Increasing Customer Expectations:
Freight, Freight Damage, and Freight Claim Issues
In December 1998, Gary Moore, president of Materials Handling Equipment Company (Denver, CO) and past MHEDA president, presented a two day seminar in Chicago titled "How To Sell More Effectively Through Material Handling Equipment Distributors." Seventy representatives of MHEDA member companies
attended, primarily manufacturers and suppliers.
One major theme of Moore's presentation was meeting the expectations of
material handling end-user customers. The thrust of this message was that
distributors and manufacturers need to recognize these increasing expectations
and work together to meet them more effectively. This will result in increased
business for both manufacturers and distributors.
One area of increasing expectations Moore highlighted involved freight,
freight damage and freight claims. Moore made the following points:
- Customers expect material they order to show up at their facility
or job site in "like new" condition--without scratches, bends or other
damage. Where customers in the past might have been willing to accept
slight freight damage, many are now unwilling to do so. The customer's
attitude has changed because of new uses for material hand-ling equipment:
in the front rooms of the warehouse-type retail stores, more interest
in aesthetics in the workplace, a retail environment which daily blares
from TV and newspapers "money back guarantee--if something isn't right,
just return it," and increasing expectations in general.
- Customers are scrutinizing freight bills more closely. They understand
clearly that freight is a major part of their acquisition price. If
they feel they have been overcharged for freight, they will only pay
the freight charge that they think is "right." The cost of freight
often becomes a point of contention. Who is going to pay the difference?
- Customers don't like to file freight claims. Of course, nobody likes
to file freight claims, but customers are now less likely to see it
as their responsibility to file a freight claim when the product shows
up damaged. Customers are not interested in paying for the damaged
product, ordering new product and paying for it while waiting for
freight companies to settle claims. Moore noted that often customers
simply refuse product at the dock if they detect damage. If they discover
freight damage later, they often don't pay for the product and tell
the distributor or supplier to "come pick it up and replace it or
cancel the order." Here, again, the retail environment is influencing
the industrial world.
Handling these situations -- "Whose responsibility is it and how can it
effectively be handled to meet customer expectations and minimize freight
loss for everyone?"--became a hot topic of conversation at the MHEDA seminar.
Daryl Clever, vice president of sales for Steel King Industries, a manufacturer
of pallet and other racking in the material handling industry, volunteered
to share with MHEDA members some of the "ins and outs" of handling freight
situations, as well as some of the legal and practical issues of handling
freight claims.
The issue of freight costs, freight damage and freight claims will continue
to have challenges and opportunities for material handling distributors
and manufacturers. Manufacturers and distributors who learn how to handle this best--and communicate more effectively with customers about these issues--will give much better customer service, get more business and operate with fewer losses.
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