How To Deal With Shipping Variance

June 5, 2020

We’ve all seen it before. The truck rolls into the shipping dock, the door slides open, and the inventory rolls into the bay—only to reveal a truck full of the wrong items or damaged goods.

Such is the nature of shipping, which is a risky and unpredictable process. Even with all the new technologies making their way into the space, issues will rear their ugly heads from time to time. In this business, there’s no way to avoid them.

That being the case, shippers need to know how to handle discrepancies when they arise. Drivers need to understand how to deal with receiving personnel and the subsequent reporting process. Failure to know how to identify and mitigate such discrepancies can have an enormous impact on a trucking company’s bottom line.

One of the most important protocols to follow in this case is the over, short, and damaged report (OS&D).

Paperwork in general is a thorn in the side of the logistics industry. Thankfully, the paperless revolution is well underway. We’ll highlight some best practices for how to reduce OS&D paperwork problems later in this post.

But first, let’s take a closer look at this critical report—including what it is, who’s involved in creating it, and the issues that organizations commonly run into with OS&D—as we examine its role in the shipping process.

What Is an OS&D Report?

When a shipment is over, short, or damaged, the receiver of the goods, or consignee, registers an OS&D report. This report or claim lists every detail about the goods that arrived incorrect or damaged. The consignee gets a copy of this report, and so does the driver.

In both cases, that report then gets delivered to the appropriate employee for further steps in the claims process.

The OS&D report provides a detailed rundown of the incorrect or damaged items at the time of delivery, based on the following classifications.

1. Over Shipments

Overages denote shipping quantities that exceed those specified in the shipping documents. For example, a truck may deliver 100 crates of orange soda when the customer bought only 50. And that customer might not want or need the extra 50 cases.

Most of the time, overages are sent back to the vendor. However, in certain cases—such as when the sender has excess inventory on hand—the customer may agree to keep the extra items and adjust the bill accordingly. Doing so could potentially reduce future shipments, thereby saving money.

This, however, requires instant processing and communication with warehouse personnel or a trusted customer-distributor relationship.

2. Short Shipments

Shortages describe shipment quantities that are less than the number written on the shipping documents. In this example, a truck may bring 50 crates of cream soda when the customer was expecting to receive 100 crates.

Before signing an overshipment or undershipment report, it’s important for the driver and receiving party to thoroughly inspect all shipping documents. It’s also useful to check whether the truck is operating as a dedicated delivery or if the driver has multiple stops to make. When a customer at one location receives too many of a particular item, another customer at a different location might experience a shortage.

3. Unsatisfactory or Damaged

The recipient files a damaged or unsatisfactory claim when items arrive in a condition that differs from the conditions specified in the bill of lading. The BOL is the document that the driver signs at the time when cargo goes onto a truck and the buyer signs when the cargo is delivered. For example, a truck containing a shipment of flat-screen televisions may contain one or two products that crack during delivery.

In some cases, damages are easily detectable. In other cases, customers might not realize products are defective until further inspection, requiring additional claims.

Now that you know how an OS&D claim arises, let’s look at who processes them.

Who Handles OS&D Claims?

OS&D handling tends to differ from company to company, depending on the size of the operation and the number of personnel on hand.

In a small shipping company, a dock supervisor or warehouse manager may oversee daily OS&D management. Large shipping teams often employ an official OS&D clerk whose main responsibility is to manage and process all overages, shortages, and damages.

OS&D clerks typically work with dock supervisors, loading teams, and drivers to prevent issues like “overages without billing” from occurring. OS&D clerks may also be tasked with managing shipping documents, such as load sheets and bills of lading. They also are responsible for managing ongoing OS&D claims.

Common OS&D Issues Companies Face

The OS&D process may sound cut and dried. But issues often arise, complicating deliveries and resulting in billing and customer service issues.

Here are some of the top issues companies face with OS&D.

1. A Lack of Strategy

OS&D issues can be a customer service nightmare, especially when they happen consistently. This often happens when companies don’t have OS&D strategies in place or the mechanisms to identify trends and patterns in OS&D. In those scenarios, an inefficient approach causes the same problems to persist over and over again.

What are some best practices for the OS&D process?

• First, know what to look for. Train your staff in ways to identify exceptions.
• Create a process for logging detailed reports. Digitization makes this easy.
• Train you staff to understand the difference between recovery value and return costs.
• Create the OS&D report immediately. Delays in reporting reduce probability of favorable disposition.
• And lastly, utilize a reporting tool like the Vector app to create an accurate, digitized paper trail.

2. Long Processing Times

OS&D issues can leave customers in the cold, without products they need to run their operations. In some cases, it can take days or even weeks for paperwork to clear or for items to get back to their destination. This can anger customers or cause them to seek new distributors.

3. Missed Claims

OS&D claims need to go back to shipping clerks or dock supervisors. However, for a variety of reasons, this doesn’t always happen. For example, sometimes claims get lost in the shuffle. This can delay resolution times and further anger customers.

“Okay, I know what the problems are,” you might say. “Now how do I fix them so we keep making money and nobody’s mad at me?”

How to Lessen OS&D Paperwork Problems

As you can see, many issues can arise from manual, paper-based OS&D processing.

Shipping, like all industries, is now going through digital transformation. Increasingly, businesses are replacing traditional processes like OS&D with digital systems that provide seamless, automated service.

For example, Vector has a customizable mobile app that you can use to manage OS&D in an orderly fashion. The app lets you easily report all overages, shortages, and damages at the time of delivery, reducing response times and making things easier for everyone.

Using a mobile app to streamline OS&D can lead to the following benefits.

1. Accurate Reporting

OS&D clerks no longer have to worry about forms with missing, incomplete, or illegible entries. Employees can enter all information easily through the app, providing clean data that’s easy to read and process.

2. Photo Evidence

The Vector app contains photo functionality, meaning photos no longer have to live on employee smartphones or third-party apps. This is a safer and more efficient way of processing photos.

3. Instant Delivery

OS&D reports can go instantaneously back to headquarters, allowing management to take immediate action to rectify a situation. If the situation allows, you can send back incorrect orders that same day to customers, expediting response times and reducing complaints.

4. Advanced Issue Tracking

Using an app, warehouse personnel can collect data over time and use it to streamline operations. For example, in the case of OS&D, it’s possible to flag and remediate repeat issues so they don’t keep occurring. This can lead to a major boost in customer service.

Take Control Over OS&D and Solve Shipping Variance Issues

If your company is suffering from inefficient OS&D processing, it’s time to take control of your operations. By moving to a modern digital solution, you can increase efficiency, profitability, and customer satisfaction.

There’s no sense in making OS&D issues any harder than they need to be. With companies such as Vector, you don’t have to.

You can work with a company such as Vector to streamline your operations, thereby improving customer service and reducing issues over time. It’s the easiest way to overcome OS&D issues and build a more efficient operation.

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This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling.