Posts Tagged ‘Best Practices’

Carrier claims for returned goods are a little more tricky than normal claims because of the trouble in valuing the goods shipped.  Traditional carrier claims are based on known items on a manifest, each with a market driven value.  In the world of reverse logistics, the shipper often does not exactly know what is in the “returned box” to begin with and the value could vary greatly depending on the SKU, product profile, condition and age of the item.  If left to the traditional means of calculating freight claims, neither the carrier and nor the shipper will have a reliable way to value freight claims because the relative value of the inventory is almost impossible to determine, once the item is lost or destroyed.

Correct values could be dramatically different and there are a host of issues that impact the real value of the returned goods for which a claim is filed.  Examples of some of the problems in valuing returned assets are if there are missing components, or if the item has been tampered with, or if the item has been abused and is broken beyond repair.  These are common finding in processing returns but if an item is missing or if the carrier smashes the case containing the item, figuring out these variables ends up being nothing more than a guess.  Collecting on claims filed can almost be impossible, at times, because of these variables.

The best, easiest and most straight forward method to file freight claims is to establish an “average value per case”.  The average value per case is based on the budgeted units and total value of the goods that are to be processed.   No company can really peg the value of any item that is going to be returned in the future.  Using a logical method to calculate an average value per case is a fair, acceptable way to base reverse logistics freight claims.  Once an average value is determined, the process used to calculate the average should be reviewed with the carrier and the average value to per case should be included in the carrier contract and reviewed on an annual basis.

A word of caution, however, if the value of an individual item is significant, traditional freight claims processes should be used.  The level of detail concerning the returns goods is much greater using this method and you must ensure the proper processes for identification at the point of origin are in place.  In order to file “normal” freight claims, an exact list of items shipped will need to be recorded, tracked, and received at a detailed level for each shipment.  You must also ensure that the proper documentation noting the value of the shipment is made, prior to shipping.  If this level of detail is not possible, using an average value per case is probably the best method.

Want a free and easy way to dramatically improve the relationship between your management team and your employees?

Have your team at the door when your employees go home. As they leave the building each supervisor thanks them for doing a good job, says good night, smiles, and just chit chats with them.

This is a great time for your people to quickly speak with you and your supervisors one on one. You will hear about their families, big events in their lives, and issues in the operations that you may not of heard about otherwise.

It is free, it is easy and it is common best practice at Walmart facilities and other leading companies. I’ve done it for years and can tell you that it is a great practices that pays great dividends.