The Ultimate Guide to Optimizing Freight Claims Management

Shrewdly managing claims is a vital part of any profitable supply chain. But freight claims management is a headache for many companies—from finding and checking the bill of lading, invoices, shipping notifications, or any other related documents to prove the cause of the error, including documented proof of loss or concealed damage, and then submitting the claim for review.

In 2018, a survey of 272 respondents showed that 52% of US companies report damaged goods as the top reason for product returns. The trick is to mitigate that risk, and more importantly, stop losing money. Fully understanding, optimizing, and mastering the matter can cut down on headaches and lead to incredible benefits, such as improving efficiencies, processes, and your bottom line.

We’ll help you build a strong foundation so you can master freight claims management.

  • Common Mistakes of Freight Claims Management

  • Trax Transportation Spend Management Maturity Model

  • Optimizing Your Freight Claims Management

  • Mature Your Transportation Spend Management System


Common Mistakes of Freight Claims Management

Freight claims management is the process of recovering financial losses from damaged or lost cargo during carrier shipping. Although freight claims have plagued the industry for decades, their importance is growing as margins grow tighter. In such a tight, competitive market, every dollar counts. Enterprises often overlook optimizing their freight claims management software and processes.

Mastering freight claims management involves avoiding common mistakes. Read on to learn about the most common carrier setbacks.

Not filing a freight claim = taking a loss

Claims usually aren’t a daily task for most shippers, so companies don’t always realize how much money is lost when they lack a freight claim process. Very few employ robust freight claims management software or have third-party data to inform risk management in this area. Chalking up a few loss and damage claims here and there may not seem like a problem. Over time, however, it can impact financial performance.

What’s worse, this means the root of the problem is rarely identified and addressed, which creates a vicious cycle of cargo claims and losses, undermining risk management and straining management resources.

Ignoring small claims

Of course, there are instances when having your organization file for a small claim isn’t worth it. Should you launch a freight claim investigation? It depends on a number of things, including the nature of the claim, claim costs, and more. How small of a claim to go after depends on the profit margin, current market prices, and other variables. When you optimize claim management using the right claims management software tools and advanced analytics, you have the data for objective analysis to know when to claim and when to discard.

Accepting lower claims reimbursement or outright denials

Many shippers don’t have the resources or expertise to know how much they should be owed or when to contest the rejection of a claim. Because many different carriers respond differently to claims, utilizing carrier scorecards — which can be generated using claims data from new technologies — helps to keep track of such variances and can aid in optimizing your freight and cargo claim management to boost your bottom line.

Not having experts file claims

Many companies don’t think they need a claims expert, which can be true in a few circumstances. But do keep in mind that having non-experts file damage claims is time-consuming, and can result in denials, lower reimbursements, longer wait times, and hits to your profit margin. While the premise is straightforward, claim management has intricacies and nuances that should be handled by someone with the expertise and ability to apply more focus. You’ll quickly recoup the ROI of bringing in expert services.

It takes more than avoiding these common mistakes to improve your freight claim process, however. It requires true mastery as well as a centralized process. This can be accomplished through the claims technology in the Trax Transportation Spend Management Maturity Model.


Trax Transportation Spend Management Maturity Model

The Trax Transportation Spend Maturity Model provides a roadmap for large, global enterprises and providers to shift from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain—for all industries, modes, carriers, and geographies. This model helps companies become more proactive and fully optimized to eventually be leaders in their market.


Companies respond to issues as they arrive, and eventually begin to plan and anticipate matters that lay ahead.


Accurate and high-quality data is obtained and assiduously analyzed. This offers a company better visibility and the ability to make informed decisions based on data rather than assumptions.


A company at this stage is fully capable of not just weathering challenges, but using them to its advantage. These companies have aptitude, capabilities, visibility and insight, control, and optimized operations. They become pioneers of the market, leading change and innovation while extensively growing their market share and simultaneously cutting costs.

