OS&D, meaning Over, Short, and Damaged, is a type of claim filed in response to shipping mishaps—specifically deliveries of incorrect quantities of goods and/or damaged goods.
This article will explore causes and real-world examples of Overages, Shortages, and Damages as well as provide strategies to prevent and better manage OS&D.
The Basics of OS&D
The U.S. Department of Transportation defines OS&D protocol as:
“Over, short and damaged. Report is issued at warehouse when goods are damaged, claim is usually filed with the carrier.”
To put it another way, an OS&D claim is filed when either the wrong amount of goods is delivered or the goods are delivered in a damaged state.
To break it down even further, here’s an examination of each of the facets of OS&D:
- Overages – The quantity of goods received exceeds the quantity recorded in the shipping documentation. In other words, the recipient receives more goods than expected.
- Shortages – The quantity of goods received falls below the quantity listed in the shipping documentation. In other words, the recipient receives fewer goods than expected.
- Damages – The goods received are damaged and/or in worse condition than expected according to the shipping documentation.
To illustrate each of these scenarios with a simple example, assume you are ordering 25 boxes of eggs. If you receive 30 boxes of eggs, that’s an overage. If you receive 20 boxes of eggs, that’s a shortage. And if some of your boxes arrive in poor condition or the eggs inside are broken, those are damages.
The Significance of OS&D
Addressing OS&D in the shipping industry is crucial, and not just because of the inconvenience of discrepancies in quantities or conditions of goods delivered. Frequent OS&D claims can have financial, operational, and reputational consequences for your business.
Financially, filing OS&D claims is expensive. Not only can frequent OS&D claims drive up a business’s costs, but OS&D claims are not always reimbursable. Operationally, OS&D claims can cause delays and take valuable time to investigate. Reputationally, excessive OS&D claims can harm relationships with shipping carriers and customers and make you an undesirable business partner.
Therefore, avoiding prolific OS&D claims is imperative. An industry research study by Michael A. McGinnis found that reliability ranked higher than freight rates in 10 out of 11 studies on freight transportation choices. OS&D ranked more important than freight rates in 3 out of 8 studies, showing the increased importance of over, short, and damaged goods to consumers making shipping choices.
Identifying Overages
Overages occur when the amount of goods delivered is greater than the amount of goods expected or otherwise listed on the shipping documentation. Overages can result from any of the following common factors or scenarios:
- Errors in packing – Overages from errors in packing occur when too many goods are packed into the shipment on the sender’s end. This can happen for any number of reasons, including tired staff, inferior warehouse layout, or subpar inventory management.
- Data entry mistakes – An incorrect data entry can cause a chain reaction of mistakes and/or confusion when shipping, including overages. Data entry mistakes can include inaccurate inputs, unit inconsistencies, and incorrect formatting.
- Incorrect shipment documentation – If the incorrect quantity is listed on the shipping documentation, even if the correct quantity is shipped, this can lead to confusion and a technical overage when the goods are received.
Imagine a truck driver is dropping off a shipment of milk cartons at a grocery store. The shipment includes one extra pallet of milk cartons that the store did not order, so the store refuses the extra pallet.
The pallet must sit on the truck while the driver contacts the vendor and awaits instructions for the extra goods. In that time, the goods may spoil, or the driver may miss their next pick-up. These scenarios can damage a business’s reputation and customer satisfaction. Therefore it is critical to ensure correct quantities are shipped to avoid overages.
Unpacking Shortages
Shortages occur when fewer goods are delivered than the expected amount according to the shipping documentation. Shortages are frustrating for the customer and can be caused by any of the following common factors or incidents:
- Theft – A 2019 article in Transport Topics reported on an increase of “cargo thieves” targeting food and beverages, electronics, and non-consumable household goods shipments in areas like Los Angeles, Dallas, and Miami. These thefts include “fictitious pickups” where thieves pose as truck drivers to pick up goods at facilities. Experiencing a shortage due to theft is an unfavorable experience for all parties involved.
- Transportation mishaps – Transportation mishaps can occur for many reasons. One example is when a truck is holding two separate cargos, and accidentally delivers a portion of the wrong cargo to the first recipient—leaving the second recipient with a shortage.
- Mislabeling – Mislabeling paperwork, orders, or shipping documentation can have any number of adverse effects from the wrong goods traveling to the wrong customer, or the incorrect amount of goods being sent to the recipient. The aftermath of both of these scenarios could likely be a shortage.
For a real-world illustration of a shortage, imagine an electronics retailer is expecting 50 products in a shipment. In the delivery, they counted only 40 products, leaving them with a shortage. This can put the retailer in a difficult position, especially if those 50 products were pre-orders or otherwise expected by consumers to be available in a timely fashion.
Dealing with Damaged Goods
Goods can be damaged in transit in a variety of ways. Each of the following examples of damaged goods would necessitate filing an OS&D freight claim:
- Rough handling – If handled improperly, even carefully packaged goods can suffer harm in transit. This is even more of a risk if packages are improperly labeled, such as missing the necessary ‘Fragile’ or ‘This Side Up’ signage.
- Accidents during transportation – While accidents may be rare, some are unavoidable. These can include automobile collisions or goods that are accidentally mishandled in the loading or unloading process.
