Navigating Freight Claim Challenges | Episode 231

Speaker 1: 0:19

Alrighty, welcome back. It's episode 231 of the Freight 360 podcast. We're talking about claims today, but first make sure to hit that subscribe button. If you haven't done so, Follow us on social media. We got like a Twitter now I think. Yeah, we got Twitter. We got Facebook group. Share with your friends, Make sure to hit the like button, leave reviews, etc. Check out our website, Freight360.net, and the Freight Broker Basics course to get the best training in the industry. And actually, Ben, we actually had an opportunity to join Chris Jolley's show yesterday, kind of talking about training and coaching. Great discussion. So if you guys are fans of us, Chris Jolley is a friend. We co-teach the TIA's New Broker Success Package for TIA. Check out his podcast Coffee with the Freight Coach. You'll see Ben and myself talking about that stuff whenever he releases it. Sweet man, How's Florida warming up at all? It?

Speaker 2: 1:26

is. This is a little bit warmer this week than it was. I mean today got a little colder Back in the 50s, but the past three or four days it was lows in the high 60s to low 70s.

Speaker 1: 1:36

I'm getting the itch man my wife and I put up on like our mantle of our fireplace those little blocks with like letters and numbers you can spell out like happy birthday and all that and it's just as like days till Florida. So it, like the mild winter in Buffalo, definitely was enjoyed by us and it's gone. It's like in the 20s now.

Speaker 2: 1:59

And I just get snow in January. There's also snow in the Northeast, definitely in the New York, Eastern New York side, there was a big winter weather system that came through.

Speaker 1: 2:13

It had like a name and everything. I don't remember what it was, but yeah, that went through like New York, boston. Yeah, didn't touch us though, but anyway, we're getting close to the daylight savings and the clocks moving, which means no more dark at five o'clock or 430. So it's just, you know, it's the beginning of, it's the end of the terrible winter season here and hopefully a peek into some nice warm weather. But sports, real quick, the Super Bowl chiefs took it. Man, I called it that they did. Yeah, taylor Swift did not get proposed to by Travis Kelsey afterward. Do you see Travis Kelsey like running up to Andy Reed, like, and there's been a bunch of memes about it. But he basically like ran up there and because he wasn't on the field and got all like.

Speaker 2: 3:03

I mean, I was like screaming in his ear.

Speaker 1: 3:06

So I was wild. That first half of that game was like super boring, though, and halftime dude.

Speaker 2: 3:13

I love the halftime show.

Speaker 1: 3:14

I don't know about you, man, it took me back. It took me way back to the nineties and early 2000s.

Speaker 2: 3:19

I was listening to this radio show in Pittsburgh. They were talking about the halftime show Monday. I saw some of it, but my wife wanted to watch something else. I turned it off and turned it back and he was like this guy was he's like our age and he was like, yeah, he's like I love that shit, love the roller skates. He's like I forget who else was there. He's like that shit brought me back like 20 some years for me to read and he's like he's super excited and he goes, he goes.

Speaker 2: 3:45

I was watching with my kids, who are, like you know, early teenagers, and he's like dude, wasn't that awesome. And he's like they just looked at me and went, not so much. And he's like there's the generational gap. He's like my kids looked at me like I was a big dork and he was like I loved it. I mean, for me that's right in my wheelhouse, like I'm sure.

Speaker 1: 4:02

I thought it was great for sure. Second half of that game was amazing though. I mean it was up tempo, you know, fast paced scoring was good. And then, like you know, like the Chiefs hate the Chiefs or, if you're indifferent regardless, like that was a hell of a performance for their offense to just click into gear and force it to overtime and then take the win.

Speaker 2: 4:26

So I can't remember, but who won the coin toss for the overtime, was it? It was San Fran, wasn't it?

Speaker 1: 4:31

San Fran and they elected to take the ball first, which some people say could have been the wrong choice, and even, like Tony Romo said it during the broadcast, he's like what do you do here? Do you take the ball first and try to go down and score, knowing that they can come back down and either tie you or beat you, or do you defer and hope they don't go down and score but risk them going down against you know?

Speaker 2: 4:55

See, I, like, I heard, like the, the recap or the analysis or the perspective I heard made a lot of sense. And there was two things that I wanted to say, because I also think this relates to our show and our industry, right. And the one was they're like you know, on average, if you kick off and the other team doesn't score, right, they're going to punt. You're going to get the ball, probably better than you would have, field position wise than off the kickoff. Right Off the kickoff, you're probably going to the 20 or less. If you give the ball to the other team and you hold them and they punt, the likelihood is you probably have a little better field position, but even so, you're going to get the ball back anyway, right.

Speaker 2: 5:32

And the thing they said afterwards, I guess in one of the interviews with both Andy Reid and I can't remember the coach's name for seeing for him off the top of my head, but they asked both of them hey, did you guys have a plan for overtime? And Andrew was like yeah, we absolutely expected that if we would have won the coin toss, we have done this. If we didn't win, the plan was this. And they interviewed the other coach and they were like no, we didn't expect to. Yeah, shan Han was like we didn't expect to get the overtime, so we didn't really have a plan. And I was like that to me says a whole lot.

