OS&D claims are something that every business wants to avoid. Receiving one can waste time and inflict additional expenses on your business. You’ll also have an upset customer that will want their shipment fixed. But what exactly is an OS&D Claim? We’re going to show you exactly how they work.
Key takeaways:
OS&D claims can be a real headache for everyone involved in the transportation process. As a shipper, it’s important for you to do your part to prevent this from happening.
OS&D is an industry term that many shippers find confusing and intimidating. Fortunately, this acronym has a very simple meaning.
OS&D stands for the following:
Over, is when a customer gets more than what they ordered or what was listed on the shipping document. While obtaining more than what was purchased might seem appealing, an excess of freight can cause inventory issues and additional costs for buyers.
Shortage is when a customer receives less than what was listed on the BoL. This can frustrate buyers that paid a certain price for their goods, only to get a smaller quantity of product.
Being short of products can also create problems for a customer’s inventory levels. Additionally, billing and order management must be adjusted when a buyer receives fewer items than what was bought.
Damage refers to freight that arrives broken, scratched, or dented. Cargo in this state is usually inspected and documented in the BoL or the Delivery Receipt. Afterward, customers file an OS&D freight claim for compensation or request a replacement for the damaged goods.
An OS&D report is a document used by consignees to identify discrepancies between what was supposed to be shipped and what actually arrived.
This type of paperwork uses the following information to determine the accuracy and quality of a shipment:
Both the driver and the consignee receive a copy of the OS&D shipping report. After the paperwork is completed, all parties involved can work towards a resolution.
This can be done in the following ways:
Regularly reviewing OS&D reports can provide insights into recurrent issues. This can help you improve their operations for future shipments.
Carriers are the ones who are typically responsible for correcting the discrepancies in an OS&D claim. That said, shippers will also be responsible for replacing damaged goods or sending a new shipment of items for orders that were short.
Two particular challenges that OS&D claims can cause for shippers include:
A business must know about these challenges to fully appreciate the threat that OS&D claims can pose to their operations.
In the world of shipping and logistics, customer satisfaction hinges on delivering goods as promised. When a receiver submits an OS&D claim, it doesn’t just mean they didn’t get the correct amount of goods or their products are damaged. They’re likely dissatisfied with the experience as well.
As a result, your customers can lose trust in you and will likely search for a new retailer. To avoid losing out on profits, packing your goods properly and sending the right quantity of cargo is essential.
There are many financial implications for businesses when they’ve received an OS&D claim, mostly revolving around how you solve the issue.
Numerous expenses are often involved, including:
When goods are damaged or missing, you’ll need to send replacements. This doubles the shipping and product costs for the same order. Customers may even demand refunds or discounts due to discrepancies.
Handling OS&D claims involves paperwork and communication. In some cases, legal processes will be carried out. These administrative tasks will take up time and cost money.
There are many reasons for overages, shortages, or damages involving cargo. Businesses will face these challenges with every shipment they send. The goal to should be to minimize them as much as possible.
Common causes to look into include:
We’ll explain how you can avoid each of these challenges.
The care that goes into the handling and loading processes directly influence the condition goods will arrive in. When freight is mismanaged, it often results in OS&D claims.
Examples of poor loading practices include:
Failing to count items accurately during loading can cause overages or shortages. Miscounts lead to discrepancies between a BoL and actual goods that arrived.
Rough or careless handling can damage items while packaging and loading. Damage can also occur if goods are stacked improperly. For example, heavier items stacked on top of fragile goods can cause breakage or superficial blemishes.
If freight isn’t secured properly to a pallet within a trailer, it can move or fall during transit. This is another cause of damage that will lead to an OS&D claim. Stack your cargo on a pallet correctly and firmly secure it in place.
Related: High Value Cargo Transportation
While packaging won’t cause overage or shortage, it can determine if goods will arrive undamaged. Even well secured boxes and pallets won’t protect poorly packaged items.
Packaging mistakes that can lead to damaged products include:
Goods can get jostled and damaged without enough protective cushioning. Therefore, it’s important that packing materials like shipping paper and bubble wrap be used to protect the item(s) inside a box.
The wrong box size can also lead to damaged cargo. Packaging that’s too small can restrict or prevent the use of packing materials. This can make it easier for items to sustain damage.
Boxes that aren’t closed properly can split open, causing the items inside to spill out or become exposed to harmful conditions. Use a fragile item label if you’re sending goods that can be easily broken. This will signal to truckers and warehouse personnel that your products should be handled with care.
