In a perfect world, every delivery would contain the correct amount of cargo and be delivered without any damage. Unfortunately, large-scale cross-country delivery operations are more complicated than that. Products often move between multiple carriers and distribution centers before reaching their final destination.
There is a system in place to compensate shipment receivers when the cargo that arrives does not align with what they ordered. Whether this error was the result of a simple mistake or due to poor load planning, keeping track of it can help avoid similar problems in the future. Aside from missed deadlines, most of the issues that occur with cargo are recorded through OS&D reporting.
What Does OS&D Stand For?
To understand how transportation analytics are kept, there are some trucking terms that need to be understood. OS&D stands for overages, shortages, and damages. These terms are used to describe discrepancies between the freight that arrives at a warehouse and the bill of lading (BOL)—which describes the shipment. All three pertain to the quantity of goods shipped or the quality they are in when delivered.
An overage is when the consignee‚or shipment receiver—gets more inventory than what is noted on the BOL. While this might seem like a good thing, this surplus of product must be addressed. Too much inventory can cause storage issues or lead to revenue deficits. Extra freight can be sent back with the carrier or tacked on to the shipment and billed appropriately.
Shortages are the opposite of overages, meaning the consignee receives less than what the BOL specifies. All billing, inventory, and order management must be altered to account for shortages. Shortage claims are easy to file as long as the shortage was noted on the BOL.
Sometimes a shortage is not noticed immediately and therefore not noted on the BOL. This is called a concealed shortage. Proving a concealed shortage claim can be difficult, as carriers push very hard to have these ignored.
The key to succeeding with a concealed shortage claim is filing as soon as possible. A carrier will likely deny a shortage claim if it takes more than five days to notice the missing freight.
Assuming the correct number of packages are delivered, there is still a risk of the freight being damaged when it arrives. Damaged shipments are typically accepted, documented in the BOL, and reported with a freight claim for compensation.
In some cases, the damaged part of the shipment may not be visible for inspection upon initial delivery. Concealed damages are similar to concealed shortages and may be more difficult to recover compensation for. Concealed damages should be filed within five days of the shipment being made, especially if the BOL is already signed.
What Is an OS&D Report?
Overage, shortage, and damage reporting helps the consignee compare the shipment to the BOL. They will carefully inspect all delivered materials and look for damages, shortages, or overages. If anything does not match between the documents and the cargo, the OS&D form can be used as a basis for filing a freight claim. Both the consignee and the delivery driver will receive a copy of the OS&D report.
OS&D Freight Inspection
The entirety of the inspection for OS&D logistics is also detailed on the BOL. If there are no discrepancies between the BOL and the shipment, the consignee will sign off on the BOL as a carriage contract. The shipper loses leverage in filing an OS&D freight claim after clearing the BOL. If there are discrepancies, they will be noted on the BOL or the proof of delivery (POD) document. These can be integral in freight claim resolution.
If damages or shortages are discovered after a BOL has already been signed free and clear, the carrier should be notified as soon as possible. Most carriers will push back against concealed claims, especially if they come after a few days have passed.
Whether you are the carrier or the consignee receiving a shipment, OS&D claims are an unnecessary pain for both parties. They cause unexpected delays, surprise expenses, require time to complete, and leave customers unsatisfied. And returning shipments can mess up planned routes and waste valuable resources.
OS&D issues can also lead to disputes between carriers and receivers, which may cause larger problems to develop. Relationships in the trucking industry are based on reliability and trust. Before you get caught up in the heat of OS&D claims, be sure you know what you are aware of all the details and implications—regardless of your stance.
Bill of Lading (BOL)
When products are shipped to a distribution center or warehouse, they must be inspected by the carrier and shipper. The BOL outlines the count of products which arrive and what condition they are in. Each party will look over the BOL and confirm that the freight is adequate before signing off.
Once the BOL is signed, the title of the product is transferred to the warehouse. Also called a “free BOL,” this means everything is as it should be and there is no recourse for an OS&D freight claim.
If there is a discrepancy or issue with the freight, the shipper has nine months to submit a claim for damaged goods. For this claim to be successful, there must be enough evidence to back up the complaint. Even though the shipper has nine months, the longer they wait to file, the less likely their claim will be successful because evidence becomes harder to present.
If the consignee is filing a claim for a lost shipment, they have nine months from the expected delivery date or nine months after the delivery is determined lost.
Claims filed after the nine month period expires are not valid and will not warrant compensation from the truck carrier.
The consignee can refuse part or all of a shipment if they are not happy with the condition it is in. Refusals are justified if the freight is damaged or if the product is wrong or late.
If the freight is refused, it will be returned to a carrier’s delivery terminal, after which the carrier will typically receive three options for the cargo:
- Send the freight back to the origin address.
- Send the freight to a new address.
- Dispose of the freight according to company policy.
If the claimant does not file the refusal within five days, the carrier which handled the shipment is more likely to deny the claim. The consignee should not have to pay the invoice for the refused goods.
Carmack Amendment and OS&D Claims
In the U.S., the Carmack Amendment places the financial responsibility for freight claims on the transportation carrier. Assuming there is no agreement excluding the carrier from liability, they will have to pay for successful OS&D claims.
Once the claim is made, carriers are required to acknowledge it within one month. A final disposition must then be offered in writing within three months. If the original claimant is unhappy with the disposition, they have two years to dispute the decision.
Syntelic Can Help You With OS&D Reporting and Reduction
Syntelic’s Transportation Analytics automatically keeps track of all OS&D freight claims. By inputting this information into a database, the program can consolidate seemingly random occurrences into indicative patterns. Along with keeping you up to date on all shipping discrepancies, our software will pinpoint areas where your distribution chain might be experiencing an issue.
These features can help minimize overage, shortage, and damage trucking issues and improve overall distribution chain efficiency. This saves you money, time, and helps keep your customers happy.
Reach out to Syntelic for more information if you think our products could benefit your company.