Speaker 1: 6:00

Right there, you got a plan for, like every contingency, yeah, for the last game I'm going to tie into our claims discussion today, but we'll get to that. That was the point.

Speaker 2: 6:10

I'm like man if that's not a great takeaway for just you know what I mean Like the people that prepare right? Yep, was it failed a plan? People that failed a plan, plan to fail I failed, that's it.

Speaker 1: 6:23

So you know your daily or your weekly Ben Kowalski proverb proverb. Yeah, Producer Stephen said usher only made $400 after everything was settled at first half time show. Scratch that usher made zero. So I didn't know this actually until this week, that half time performers don't get paid for their performance. But it is well worth it for them. Like their expenses are paid for, you know for like whatever it costs to put the show on, it's paid for. But the publicity is where they like intangible value lies. So like he's got I think he's got a new album coming out and it was a huge promotion for it.

Speaker 1: 7:06

Like they say, whenever there's a Super Bowl performer, their music tends to get like a 10X boost and downloads on like Apple Music and everything like instantly, which is a huge payout. So, like Rihanna, I think when she did last year, she had an album coming out too, or something like that.

Speaker 2: 7:24

So you know what I read and I was curious if this is true, they said somewhere I saw it, it was on a post. So again, no idea if this was true and didn't look it up but it said prior to 1992, there was not a halftime show. And they said in 1992, in Living Color did a live episode during the halftime of the Super Bowl.

Speaker 2: 7:43

I saw that, yeah, and got 20 million viewers because basically everyone went, oh, let's go watch this for a minute, right, and came back and the year after was when they hired, and I can't remember who they hired, but it was like a huge name and like 90, and I'm like I don't know if that's true or not I was like, but that's really interesting.

Speaker 1: 7:58

No, no, I saw that in an article last week, unless we both read the same article and it's wrong. But anyway, that's sports In news. Just check out our newsletter. We put everything in there. Tuesdays and Thursdays it comes out, and what are some big takeaways that we saw? Oh, dude, that plane crash in Florida. The truck driver's dash camera caught the crash. Did you see that?

Speaker 2: 8:25

No, I saw the plane crash on his own. There's a link to that on the list that he wants to see.

Speaker 1: 8:29

I mean it's tragic but it shows like the plane coming down Wild story there and like it sounds like the pilots are kind of like heroes. The pilot and co-pilot were the only two fatalities and it's tragic regardless, but they had the two passengers and the flight attendant get to the back of the plane where it was the safest for landing an impact. The plane touched down, ended up hitting the wall, like the wall on the side of the highway, and spun around, which killed the pilot in second command. But the three other passengers were able to get out safely and no one on the road got killed. I mean the one guy that sounds like he got hurt, his truck got clipped by the plane, but just wild man and it was all caught by a camera on a truck driver's dash, which actually we're gonna talk a little bit about today with certain kinds of claims and things like that, whether it's an accident or whatnot and who's at fault.

Speaker 2: 9:29

That's wild. I just watched it like I found it pretty quick, but that is.

Speaker 1: 9:36

It's crazy, man.

Speaker 2: 9:37

Yeah, because I mean the pilot is literally down the street. Oakland Park and Pompano are the two pilots and they were talking about on the local news. I mean yesterday I saw it but I didn't get to hear in the news piece exactly what played out. That is absolutely crazy yeah that's nuts man.

Speaker 1: 9:54

Besides that, I'm trying to think of any other news stuff that popped up. Yeah, I don't know. All right, well, claims. So I wanna remind everybody. We had a Steven Rui, our producer slash intern, and we had him on an episode a couple months ago and talked about meat and there was a bit about claims in there. So double listen or watch that one if you want some more claims stuff. We're gonna focus on more general stuff. Today Somebody had a question on YouTube asking about claims when it's not produced, because we talked about a produce situation in the past with USDA inspections and I thought what's that? An episode where we just talk about claims, the process of how claims work, the parties involved. We could tell some stories. We haven't talked about claims in a little bit, so we definitely have some new stories to share and tips and tricks to give you guys. So, ben, what's any memorable claims that you have?

Speaker 2: 10:55

I have a really yeah, I have a one that's very memorable. There was a fatality involved.

Speaker 2: 11:01

I've told this I was probably a very long time ago that we talked about this, might even in like our first couple episodes, I think, maybe, where we did this topic. But I was hauling project steel coming out of New Orleans ports going up to the steel mills up in like Detroit. We were talking about this on a project frame that was the project right and one of the carriers he was running multiple loads. I was doing these for weeks, maybe a couple months. So I mean, knew the guy very well. He was probably in his late 60s or early 70s and we like lost him right and I'll never forget it because it was like over a weekend, I think. He loaded Friday, was supposed to deliver Monday and I couldn't get a hold of him Friday and I was making my check calls Saturday and I remember talking to the dispatcher and it was a smaller trucking company. You know a couple people and I'll never forget talking to this woman. She's like we don't know where he is. We've been trying to reach him. We're really nervous.

Speaker 2: 11:52

We were calling local police, not because we thought it was stolen, because we just both of us couldn't find or hear from him and didn't know what was happening.

Speaker 2: 12:01

We thought and we came to find out, I think Sunday night. We found out was the guy had had a heart attack on the highway on the interstate and avoided hitting the rest stop as he lost control of the truck and intentionally, they believe, veered from hitting other people and the rest stop and hit a tree. They said they thought it happened on purpose, but then the truck exploded and burned to the ground. So not only did all of that play out right was the claim after, but that was the incident that caused the claim. And after the fact we had found out that like they'd think he had passed away, like in the accident, kind of like prior to it, and it was like a last thing he did, kind of to like to keep people out of the way. And yeah, guy was super nice. I mean I remember still talking to him to this day and I remember that woman's voice when I talked to her, like that Sunday night or that Monday night that's wild.

Speaker 1: 12:57

I think about the burning thing. I remember years ago someone had started at a company I used to work for and her fourth day she had a total loss from a truck like exploding and just burning. I was like that's bad luck. But hey, she got to learn the claims process pretty quickly. You're doing. There's a lot involved.

Speaker 2: 13:19

It involved the cleanup. It involved trying to salvage what was left and it was, if I remember it was insulated steel wire, like it looked like telephone wire right, it had a big steel wire in the middle and a bunch of rub around it. So all of that melted but the steel was still there and, like working through the claim process, like there was salvage value there, we had to make sure that the cleanup was paid Like. There was a lot involved in the whole process.

Speaker 1: 13:44

Yeah, we actually just went through one recently where and I'll reference it a little bit today but we had well, it was a double whammy. So basically it was a double broker. So we had a newer guy at our company and he got double brokered on and it was onions that ended up freezing because there was issue with the reefer not being set properly. But anyway, it got accepted by the receiver and then afterward they're trying to file a claim. So now there's big dispute about like who's at fault? Um, basically, like everyone's a little bit at fault shipper, receiver and carrier. But uh, oh, yeah, they. Okay. So this is what it was. They sent in a I've told stories like this, but it happened again. They sent in a vented van and had propane tanks in it Again.

Speaker 2: 14:46

Yeah, this is not the same thing.

Speaker 1: 14:48

I've ever seen, anybody I've ever talked to they had two propane heaters and they tipped over, Um, and the guy told them like, hey, the customer advises to take the southern route to avoid the colder temperatures. Um, and they didn't. And either way, we had there's frozen, some frozen onions, but the customers a little bit at fault for loading them, knowing that it was not the right equipment. The broker got, uh, double brokered on and the receiver, well, the carrier obviously was the one hauling it and the tanks didn't keep the temperature right and the receiver accepted it. And then they're like oh, it's damaged, we had to file a claim. So we're dealing with double broker trying to figure out a claim. And now it's like, well, since it wasn't rejected and there's going to be a claim on a delivered load after the fact, now the customer is disputing, pain, the freight book, paying the freight bill when they legally have to, because we legally have to pay the truck because it was an accepted shipment, not a rejected shipment with a claim. So it's a mess.

Speaker 2: 15:55

I have like three or four questions Go ahead, man, that's what we're trying to get right. So the first question I have is what commodity? Was it Onions, Okay? Second question I have is and I've never thought about this until you just said that was if a shipper tells the carrier what's route to drive, Like we can't as a broker, but a shipper.

Speaker 1: 16:18

So that's a really good point. We, what we do, is, on the rate confirmation, we have verbiage that states per customer's request route must, must take Southern route. But it's not like us telling them, hey, we're dictating where you go, like, no, this is a contingent requirement from our shippers that you have to. It needs this equipment needs to be set this temperature and you need to, you need to take a Southern route so you're not hitting extreme cold weather in the wintertime. Okay, so what was relaying a customer's requirement, got it.

Speaker 2: 16:52

So third question right Is how did the double broker slip through what it was?

Speaker 1: 17:00

just lack of vetting. So the load was supposed to pick up on a Tuesday, I think, and ended up showing up on a Friday and a different he. He didn't even know. Like I said, he was new to the company and didn't know our process fully yet. But he after the fact found out the truck that delivered it was not the same truck and company or MC number that he had hired. So it was. It was a. It wasn't a like the fraud you see, where they're trying to take a quick pay and get away with it. He legitimately just rebroke it to somebody else with, like you know you think, intent to pay, but who knows? But yeah, just didn't, didn't get pictures at the pick up or verify a slew of things, so yeah, Now the third question.

Speaker 2: 17:52

Now now get into the claim process. So the load was delivered, which means the receiver signed it clean, put the signature on it, which, to your point, means you've got to pay the carrier regardless of what happens after that fact. Right, maybe we don't jump into this one, because this is the second question. We don't jump into this one because this is, like, it's a pretty complex. Yeah, like let's just go through a standard load gets picked up, load gets delivered, they don't want to sign for it and they mark that 25% or maybe all of it. Which. What kind of example do you want to go through? Do you want to put this stage?

Speaker 1: 18:23

Let's go through a non food one, because we've talked about USDA inspections in the past, because what we're going to talk about here, still, all this will apply. But in addition, when it's like food, if it's like produce, for example like onions, you can order a USDA inspection and they'll come out like we actually talked about this on an episode of Blue Book and what. But what they'll do is they'll come out and they'll give an objective third party report on the quality, like the official reported quality and quantity, that's, you know, not to standard of that product at the time of inspection. But so that would be in addition to what we're going to talk about, but like a normal claim. What will trigger a claim? Well, it's going to be damaged product, shortage of product. Those are I mean, that's like your, your main two, right, it's either damaged or what's missing. So we're going to file a claim.

Speaker 1: 19:20

Damage is, like your, most common. So it could be that it wasn't secured properly in the truck and it tipped over. Obviously, we mentioned reefer stuff it could melt or it could get too warm, too cold. You could have accident, like you mentioned, right. So they get a car accident and or they get in a vehicle accident and the stuff gets damaged from the accident, like the case with the burning. Either way, right, the product's damaged. So where where this gets properly annotated would be upon? You could usually know about it when it gets delivered, right, they get to the receiver, they pop the trailer open and they're like that's not how it's supposed to look, right, whether it's damage tipped over, there's water, like there's liquid leaking, there's all kinds of ways it could happen. But either way, that stuff needs to be annotated on the bill of lading.

Speaker 1: 20:14

When you look at a bill of lading, which is a legal document, that follows that it follows the possession of the freight throughout it, right, the customer, the shipper, signs off that hey, we loaded 20 pallets, boom. And then the carrier signs off I'm accepting this load, right, and this is what the what here's, what's on here. And then the receiver is the third person. They sign it Yup, I am signing that I've received this quantity. And if there is a, if there's damage, that should be annotated on the bill of lading by the receiver to cover their butt. So that way they're not at fault for it for any reason, because you, what you might have, is somebody that receives a product. They damage it, like maybe one of their, maybe one of their dock workers jabs away the forklift by mistake and they're like, oh my God, it showed up damaged. He was like, well, no, it didn't, you just accepted it and it signed right here. So that is that makes sense, right? Like how the standard thing would go product damage and that's your makes perfect sense.

Speaker 2: 21:15

Like, and that's where I don't want to go through the example you just said first because, like I have a lot of questions about this, because I haven't run into that specific instance, we can ask after. So you're right, keep going, go from there.

Speaker 1: 21:30

Yeah, so the the receiver can reject the product they can reach, or they can accept it as but annotate that it's damaged, or kind of like a common one. So let's go through one. Hold on, let's go through one by one, cause I think it's helpful. So your options.

Speaker 2: 21:46

Load gets delivered First is receiver says rejected. What happens from that point forward?

Speaker 1: 21:51

A couple I mean it could be a few things You're definitely going to want to get with your customer about it, like the shipper, and keep in mind, like we always say, bad news gets worse with time. So as soon as you have an inkling of any kind of claim, you should be talking to your customer and whoever manages claims within your brokerage whether it's yourself, if it's just you or if it's somebody else in the company Cause the customer might say okay, here's what we do when this happens. Or they might say this is the first time it's happened. You have to figure this out, depending on how far away it is. Sometimes they're like just send it, just give it, bring it back to us. Or they might say we can send it. Okay, first option.

Speaker 2: 22:25

I want to go through the one by one In first option the shipper tells you the receiver rejected it, or they find out the receiver rejected it. Go bring it back to us. Who pays the transportation fee? To take the little way back to point A?

Speaker 1: 22:39

Well, it depends on who's at fault and the finding of the claim the result of that, the result of the claim, is what's going to determine that, if the carrier is ultimately at fault, we'll go back a second.

Speaker 2: 22:50

So right now, in the scenario my load was supposed to deliver an hour ago, I got a call from my carrier. They rejected my load and he goes what am I going to do with this? I call the shipper, and what if they say I mean, I guess, if it's obvious, I mean I can't imagine the shipper is just going to go, I'll pay the freight bill to bring it back. And I guess it matters like where we think the claim was, like was it because it wasn't hauled correctly or handled correctly, or because-.

Speaker 1: 23:20

Yeah, I mean it's going to all be situationally dependent. It's usually somewhat obvious who's at fault, right? Yeah, like you kind of know, like if it was loaded and it was good and then it shows up and it's damaged, nine times out of 10, the carrier did something wrong.

Speaker 2: 24:45

Yeah, well, and in that scenario-.

Speaker 1: 24:47

I mean probably more than nine times out of 10. Okay, I believe 99 times out of 100. And I'm just, you know, don't quote me on that stat, but it's oh no, if it was good when it was loaded and it was bad when it arrived, it has something happened in the middle.

Speaker 2: 25:00

Right. So in your normal scenario where the carrier will say would maybe be obviously at fault. You know, I'm trying to think of even an example that just like really makes that obvious. I'm like, because even some of the ones like that I've had I mean reefer breakdowns.