Finally, abstain from using old packaging. Used boxes and packing material are less likely to provide the security that freight needs to arrive safely at a destination.
At the end of the day, the right packaging is there to avoid easily preventable damage.
Related: Non-palletized Freight
Transporting goods over land often means contending with a variety of road conditions. The state of a highway plays a role in the safety of a shipment. While it really isn’t something you can control, it’s still good to be aware of what dangers these can pose.
Hazardous road conditions that could lead to damaged cargo includes:
Driving over loose gravel can cause cargo to fall down or bang against other types of packages and pallets. Potholes in a road or highway can send a shockwave through a trailer that causes freight to tip over.
Uneven roads can pose a threat to freight as well. If a highway isn’t perfectly level, it can be easy for packages inside a trailer to tip over. Despite road quality not being the fault of the shipper, customers may still issue OS&D claims if their freight is damaged for these reasons.
It may be possible to avoid certain routes if you know that conditions will be problematic. When that isn’t possible, fall back on proper handling and loading procedures as much as possible.
Another cause of freight damage is traffic accidents. Safety is a major priority for truck drivers, but other drivers on the highway might not be as careful.
Traffic accidents can result in:
Impact from an accident can cause goods to be crushed or broken by another vehicle. It’s possible that a crash could also result in liquid items spilling from a container. Finally, damage can occur after an accident if freight is exposed to the weather. This is especially relevant if a reefer trailer holding perishable items stops working.
Unfortunately, trucking accidents are fairly common and have been fluctuating over the past few years despite efforts are increasing safety procedures.Â
While the data may not include stats on damaged cargo resulting from accidents, it provides a solid reason to make sure items are well packaged.
Not every accident will result in damaged freight, but shippers should be prepared in case it does occur. Picking carriers that have good safety records is a great way to find a reliable partner to transport your cargo.
Related: Blanket Wrap Shipping
Paperwork and administrative errors can result in mistakes affecting multiple aspects of the supply chain, including cargo counts
These include:
Incorrect labels or tags can lead to shipments being sent to the wrong destination. As a result, customers might receive goods or products they never even ordered.
Mislabeling can also lead to damaged goods. This can happen if ‘Fragile’ or ‘This Side Up’ labels aren’t placed on boxes before palletization. Overage and shortage could occur if orders become mismatched, which usually when two or more shipments are unintentionally combined.
Related: Documents Required for Domestic Shipping
Need to ship freight, but unsure how to do it? Schedule a 1-on-1 consultation with one of our logistics specialists to get the help you need.
There are actually a variety of claims fall under an OS&D status besides the obvious ones. You’ll need to understand each declaration to properly address them if one is submitted.
We’ve already reviewed the basics behind dealing with short or over claims, but let’s look more closely at how the different types of damage claims may need to be addressed.
Visibly damaged claims are submitted when the external appearance of a shipment indicates clear signs of harm. These claims are easy to verify because disfigurement of the cargo is evident without having to open the package.
These also tend to be reported faster, or may even cause the receiver to reject the shipment entirely.
Causes for visibly damaged claims include:
As the seller of the goods, and likely the one who arranged the shipping, you’ll bear the cost of replacing the damaged goods and additional shipping expenses for new items. A seller may be able to recoup some costs if they can prove it was the carrier’s fault or if they had cargo insurance in place.
Concealed damage claims are filed for freight that isn’t noticeably damaged from the outside packaging. Instead, customers submit this declaration after opening their boxes and noticing the items inside are damaged.
Factors that cause concealed damage include:
This type of claim can be harder to process because customers won’t discover them until after accepting the cargo. In some cases, damaged inventory can go weeks or months without being noticed. Proving who caused the damage can also be harder, which only extends the process.
Lost claims arise when a shipment never reaches the intended destination. When customers don’t receive their cargo, they’ll essentially be suffering from an extreme shortage. This is the worst type of claim that you can receive.
In most cases, you won’t be able to recover any of the cargo they sent. Additionally, you’ll have to replace the entire shipment or refund your customer.
OS&D claims are a recurring challenge in the transportation industry. There’s always the risk that damage could occur or that the wrong amount of goods could arrive at a destination. Fortunately, there are methods that you can use to avoid OS&D claims, or at the very least minimize them.
