Transport claims are a source of negative energy, but there is another way!

Thu | 4 Aug 2022 | Simacan Solutions

Transport claims are a source of negative energy, but there is another way!

The transport sector is a dynamic world and trips often run differently than expected. If this leads to extra costs or post-calculations that a carrier wants to invoice, they have to report this to their client. These claims also lead to higher administrative costs, they can cause drivers stress and make the cooperation between carrier and client more difficult.

However, this can also be done differently, says Rob Schuurbiers, CEO of Simacan. "By creating full transparency with unambiguous and detailed data, discussions about claims become a thing of the past. Processing can be fully automated so shippers and carriers can focus on their 'real' work."

The invoicing of transport services is often a time- and energy-consuming activity, both for client and carrier. Even when clear contractual agreements have been made about rates, surcharges, penalties, etcetera and self-billing is applied, there is still a lot of discussion involved. A carrier’s field of activity is very dynamic with capricious fellow road users and unexpected traffic situations, so the same route differs every day. A traffic jam, an occupied loading dock, a broken-down truck, an urgent job in between, an unexpected return consignment: it's all part of the game and no big deal... but it must be reported. If the carrier does not 'claim' anything, every incident is at the expense of his own profit margin, even when it is someone else's fault.

Negative energy

Claims are apparently part of the business but a hassle. Drivers have to collect proofs and ask for initials, trip administrators or planning & support have to collect and submit claims, shippers have to assess these, approve or reject them, return them, etc. etc. All in all, the entire post-calculation and claims processing takes up a lot of time (and therefore money) of shippers, carriers and also charters. On balance, it provides them with little or nothing, except a lot of negative energy... and hopefully a correct invoice. Of course, they would have preferred to use this energy to provide real added value. Shippers and carriers want to organise a winning supply chain together, strengthen each other and challenge each other in a positive way. Instead, they have to argue with each other about whose fault it was that a truck needed extra time to unload freight at a DC.

Poor planning

But a correct invoice does not have to come about through such a 'worthless' process of re-calculation, claims and discussions. Because what exactly is a claim? A claim is in fact a notification of a deviation from the planning. If shipper and carrier would succeed in making a better planning in advance, a planning that anticipates the expected delays, there would be much less need for claims. What makes a claim so time-consuming and emotionally charged are the discussions that arise about exactly how big the deviation was and what caused it. These discussions are actually about data. If all parties in the chain have access to the same, unambiguous data, these discussions will be a thing of the past.

Discussions about data

Example: Suppose a driver arrives at an unloading location and has to wait because the unloading dock is still occupied by another truck. If this takes too long, a carrier will want to claim this, but they must be able to prove what time the driver arrived and how long they had to wait. For this, the driver must collect the 'evidence' themselves and note this on the consignment note. Most trucks have an on-board computer, but this often only measures when a driver started and finished a trip. This is therefore of no use. Some carriers let their drivers indicate in their on-board computer when they arrive at an unloading location and when they can start unloading, but that doesn't mean much either. The shipper has its own data, for example from the DC where the delay occurred, and their reply can be that the driver activated his 'waiting time' too early. As long as the shipper and the carrier work with different data, there will always be grounds for discussion.

Fair playing field

"At Simacan we believe in creating a level playing field and full transparency between shippers and carriers. This requires a trusted third party to independently record and provide insight into all transport activities. With our 'smart execution platform', all chain partners look at the same, unambiguous and detailed data on routes taken, turnaround times, traffic information and all other relevant circumstances. This makes the settlement of claims an automated and 'emotionless' process and reverts discussions back to the past. Moreover, by combining historical trip data with realtime situations on the road, a much more accurate planning can be made. This prevents some of the potential claims right away and improves the quality of the entire service. Everyone knows where they stand and receiving parties can see in realtime what time the driver will arrive", says Rob Schuurbiers.

Conclusion: Claim handling in transport costs unnecessary time, money and can undermine relationships between chain partners. A data-driven cooperation platform - such as Simacan - puts an end to this and ensures that all chain parties can focus on the important issue: delivering added value to the customer.

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