Speaker 1: 25:16

That's like a common one.

Speaker 2: 25:17

Yeah, reefer breakdown.

Speaker 1: 25:18

It's like you just get in, produce a lot, right. It could be that the reefer unit broke down or malfunctioned, or they didn't put more fuel in the tank for the reefer unit, right Okay?

Speaker 2: 25:32

Well, in that scenario, and they go, hey, all garbage. And the shipper goes I gotta imagine if it's produced. Or the shipper says, don't bring it back to me because yeah, there's usually food items.

Speaker 1: 25:43

Sometimes they can salvage a portion of it and then the claim would be the part that was a loss, like maybe half of it or less. But there's oftentimes places they can go dispose of it and these receivers for food items, this stuff, is part of regular business, so they're going to tell you like you can go dump it here, or there's a food bank that will take this. It just doesn't meet our standard, but the food bank can decide what they want to take and the rest can be tossed and they might be able to accept a portion of it. So it really all depends. But let's say, for example, it's an expensive piece of machinery that's worth $500,000 and it got damaged somehow because it's an open deck. They didn't have it tarped or something right, but it's good for that one.

Speaker 2: 26:28

They're going to want it. It's the one that went through my mind. You can fix it. You know what I mean? Okay, so go through one right. So you loaded a flatbed right and it was supposed to be tarped and it wasn't, and it was lumber and it's soaking wet and they reject it right. On the other end, does the shipper have any responsibility that it wasn't tarped, or is that all in the care and is that always on that?

Speaker 1: 26:49

I think it depends on. I mean, I would probably say they, yeah, I would say they, probably they share some responsibility for negligence, knowing that they loaded it and let the guy drive away without it protected. That's kind of like the situation that I mentioned just here. Like the carrier, the shipper, loaded not a reefer but a van with propane tanks in it, like come on, I know, I know people do that, it's stupid.

Speaker 1: 27:18

But when it gets screwed up you're kind of at fault a little bit. So yeah, I would say, but here is the deal that and we should probably get into the claims process and what it, what it all does. But at the end of the day, like the customer might say I'm not eating that, like I need to get paid for this. But if a claim gets denied by the insurance company because three parties involved were all idiots and what happened is not part of the claims coverage, they're gonna say the claim is denied and now you've got, let's say, a $50,000 loss. So either everybody chips in a little bit to take care of the customer and the customer reads them, or the customer just gets screwed and never use the broker again. Never use the broker again, or that carrier, if it was a carrier. So let's go through yes.

Speaker 2: 28:10

Okay, I'm going to say let's go through what is in a standard. If there is such a thing claim on what happens, like timeline what can you expect to do? Receiver calls you and says you set the stage and tell me steps.

Speaker 1: 28:24

Yeah, so you know, let's we'll assume it was the load was delivered and they annotated that it was there was damage, right, but they but they accepted it and they want to be compensated for the loss. So what will happen is the insurance company that we're referring to here is the carriers insurance company and this is going to be their. They're the primary cargo insurance holder and what that insurance covers is the freight that's on board their truck, not the truck itself. It's a car accident. That's a different like. The cargo policy covers the cargo, and then you've got, like your, your auto liability and everything else that's going to cover the everything that's not the freight, but in this case, the motor carriers in cargo insurance is who the claim will be filed with, right, and this can be filed by the shipper if they work directly with the carrier or if it was a broker involved, like us, right, and one of the value adds to a customer is that, hey, we will handle the claims process for you. We, you're the beneficiary of the claim. The motor carrier carries the insurance. It doesn't involve us whatsoever. But part of our job to take care of both you and our carriers is to handle this claims process, and that's typically what happened.

Speaker 1: 29:42

So you typically have some sort of it might be it depends by the company but you might have a standard like claims packet that you fill out. I bet the larger companies probably has something that's very like systematic and was approved by lawyers and whatnot. We just do a basic presentation it's going to have. We're going to compile a PDF that's got you know, pages of you know what happened, communication, pictures, timeline, et cetera, right Everything that the adjuster from the insurance company is going to want. And if you don't know when you go to file the claim they're going to tell you. You know, if you've been in business long enough you've done claims, you kind of know what they're going to ask for. So that way you can have it all ready to go and packaged up and get it to them.

Speaker 1: 30:28

The reason that a lot of claims take so long to pan out is because people are you're waiting on somebody to do something and don't let that be you Cause the faster you get a handle, the faster your customer gets made whole. So I've seen claims take six months or longer because there's so much back and forth. You're caught in drive very straightforward once you can handle that in a few weeks or a month, so long as everybody's being diligent in doing what they have to do quickly. But the takeaway here is that we are filing a claim on the carrier's insurance on behalf of the shipper who is the insured party or the the beneficiary of that payout, and then eventually that check would be cut. Um, is that? Do we? Basics covered there One on one.

