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How Building Materials Distributors Can Reduce Freight Claims and Disputes

Republished By Plato
Republished By Plato

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Freight claims and disputes are a costly headache for shippers, carriers, and third-party logistics (3PL) providers, regardless of the industry. Whether companies are dealing with claims due to damage or late deliveries, customer satisfaction, operational efficiency, and profitability suffer. 

For instance, a 2024 study of transportation decision-makers in different industries found that shippers reported an average less-than-truckload (LTL) damage rate of 1.94% in 2023 at an average claims cost of $3,777 per shipment, with larger shippers incurring up to $6.3M in annual claims for damaged, lost, and late freight.

The Construction Factor

While the bottom-line and reputational costs of freight claims and disputes are felt across the wider transportation landscape, the construction industry is particularly vulnerable. Unlike suppliers transporting uniform-size cartons of widgets for ecommerce fulfillment, for example, building materials distributors face specific challenges delivering to job sites: 

  • Short lead times
  • Wide variation of shapes and sizes of materials
  • Varying loading and unloading times
  • Different types of trucks (e.g., boom trucks, vans, dump trucks)
  • Specialized loading and offloading requirements (e.g., cranes, telescopic handlers, forklifts)
  • Custom requests from contractors
  • Extremely tight time windows

These unique factors jeopardize on-time delivery performance and increase the risk of damaged/incorrect materials or quantities arriving at the site, disrupting workflows, requiring reorders, and delaying progress for contractors. For example, if a distributor delivers lumber that arrives warped or broken due to improper handling, the contractor may file a claim for replacement or financial compensation, leading to project downtime and potential conflicts between suppliers and builders. 

5 Strategies to Reduce Freight Claims and Disputes

To ensure materials are delivered on time, to the right work site, in the correct quantities, building materials distributors need to adopt best practices — anchored by advanced last mile digital tools and technologies — around driver education and safety, load and route optimization, and customer communication. With a structured approach, distributors can protect margins, enhance operational efficiency, and build customer loyalty through fewer disputes and claims.

To limit materials damage and late deliveries, building materials distributors should consider the following strategies:

1. Invest in education and driver safety around load planning and delivery execution.

A well-trained workforce plays a critical role in minimizing damage claims and ensuring safe, efficient deliveries. By prioritizing safety education for warehouse staff and drivers—focused on best practices for loading, securing, and offloading cargo — distributors can reduce handling errors, improve compliance, and lower the risk of disputes. 

Although it may seem like common sense to arrange materials by weight and fragility to ensure heavier items do not crush lighter ones, or to conduct pre-trip vehicle inspections and use load-securing equipment (e.g., straps, bracing, non-slip mats) to prevent shifting during transit, best practices like these should be laid out clearly for drivers and warehouse staff as part of a comprehensive training program. 

Given the knowledge and expertise required to safely operate equipment used to move building materials (e.g., forklifts, truck-mounted lifts, cranes) while navigating on-site hazards, ensuring proper positioning of delivery vehicles, and securing the work area, investing in workforce education ensures a smooth and safe delivery process and reduces the likelihood of claims.

2. Optimize route planning to increase delivery density.

Transitioning from manual, paper-based routing to an automated route planning solution helps distributors dramatically increase route efficiency by cutting unnecessary fleet miles with fewer stops. With route optimization, distributors can reduce touchpoints to lower the risk of damage from excessive loading and unloading and maximize truck utilization while preventing damage-inducing overloading.

Precise ETAs and route consistency enhance delivery predictability to help job sites prepare for incoming materials and prevent unloading mishaps. Plus, with real-time data, distributors can optimize deliveries based on site conditions, avoiding congested areas and tight job sites to reduce the risk of transit-related damage.

3. Ensure safe and efficient unloading at job sites.

Even when materials are transported safely, improper unloading can lead to damage, disputes, and safety hazards. Drivers trained in the proper use of equipment play a critical role in ensuring that materials are offloaded correctly, reducing risks to both personnel and products.

Before unloading, drivers should assess job site conditions (including terrain, space constraints, and potential obstacles) and secure a safe work area by marking off unloading zones, keeping bystanders clear, and ensuring stable ground conditions to reduce the risk of accidents and materials damage. Job site teams should also be trained on safe unloading procedures to ensure consistency and prevent material mishandling and damage that can lead to claims. 

4. Employ electronic proof of delivery and condition reporting.

Moving from a manual, paper-based proof-of-delivery (POD) method to a digitized system greatly increases transparency to help reduce claims, resolve potential disputes, and speed up claims resolution. Electronic POD tools and processes enable building materials distributors to streamline delivery operations, ensure accurate deliveries, and enhance accountability.

Similarly, time-stamped photos are a critical element to help with claims exoneration because they document the condition of materials in real-time, as well as site conditions. For example, photos can capture product or site damage from driving on the property, or the proper setup of crane trucks for delivery, allowing distributors to document conditions accurately to reduce customer disputes.

5. Streamline communication with customers and job sites.

Clear coordination between distributors, drivers, and job sites—supported by real-time communication via mobile applications—prevents delays, reduces misdeliveries, and mitigates the risk of materials damage from mishandled deliveries. 

Building materials distributors can minimize customer disputes and claims by notifying job site teams in advance about delivery schedules and special handling needs and ensuring customers have the proper equipment (e.g., forklifts, manpower) ready for unloading.

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While cost-efficiency is top of mind for building materials distributors, minimizing claims isn’t just about protecting margins; it’s about delivering materials safely and efficiently while building customer trust. By adopting a digital approach to fleet management and implementing claims reduction best practices across load planning, route selection, training, and communication, distributors can reduce claims costs — both financial and reputational — boost operational efficiency, and strengthen customer relationships.  

Cyndi Brandt is VP Fleet Solutions at Descartes Systems Group.

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