- Environmental factors – Some natural disasters or physical anomalies that obstruct the carrier cannot be prevented or predicted. These can include storms or wildlife collisions.
It’s important to also distinguish damaged goods as a visibly damaged claim and a concealed damage claim. Let’s say a store has ordered a shipment of apples and one of the crates shifted in transit, breaking and tipping over. Since this damage is visible on the exterior of the container upon delivery, it’s considered grounds for a visibly damaged claim.
If the crate looks undamaged upon delivery, but upon opening the crate it’s discovered that all of the apples are rotten, this is grounds for a concealed damage claim. Concealed damage is damage to the cargo that isn’t immediately apparent until after the bill of lading has been signed. It’s typically more difficult to prove and receive compensation for concealed damage claims.
OS&D Reporting and Documentation
Properly documenting overages, shortages, and damages is critical, as is reporting them promptly. Here are some strategies to keep in mind when you face an OS&D scenario to give you the best chance to receive compensation and recover from the situation.
- Carefully scrutinize the condition of the freight immediately upon arrival.
- Do not sign the bill of lading until after you’ve thoroughly inspected the freight.
- Record any damages or quantity discrepancies on the bill of lading.
- Take pictures of the condition of the cargo if it arrives damaged.
- Store the cargo in a protected area until the claim is approved.
Clear, detailed reporting is the best measure to take for resolving freight discrepancies when they happen. But what’s the best method to prevent OS&D claims before they happen?
OS&D Prevention Strategies
Organizations can optimize their procedures in the following categories to effectively prevent troublesome OS&D claims and save money, time, and reputation.
- Effective Inventory Management: Keeping up-to-date visibility and control over your inventory during shipping operations is crucial for preventing mistakes.
- Robust Packaging Procedures: Proper packaging can prevent goods from arriving damaged. Consider all of the following when evaluating packaging procedures: sufficient cushioning, correct box sizes, sufficient seal strength, and proper labels.
- Technology Integration: Modernizing your logistics system comes with a host of benefits, from increasing your efficiency to cutting costs to decreasing your risk of filing OS&D reports.
Not sure where to start when looking to incorporate tech into streamlining shipping operations and increasing your profit? Lojistic offers a myriad of functions to help further optimize your shipping costs.
The Role of Technology in OS&D Management
Increase your shipping effectiveness and save your organization’s money, time, and reputation by integrating advanced shipping analytics technology to reap the following benefits:
- Real-time tracking and monitoring – Instantly track every shipment, spot errors, and obtain refunds where applicable more quickly with a comprehensive parcel audit.
- Automated data collection – Using technology to collect OS&D data allows businesses to more quickly assess and solve OS&D issues and costs.
- Inventory management software – Inventory management software can trigger alerts when OS&D issues arise, keep records of incidents, and track progress in real time.
- Predictive analytics – Predictive analytics, rooted in statistical analysis, empowers businesses to foresee and address common OS&D issues before they arise. However, it's important to note that predicting rare, one-of-a-kind events, such as Harvey's forklift adventure with your refrigerator, falls outside its typical scope.
- Quality control and inspection tools – With thorough quality inspection methods in place, you can ensure goods are packaged effectively and correctly to avoid OS&D concerns in shipment.
- Documentation and reporting – Detailed documentation and shipping reporting are essential for preventing and solving OS&D claims, which can be found in many inventory management platforms.
- Communication and collaboration platforms – To keep track of each moving piece in your logistics chain, install a reliable communication platform to stay in touch with delivery personnel and logistics managers.
- Customer engagement – When OS&D issues arise and a customer is involved, it’s imperative to have a sound customer engagement strategy and tools in place to keep them informed along the way.
Say Goodbye to OS&D Concerns with Lojistic
To solve OS&D issues before they start, advance your shipping technology with Lojistic. Creating a Lojistic account is free and easy—in minutes you can access unlimited data and better manage and reduce your shipping costs. Use Lojistic’s platform, including parcel audit, parcel payment, and parcel refunds, to operate smarter, and enjoy the difference an integration of smart technology can make.
Sources:
U.S. Department of Transportation Federal Highway Administration. Freight Glossary and Acronyms. https://ops.fhwa.dot.gov/freight/fpd/glossary/index.htm
Air Force Institute of Technology. Model Selection Analysis of Depot Level Reparable Asset
Retrograde Shipments within the Continental United States. https://scholar.afit.edu/cgi/viewcontent.cgi?article=5275&context=etd
Transport Topics. Electronics, Food and Beverages Targeted by Cargo Thieves in Q3. https://www.ttnews.com/articles/electronics-food-and-beverages-targeted-cargo-thieves-q3
Author
Matt Bohn
Matt Bohn
Director of Parcel Rate Services
Prior to his role at Lojistic, Matt held significant positions in the industry, including his tenure as Senior Pricing Advisor at FedEx. Matt analyzed pricing programs and wrote pricing contracts for some of FedEx’s largest e-commerce and retail shippers. He also managed projects for the FedEx Global Pricing Approval Systems and Strategic Account Executive Inputs.
Matt earned a BS in Computer Engineering and an MBA in Finance from the Joseph M. Katz School of Business at the University of Pittsburgh.