Speaker 2: 31:10

Yeah. So again, just to reiterate, there's a claim signed off the receiver. They don't want to receive it because it's damaged. They denote the bill of lading but they accept it, not rejecting it with saying what's damaged. So you get the BOL. Care says hey, our customer, sorry receiver, to be specific, as hey, 45 or half of these pallets are damaged, I they denote that on the BOL. We want to file a claim. Right, you have two choices from that point forward.

Speaker 2: 31:38

The care can technically take care of it without the brokerage, but most brokers do this as a service to their customers, the shipper, since they are the ones usually named on the certificate. That's why it onboarding. They ask for that, by the way. So you are basically going through lining out everything that happened in writing, a report, step by step, from pickup to delivery, what occurred. This is why your notes are really important in your TMS, so that you have them all there. You upload all the documents, send that over to the insurance company. That then usually reaches out to the carrier for their side of things to verify everything they put together. I guess they also reach out to the shipper too and then they just pull all three pieces together for the company.

Speaker 1: 32:20

I know they reach out to the carrier. It might depend on the situation, but usually we're the one that's anything shipper related. We're going to be the one presenting or we're taking care of that for them. We might have to go to the shipper and say, hey, can you send me over X, y and Z? I need it for the claim. There's no rule on how it has to be like, who has to be involved and what place. All that matters is that it's being filed on the carrier's insurance, with the beneficiary of the payout being whoever's freight it was. But the carrier can file it on behalf of the shipper. The broker can file it, it doesn't matter. Here's something to note, though Insurance policies have deductibles.

Speaker 1: 33:06

The car insurance you might have a $500 or $1000 deductible. The deductible is hey, we're going to pay the first X amount of dollars and the coverage kicks in for the rest of it. If you have a carrier that has a high deductible, such as $5000 or $10,000, this can be dangerous. This happened, I've seen this. I shouldn't say I've seen this. This just happens. It's happened many times with my company that I work for and with other people that I've talked with, where we've had damage that's less than the carrier's deductible. So if they have a $10,000 deductible and there's 5K in damage, you're not even going to file a claim because they're not going to pay anything out. So now you're just asking the carrier hey, you owe us $5000 for damages that your insurance doesn't cover. Is the carrier going to pay? No, they never pay. So you end up losing money as a broker there. It's a very, very dangerous position to be in. So the lower deductibles that's your ideal situation. So just keep that in mind.

Speaker 2: 34:11

But yeah. So what are some best practices for preventative or to make this better?

Speaker 1: 34:19

I mean attention to detail is huge. We have a dispatching checklist you can download on our website in the resources section, and some of the things on there is special instructions. Make sure when you are talking to your customer you are asking almost ask too much. It might feel like you're asking too much to my details, but you want to know, for the open deck example, how does it need to be secured to the trailer? What protective measures does it need to have? In the instance of the onion one that I mentioned, if there's a certain requirement that the shipper customer has to prevent risk of freezing, which could be take the southern route or needs to be in a reefer that's preset to a certain temperature and is on continuous, instead of hey, we're going to load a friggin' van with propane heaters, you have to verify all this stuff and then on the other side, you need to reiterate that to your carrier, and it might be multiple times, multiple different ways. It could be just putting on the rate confirmation. That might cover your butt, but it doesn't stop the fact that there's a claim. Your customer is going to be frustrated, so make sure you talk to the carrier. Hey, I just want to remind you, this is the temperature it needs to be set at. It's on the bill of lading, it's on my rate confirmation to make sure you pre-cool. If it's in the middle of the summer it's got to be set to something very cold and it's going to take a bit of time to reach that temperature. They can't just flip it on five minutes beforehand. It's very, very big. Those trailers are big. It's a lot of space to cool down. So yeah, I mean just attention to detail, Ask questions, verify and then trust.

Speaker 1: 37:25

To verify that whole phrase you can trust that your carrier is going to do the right thing. But I'm a huge fan of always asking for the driver Take a picture of if it's an open deck, take a picture of it when it's loaded up, Send it to me. And that can be used for multiple reasons. But one of them is like that is also evidence that could be used in a potential claim down the road. You know that driver is going to take pictures if they see something that's damaged and the receiver is definitely taking pictures when they see what's damaged. So pictures are great. Try and think what else Some of the open deck equipment types.

Speaker 1: 38:03

So let's say you have a low boy versus a flatbed. You can have different height requirements on it, and this is more so general than just claims. But if something is too high and you clip an overpass or you can just have the truck get rejected because it's not the right equipment type, verify with the driver. Hey, just to make sure you're going to be pulling up with this specialized type of equipment, not a standard flatbed, Right Stuff like that.

Speaker 2: 38:31

Yeah, it also reminds me of, like, just the profit side of the industry, right, the higher the claim percentage usually, the higher the margin and the higher the rate is to ship it. Right, like a lot of the steel coils I used to ship, we used to ship the ones that they used to make beer cans out of, to course, so super low gauge, really, really, really thin aluminum, right. And I remember their loading protocol was it was bubble wrap, cardboard I think, then like a moving blanket, and then cardboard again. Right, and I remember still to this day, right, I had pictures to your point, because we were doing these weekly and they were the highest margin of all the coils and even the shipper knew that. Right, they're like, hey, a lot of our carers don't want to run these because they're just very high claim percentage. Like we'll pay you a little more to take these over your regular standard coils, right.