Ensuring items are packed correctly will guarantee they’ll withstand the journey. Proper packing can mean the difference between a product reaching its destination intact or ending up as part of an OS&D claim.
When preparing a shipment, shippers should do the following:
Choose a box that fits the product snugly, with just enough room for padding. Make sure to avoid boxes that are too large or too small for their cargo. The packing materials that a business uses to prepare their goods for transport must be sturdy as well.
This includes:
These packing items will ensure that your goods are protected during the transportation process. Sealing is another important step. To keep boxes closed, utilize strong packing tape. Finally, all boxes and palletized freight should have the appropriate packing labels.
This includes the following warnings:
These labels will let warehouse workers loading and unloading the cargo know that they need to handle the freight with care. Now that your boxes are packed, you’ll need to secure them to a pallet. Start by stacking them onto the platform.
Two popular stacking methods include column and interlock stacking, but there are plenty of others you can choose from. How high you can stack freight on your pallet can vary based on the customer receiving your freight, so make sure to check with their requirements.
Secure your boxes to the pallet using stretch or shrink wrap. If permitted, you can use straps for extra support. Even though your boxes will have labels, you’ll also need to apply pallet labels to the outside of the stretch wrap.
Related: How To Palletize Boxes
Communication is a cornerstone in the shipping industry. Establishing your intentions with carriers will help reduce misunderstandings and potential OS&D claims.
You can communicate effectively with carriers in the following ways:
You’ll need to give the carrier precise information about your freight. This will ensure that your cargo is loaded and unloaded carefully.
Always use written contracts or agreements outlining responsibilities and expectations. These documents should clearly define all terms and conditions regarding a shipment. This should include reassurances against the often fraudulent practice of double brokering.
Double brokered freight is more likely to get lost or stolen, not to mention involve you in legal disputes.
Accurate and frequent communication with your carrier will help prevent potential issues that might occur.
Related: How to Report Double Brokering: Detect and Prevent Freight Scams
Proper documentation can be your best defense against OS&D claims. By properly reviewing and confirming the right quantity of freight listed in transportation documents, businesses will ensure the right amount of cargo is sent to a customer.
Record keeping is useful when referring back to archived documents in case a customer files a false claim. With accurate paperwork, businesses will be able to prove that they sent the right amount of cargo.
While OS&D claims require shippers to replace damaged products or orders that are short, carriers are also liable. A carrier often rectifies OS&D claims by reimbursing the value of lost or damaged goods. They can also arrange for a shipment that will deliver the replacement items.
That said, there are five exclusions that carriers can use to avoid being held liable in an OS&D claim.
Acts of God include losses and damage caused by natural disasters or similar events beyond the control of the carrier, such as:
Damage or loss caused by the acts of a foreign military force falls under the Public Enemy or Act of War exclusion. This is usually applicable to international shipments, which means the carrier is unlikely to claim this exclusion for domestic shipments.
If a carrier can prove that discrepancies in the shipment were caused by you, the shipper/seller, they can claim the Act of Default of Shipper exclusion. In this scenario, you’ll be responsible for addressing the discrepancy in the OS&D claim.
The Public Authority, or Authority of Law exclusion, is applicable when goods are seized or destroyed by a legal authority. This exclusion typically applies to imports entering the country. Customs authorities may seize goods to inspect them for regulatory compliance.
If items don’t comply to regulations, they may be destroyed. For instance, the need to destroy agricultural goods that may arrive with pests. Similar to Act of War, carriers are less likely to claim the Public Authority exclusion for domestic shipments.
The Inherent Vice exclusion applies to shipments that are already susceptible to damage because of how they’re made, such as:
For a carrier to use the Inherent Vice exclusion, they’ll need to prove they took the necessary steps to protect the damaged shipment.
At USA Truckload Shipping, we pride ourselves on our deep understanding of the industry's intricacies and our unwavering commitment to flawless performance. We can provide you the knowledge and tools to overcome the challenges posed by OS&D claims. You’ll also gain access to a variety of carriers from our vast network.
You can also take advantage of our premium services, such as:
Trust isn't built overnight, but with USA Truckload, you're partnering with a team that prioritizes your needs and understands the stakes. Why wait? Secure the future of your shipments, minimize risks and ensure the satisfaction of your customers.
Fill out your request for proposal (RFP) to get started with our services today. You can also dial us at (866) 353-7178 or reach out using our contact page if you have questions or concerns. Take a confident step towards a hassle-free shipping experience today!
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