The Cost of Freight Damage—and How to Prevent It

Dec 3, 2021

The COVID-19 pandemic continues to affect shippers in unexpected ways. According to Bloomberg, the shipping industry hit a seven-year high in lost containers in 2021. Bigger ships, harried ports, and an explosion of e-commerce have created a perfect storm that is leading to freight loss and damage.

Even without the pandemic-induced supply chain issues, freight damage is an inevitable problem. While it’s true that some damage is beyond a shipper or carrier’s control, these occurrences are costly. They also create business disruptions and hurt relationships. It’s important to understand how to reduce the chances of freight damage.

Freight Damage: Costs That Add Up

Freight damage carries obvious costs of replacing inventory. If a pallet of product is unsellable, receivers may not accept it. Looking a little deeper, it’s clear that freight damage can have more complicated ripple effects across a business.

Long-term inventory issues include increased shrink levels. Shrink levels are the difference between actual inventory and recorded inventory. Typically, businesses consider shrinkage a controllable expense, so they will scrutinize anything that negatively affects it moving forward.

When freight damage occurs, it causes disruptions of service throughout the supply chain. Shippers have to replace the freight. Production schedules get interrupted. If not managed properly, this will begin to affect other customers as well.
Ultimately, freight damage can hurt a business’s reputation and its relationships with customers. Customer dissatisfaction can be difficult to address. A recent study showed that the majority of people have higher expectations of customer service than they did before the pandemic. Moreover, one bad experience can reduce loyalty by up to 68%. This translates into lost business and the risk of unhappy customers speaking poorly of your business to other potential clients.

Strategies to Reduce Freight Damage

The best way to combat the cost of freight damage is to prevent it from happening in the first place. These best practices will protect your freight and reduce instances of damage, leading to happier shippers and customers.

Using Appropriate Packaging

To prevent freight damage, start by evaluating your packaging. It’s easy to overlook packaging because it comprises a small percentage of supply chain expenses, but good packaging reduces total overhead costs and minimizes damage.

Packaging should be the right fit for the product. Both excess slack and compression ought to be avoided. Many packaging options have a minimum weight for contents. Ensure that you follow these guidelines to maintain product integrity.

The details matter when it comes to packaging. If there is empty space in the packaging, be sure to fill it with foam or similar filling materials. Spill-resistant seals, such as adhesive tape, are equally important for keeping products in place in transit.

Not only should packaging be appropriate for the product but it should also be right for the mode of transportation that you’re using. For example, if your pallets are stacked, your packaging should consist of a corrugated material that will hold up to the weight.

Utilizing the Right Pallets

Once you have your packaging sorted, the next step in preventing freight damage is understanding pallets. Freight is moved primarily by being stacked onto pallets. Ideally, units are stacked on pallets so that there are no gaps, meaning freight will not slide out of place.

Pallet load stability refers to a palletized unit’s ability to remain upright and intact in transit. Many aspects of shipping and warehousing can affect pallet load stability, including truck acceleration and deceleration and forklift handling. A number of factors affect pallet load stability. Among them are pallet materials, weight limits, and weight distribution.

Traditional wood pallets contain design issues that can lead to destabilization. Wood can warp when wet, creating an unlevel surface for freight. This can also result in pallets changing dimension. Some shippers are turning to plastic pallets as a solution. These pallets have the added benefit of not having nails that come loose and tear product packaging.

Weight limits and weight distribution play an important role in utilizing pallets correctly. All pallets have weight limits. Avoid overloading them to maintain integrity. Likewise, weight should be distributed throughout the pallet to ensure load stability. Unevenly packed products can break pallets or fall off.

Properly Maintaining and Operating Equipment and Warehousing

Freight damage doesn’t only occur in transit—it can happen during warehousing as well. Maintaining optimal warehouse conditions and careful use of equipment make a big difference in protecting freight.

To maintain freight’s integrity, a warehouse must adequately shield it from weather. The roof and even doors need to be in good condition to prevent water from getting in. Additionally, a warehouse ought to be well lit and clean to avoid accidents that could damage freight.

Properly warehousing freight must take into consideration any special needs that a product may have. For example, does the product need to be stored at low temperatures? The freight may require a warehouse that can provide air conditioning or refrigeration.

These conditions allow the warehouse to use appropriate equipment and storage techniques. Loaded pallets should be organized and stored carefully with bulk items secured. Racks should have adequate weight limits and support bars as well.

Pallet trucks and stackers can move pallets without damage. Pallet trucks lift and move pallets without dropping them in the process. For spaces too narrow for forklifts, pallet stackers move materials.

Improperly handling freight with a forklift can cause damage as well. Forklift damage can be avoided with appropriately loaded and balanced pallets. Clearing warehouses of debris and carefully planning layouts prevents forklifts from having to make tight turns down narrow aisles.

Proper Loading, Stacking, and Wrapping

Proper palletizing, or stacking and packing products on a pallet, will help avoid freight damage in the warehouse and in transit. Always stack packaged products in aligned columns. Pyramid-shaped stacks tend to tumble as do misaligned stacks. Heavier boxes should be at the bottom of the column to maintain stability.

The downside of stacking in columns is that freight is likely to shift. Stretch wrap, applied manually or with a machine, minimizes shifting. Banding with plastic or steel strapping can serve the same purpose.

Not every product is packed in a conventional box, so your freight may need different considerations for palletizing. For example, bags maintain the most stability when stacked in an interlocking pattern. They must be secured tightly with banding or stretch wrap to prevent shifting.

Proper Labeling

Good labeling makes proper warehousing and palletizing possible. Labels tell carriers exactly how to handle freight, so they can avoid mishandling and damaging the products.

In addition to a clear delivery address and weight, a label should have reference numbers for the sender and receiver. These allow the receiver to quickly identify and sort freight upon delivery.

Labels are important for shipping and warehousing because they specify any special requirements the freight may have. If products are hazardous or fragile, labels ensure that freight is handled to prevent damage.

Leverage a Reputable 3PL for Strategic Shipping Methods and Cost Savings

With so many factors to consider, it’s easy to see why many businesses turn to a third-party logistics provider (3PL). A 3PL can help you navigate the potential hazards that your freight faces in shipping in a number of ways.

A 3PL can help minimize freight damage by optimizing truckloads and routes. Each time you move freight on or off a truck or warehouse rack, you risk a mishap. A logistics expert can help you determine whether it’s better to ship your freight at less than truckload (LTL) or full truckload (FTL). It’s often the case that utilizing FTL means moving freight fewer times.

Some 3PLs offer warehousing services as well. This gives extra assurance that freight will be handled properly from the beginning to the end of its journey. An integrated transportation management system and warehouse management system additionally create visibility so that you always know the location and condition of your freight. In today’s logistics landscape, it’s more important than ever to have the right systems in place to save money and keep customers happy. First Class Logistics is an experienced 3PL with the knowledge and resources to help your business minimize freight damage. Contact us today to learn more.

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