Speaker 2: 39:28

And like the second load we shipped, I remember talking to the driver. I was talking to him in Ohio and he was like, hey, I'm parked under an overpass because it's hailing and I don't want any of this to be damaged, even though he did everything that was asked, right, and he sat there underneath the road and absolutely waited, so we had it. We had to delay the shipment and everybody was okay with it. And still, when that thing got delivered, they showed me pictures like it had little dents in the coil even through all of that right Like a moving blanket, bubble wrap, cardboard and, I think, a tarp right.

Speaker 2: 40:04

And what we learned? Because we did a lot of business with the receiver too, out at cores, and they were telling me they're like, yeah, they're like, these are like, almost impossible to ship without a claim. I think they told me at the end of the day, like 30 or 40% of those coils, no matter what they've done, end up with some claim. And he goes here's the kicker, right, it seems like a really big coil and it looks like a really little dent, right, but that shit was so thin that like even a little dent basically made like hundreds of yards of steel useless because they couldn't use it and basically they had to send the whole thing back. So, again, everything we talked about related to claims, but it's also reminding me of just like. Those are the ones we put our better carriers on. We, overprotected, always took pictures.

Speaker 1: 40:47

You're going to deal with claims because there's just no way to avoid them in some of these areas, I'm not only shocked they wouldn't get smart and just use like a kind of stoker or something we did.

Speaker 2: 40:54

We used kind of stokers when it all possible, but I remember the volume was just high enough that like we couldn't get enough, and then it sucked up a lot in the around the steel mills. Yeah, you're absolutely right. And yeah, I mean just that one instance, because I remember this guy just did everything correct. I remember looking at the pictures and then looking at the claim and it was just like, yeah, I mean, like I didn't really know what you do at that point, like I mean.

Speaker 1: 41:16

So I want to point something out too that we it's kind of administrative, but people are like all right, so claim, what about, like the freight bill?

Speaker 1: 41:25

Like, does it get paid, does it not? And typically and I've seen this written in like literally in contracts that freight claims are considered separate from freight invoices and should not be withheld. So like, basically, customers should still have to pay their invoice even if there's a pending claim. The reality is they never do it, so like if well, here's like a common practice, if there's a claim that's going to be filed, everything just freezes, right, we're not going to pay the carrier right now, we're not going to expect payment from the customer right now. We're going to get this claim, we're going to go through the claims process, get it resolved, figure out how much money is being paid out and if there's that deductible that we talked about, right, we might not get all that money from the carrier and the insurance company in total and there might be a little bit of a loss there. Then we have to figure out, okay, is the carrier going to get paid or not? And typically they don't, right If it's the carrier's fault. Common practice is just like we're not in voice. The customer's not going to pay, carrier's not going to get paid. It is what it is.

Speaker 1: 42:36

Now an interesting one in the onion instance I brought up earlier. It was delivered and it was accepted, and now they're filing a claim after the fact, on a delivered basis, which means that legally we're bound to pay that carrier for their services because they fulfilled what we hired them to do. And now the customer wants the claim filed after the fact. So it's kind of a. That's why I always say, like bad news gets worse with time. So had this been annotated or rejected immediately, wouldn't be dealing with this situation. But now there's going to be some loss there to be absorbed.

Speaker 1: 43:13

But yeah, a little note there on if you still get paid or not. And people get paid right, because you expect to get paid on this stuff. But the kind of insurance policy is they all cover different stuff. I've seen them where the claim covers the cost of additional transportation if, like, somebody has to go get salvaged or, I'm sorry, dumped and they're salvaging the rest of it. Yeah, I mean it's it's. There's all kinds of situations here. We should bring in a we've done insurance episodes. We should bring in someone who's like a claims expert to go through like from their perspective, because that's all they do.

Speaker 1: 43:50

You and I are just exposed to it.

Speaker 2: 43:51

But, stephen, can you make a note to look on LinkedIn and see if you could find anyone that just does that? I mean someone in our network. I'm sure we know of somebody that I'm just not thinking of that probably sits and does that on a daily basis, but it would be a really good interview for sure.

Speaker 1: 44:06

Good deal Perus for Stephen behind the scenes. Oh, he actually added something in there too. This is interesting, so fun though. Fact ice cream and bags of chips cannot exceed 5500 feet elevation, so we have to send them the southern route as well. Yes, I've never come across that before. That's interesting. So well, cool, appreciate the tip there, stephen, and the advice.

Speaker 1: 44:27

We'll see if we can get somebody in the claims realm to come on the show and pick their brain on it. But yeah, I guess to put a bow on this is one would say, just as soon as you have an inkling that there might be a claim, get everybody who needs to be involved involved. Right, so you want to have a very good electronic footprint, timestamps of events, who you called, what they said, pictures that were taken and sent, et cetera. That stuff is going to make the claims process very smooth. Where they get drug the drug out over a long period of time is where there's conflicting information. One person suggests one thing and other person's evidence suggests something different and that's where it gets very, very messy. At the end of the day, it's like if you get in a car accident. They're going to deem somebody at fault or partially at fault and we're at the. The insurance company is going to either prove or deny, we're at the mercy of that.