Now we’ll dive into the ways that you can mature your freight claim process to minimize—and ideally eliminate—claims.


Optimizing Your Freight Claims Management

The end goal of optimizing freight claims management is to eliminate, or at least minimize, freight claims by addressing the root of the problem. This is possible with Transportation Spend Management (TSM), a data-driven approach to analyzing and optimizing the financial and operational performance of your logistics network, including factors that impact spending and the delivery of value to customers.

As you move through the stages of maturity, the processes by which you manage claim information will transform. You begin to optimize factors, such as data reports, filing freight claims, more dollars recovered, accurate detailed reporting, and better carrier relationships. Here's a more detailed look at the maturity factors.

Gain better data capture and management

What data you gather and how you analyze it changes—data is collected in real-time and analyzed along with historical data. This creates a well of analytics and the capability to easily produce reports (ones that are reader-friendly, too).

What was once passive in nature is now actionable data, enabling you to build upon it by making informed and timely decisions to take advantage of the market. It also creates a blueprint that helps you innovate your processes to overtake the competition.

Enhance management resources

A claim can impact your business, which is why an organization needs to prioritize technology to support this process. Partnering with the right providers will make it possible for business leaders and employers in any industry to manage the internal and external factors that impact a claim. The right solutions can enhance management resources, ensuring a more streamlined process that leverages reliable, data-based insights.

Increase spend visibility

As you progress through the Trax Transportation Spend Management Maturity Model, your team will have more and more data and analytics. Trustworthy data and analytics. This offers increased visibility into processes, efficiencies, issues, etc. You’ll become proactive and increase your savings, as opposed to reacting to issues as they arise, which is usually the more costly route, too.

Improve efficiencies

Optimizing processes increases efficiencies and decreases freight claims, so you have the time, resources, and money to focus on company growth opportunities instead. The more resources needed to deal with claims involve more cost than just employees’ salaries—it also includes indirect costs, such as possibly overtime, missed growth opportunities, and so on. All of that employee time could be better spent on growing your business.

Raise your bottom line

Needing fewer employees and less money and time dedicated to filing claims opens you up to projects that can help grow your company. This enhanced flexibility allows you to highlight areas of interest to allocate these resources to expedite your growth. With more money and resources dedicated for value growth and fewer claims to file, it’s a double-whammy that bolsters your bottom line.

Strengthen your shipper-carrier relationships

A shipper-carrier relationship is a symbiotic one, as it’s built upon mutual prosperity. By optimizing processes and increasing your data and analytics through Transportation Spend Management, you can help carriers identify weak spots in performance with real-time data.

You’ll reap the benefits through fewer freight claims, better service, and happier customers. Furthermore, you’ll be able to identify weaknesses in your own processes, such as damaged shipments due to not the carrier but poor package processing on your end.

Boost customer satisfaction

Keeping customers satisfied and coming back is the basis of any successful business. Optimizing cargo claim management gives your customers the best value and service, every time.

As you progress through the Trax Transportation Spend Management Maturity Model, managing freight claims reaches a stage where customers constantly get top value, you receive few or no customer complaints, and cash flow is optimized so there’s no need to delay customers’ needs until you get reimbursed. This is especially evident during hectic holiday seasons when 70% of incidents that lead to claims occur. A leading company uses these occasions to surpass the competition and build its brand and customer loyalty.

Mature Your Transportation Spend Management System

Efficiently managing freight claims is a crucial step that transforms your supply chain management into a powerful tool. You become a leader in the industry.

In a highly volatile market that’s only increasing in competitiveness, it’s imperative to take advantage of opportunities to dominate and lead your market. Transportation Spend Management allows you to do just that. It also enables you to grow your company through better visibility, informed decision-making, and absolute confidence. This resilient foundation gives you peace of mind in even the most hectic times.

To start managing your freight claims and secure your process for years to come, reach out to Trax today.

Trax Technologies

Trax Technologies

Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.