Companies are increasingly being asked to pay for damages to equipment, even when they are not at fault, according to a national survey conducted by TCompanies.
“Shipping damage fees can have a significant impact on a company and raise levels of frustration when you can’t prove that you were not responsible for the damage along the delivery chain,” said Tom Burke, CEO of TCompanies, parent company of PEIRmobile.
PEIRmobile offers a mobile app that allows carriers and shippers to easily document the condition of vehicles and containers during their journey.
According to TCompanies, 39% of carriers are asked to pay for container/trailer damage even when they were not at fault, with 31% saying the damage claim was more than $500.
Containers frequently pass from one company to another on their long journey, and holding the correct party responsible can be difficult to ascertain with so many touchpoints.
The survey found that 61% of the companies that paid for the damage said they did it because they couldn’t prove they weren’t responsible. The likely costs surpass $1.8 billion in the U.S. annually, TCompanies noted, based on a conservative estimate of $200 per damage incident.
“Each year within the U.S., there are approximately 37.5 million containers and trailers transporting goods through numerous interchange points on each trip. We estimate that 25% of those containers and trailers – or 9.4 million - are damaged,” Burke said.
Survey respondents moved from 1 container/trailer to more than 51, with 40.5% of those responding say they move more than 51 containers/trailers per month to an interchange point. About 22% do not move containers/trailers.
On average, 76.6% of companies said they are asked to pay for damage less than once a month, but 3.4% said it happens more than 10 times per month. Another 15.2% see between 2 and 5 inquiries for payment a month and 4.8% report it happening between 6 and 10 times.
The largest portion of respondents, 47.9%, said they are asked to pay less than $100 per incident when they are not at fault. Nine percent report damage assessments of $100 to $250; 11.8% between $250 and $500 and 4.9% see claims between $500 and $750. More expensive claims, above $1,000, were cited by 15.9% of respondents.
In addition to the 61% that said they paid because they couldn’t prove the damage wasn’t their responsibility, another 18.4% said they paid because the document was incomplete and 17.6% paid because they found the document hard to interpret or understand. Another 2.9% could find the necessary documentation.