Speaker 1: 45:30

So if you can prove everything that you need to prove, that's good.

Speaker 2: 45:35

That's what I was getting at and I think one of my takeaways and for anyone out there, when I think about all of the claims and there's more claims for some commodities and other commodities just keep it simple If you do everything that shipper asks you to do within their agreement and their conversations with you for the requirements of a load, if it's a flatbed, the tarps, the securing of it, every aspect of it, and a second one is, let's say, it's produce, if you make sure, whatever that shipper tells you, you got to pre-cool that trailer, better pre-cooled, because the risk isn't really just on us, the brokerage, like we pointed out, it's also on the carrier, because it's the carrier's insurance.

Speaker 2: 46:14

So if you've got a good relationship with a carrier and hint this is why we talk about having good relationships with your carriers to be able to use them over and over again they're more likely to understand the shippers protocols and to do what they're supposed to, because they've done it before.

Speaker 2: 46:30

But more importantly, what you pointed out, nate, is it's like if you can get the carrier to do all of the things that you would do if you were on site, like take a picture of the way it was secured, making sure you had verified that you pre-cooled it and, more importantly, verify that the cargo going into your truck right was the proper I don't want to say quality but in the right condition before you've left right, like to your instance.

Speaker 2: 46:56

What that means in produce is did you pulp it? Did you make sure that that produce was getting loaded into your truck was also pre-cooled, just like your trailer? Because where I see the most call it like I don't want to call it like criminal, but like disingenuous shippers that will load a truck with things that probably should have been loaded correctly and then blame the carrier when it's claimed on the other end. The only way you can really reduce that risk as a broker is to make sure your carrier is doing due diligence when they're loading it right. If you're going to ask me to pre-cool a trailer, those cantaloupes better be at the right temperature and better not have been sitting out in the sun all day and you put them into the refrigerator 15 minutes before you know. Unload them into my truck.

Speaker 1: 47:39

I want to add here too, because different shippers have different loading policies, right? Is it shipper loading count Meaning the shipper is the one that's loading it onto the trailer and counting everything and putting it onto the BOL? If that's the case, the driver didn't necessarily have a way to be able to see this stuff right. We've had issues where the driver tells us, like I wasn't even allowed to see what, like how it was getting loaded or who loaded it, right, whereas obviously in other situations, if you have a flatbed, you're going to see it getting loaded, but if you're backing up against a warehouse or distribution center and you're not allowed in there and they're going to put a seal on it, like you don't know Exactly but all the better.

Speaker 1: 48:20

I think the danger is that you're the one driving, you want to know where the weight's distributed and how it's secured, because it's going to affect your vehicle handles. So anyone that has driven a class A truck before or a large vehicle or moving truck for that matter right. So like having weight too high is one thing. Also, like driving on snow, where the weight is distributed over your axle, is going to affect your traction. So like this is a thing where drivers should be very it's in their best interest to understand how and where things are loaded on their trailer.

Speaker 2: 48:54

Yeah, and again I want to make a point like this isn't always possible, Like you pointed out. I guess I would say it's like if and when it is possible, do as much of this as you can. If I'm driving a truck, if I can look at it, I'm going to. If I can take a picture, I'm going to. If they don't let me, I'm going to note that in my logs too, to make sure I let the broker know this is the scenario, because I think you're just right.

Speaker 2: 49:15

They write SLC BOLs for that, yeah, and it's like I've seen carriers get screwed in these scenarios where they did everything they were supposed to, the shipper didn't do what they were supposed to and they did that just to blame the carers insurance right.

Speaker 1: 49:27

Yep, good deal. All right, that's good enough. On claims man, we can go down a rabbit hole, but I don't want to get too deep because we can do another episode where we talk in detail with either a claims analyst or maybe from an insurance company that handled the actual claim process. Check out our episode about or with LoadShare as well. They're a really cool single load first position insurance coverage that brokers can buy for their customers. We had a really cool talk about what goes into a cost for insurance and especially those all risk policies, and talk through some exclusions and stuff like that. We didn't even talk about excluded commodities, but that's another thing. I'll just add it at the end Make sure that the commodity that you're hauling is not excluded from the carrier's cargo policy, because that will definitely be the night lane and your customer is going to be screwed and you either have to make them a hole and pay for yourself or lose a customer. So that is all you got anything. I didn't get any more proverbs to give us today.

Speaker 2: 50:28

I thought, nah off top of my head, Fair enough.

Speaker 1: 50:32

Well, good deal man. Final thoughts.

Speaker 2: 50:35

Whether you believe you can or believe you can't, you're right.

Speaker 1: 50:39

Until next time, it's officially the 2024 NFL season in my mind.

Speaker 2: 50:43

Go Bills.