break and rip easily.

4. Load the Trailer Efficiently

Loading a trailer properly can be considered an art form – one that has your best interests at stake.

Weight must be evenly distributed on pallets. Always stack one “tower” with the pallets or packages of the same dimensions to maintain uniformity and stability.

To avoid the crush of gravity, every three layers should have a reinforcing sheet of cardboard or similar material to help distribute weight and prevent downward-pull breakage.

Since empty space can lead to shifting and breakage, pallets and packages should be packed as close together as is reasonable.

Use self-protective techniques such as stacking lighter cargo on top of heavier cargo, and putting dry goods on top of liquid contents to prevent additional damage from leakage.

5. Label Everything

Labels are an often-overlooked yet very important part of preventing freight damage. They help shippers make correct pallet-packing decisions during the shipping process.

Without accurate identification, it’s impossible to determine a product’s fragility or durability from simply a seller’s brand or name. A label should indicate the content’s ability to handle added weight.

This may include an indicator that the contents are fragile, heavy or flammable, or declare the amount of weight a box or package can withstand before being crushed.

Labels should be bright, easily identified, and relatively limited to avoid confusion. Unless required by the carrier, multiple labels should not be used.

In the case of mislabeled packages, the incorrect label removed or marked out clearly. The correct label should also be free of stains or other damage.

6. Consider Using a 3PL Partner

If you typically ship LTL freight, packaging is even more important. LTL shipments move from hub to hub, requiring extra handling, loading and unloading more often than just traditional A to B full-truckload transactions.

A good working partnership with an experienced 3PL partner means they will assist in all aspects of making your shipping experience as easy and carefree as possible.

This includes analyzing your current packaging, giving solid advice on how to improve for less damage, and properly utilize space. This helps to make sure your freight is ideal for the carriers ensuring your rates don’t increase due to ‘bad freight.’

7. Create A Freight Plan

For any reoccurring process, having a detailed plan to refer to is always a best practice. It’s no different with your freight packaging.

First, study your current packaging practices to ensure they are at peak efficiency. Keep in mind the use of impact protection as well as consolidation methods.

Next, record your best practices on how your goods get out the door safely and efficiently. Everything from from packaging and loading pallets to loading the trailer.

Once you have these elements recorded, you can build a freight plan that outlines the exact processes, Standard Operating Procedures (SOP), to be followed each time. This helps warehouse employees know exactly how things should be done for maximum productivity.

Make sure to include assessing your claims using specific metrics. Over a year, continuous damages can be a huge hit on your bottom line. Find out exactly what could be causing damages then take the necessary steps to address and fix them.

Less Freight Damage Equals More in the Bottom Line

Losses through freight damage are the single highest cost to a transportation department. Focusing on training your employees with a solid freight plan can help you avoid damaged freight at the source and ensure better relationships with your clients.

By using appropriate and thorough shipping processes you can also see a major improvement to your profit margin.