You are a Food Distributor Warehouse Manager, you want to know how to avoid retail chargebacks? | LoadProof

 

Your Business

• You distribute food products, which could fall under Dry, Produce or Frozen categories
• You distribute alcohol products
• You distribute pharma products
• While doing this you often run into OSD issues, Overage, Shortages and Damages
  1. Overages – You shipped more than ordered, which could result in non-compliance chargeback
  2. Shortages – You shipped less than what was ordered, which could result in non-compliance chargeback
  3. Damages – Your products arrived damaged, which would result in a rejected load or a damage claim
• While shipping food products it is also very important to clean the trailers thoroughly in order to comply with FDA requirements, I had a customer once they would write lines and lines of cleanliness description in the system after washing their trailers thoroughly, so just in case something happens, they can go back to their customer and show them how well they have been cleaning the trailers
• Another challenge while shipping produce or frozen items is that, you will have to hand off product at the right temperature or else the product could perish, so it Is important to show a picture of the temperature gauge and the temperature during hand off.
• Also keep in mind that Food distribution is one of the challenging business to run because the margins are thin. That is why often food distribution centers use sophisticated systems such as Voice, Labor Management Systems, even Robotic systems to keep the cost as low as possible.
• You could also ship to retailers
• As a warehouse manager, you are responsible for the following
  • The manager leads and coordinates all aspects of the distribution process within the Supply Chain network.
    Leads site’s planning, execution, and communication of all daily clerical and operational processes, including:
    • Labor Planning & Driver Management
    • OSHA, FDA and DOT Compliance
    • General Administrative Duties
      1. Employee hiring
      2. Payroll
    • Customer Service Responsibilities
    • Human Resource Administration
    • Product Functionality Checks and Cleaning
    • Warehouse Functions/ Servant Leadership
    • Load Planning, Routing, and Carrier Management
    • Collection/Reporting of KPI data
    • Sometimes you are responsible for the P&L of the site as well
  • You could specialize in many products some of them are
    1. Handling Food grade products – FMCG
    2. FDA DEA Regulated
    3. Just keep in mind – if you are handling products that require FDA approval – you have to maintain all the documentation for up to 12 years, it could be anywhere upto 3 or 7 or 12 years. We have a customer, these guys ship health related products, every return they get, they need to maintain that returns documentation for 12 years, they have this large warehouse that has only papers – all the returns documentation from the returns they received.

Your Supply Chain Community

Your Supply Chain community comprises of people that you do business with, usually it is made of all these people

• Manufacturers that manufacture products
• Carriers
  1. Trucking companies
  2. Ocean Carriers
  3. Rail Carriers
  4. Air Carriers
  5. Multi modal – Ocean, Land, Rail, Air
• Third Party Logistics Service Providers
• Vendors that you buy your products from
• Cross Dock Facility operators
• Consolidation Facility operators
• LTL Terminals
• Parcel Carriers
• Delivery Companies
• Freight Forwarders
• Freight Brokers

It is very important to keep in mind that you will work with all these people on a regular basis, so build and maintain professional relationships. While shipping products, moving products mistakes do happen, sometimes it is theirs, sometimes it is yours, whatever it is work with your partners, keep proof in LoadProof to demonstrate that you did your job right. So, you can have a professional conversation and articulate your position in a professional way, it is okay to say in a very professional and gentle manner, “Hey it is not fair for us to pay for mistakes that is not ours, here is a proof in the form of pictures”. However, do not burn bridges everybody is working very hard to make it for themselves. Also, people move on and change roles very quickly in this industry, so the same person could take up a different role and you might face them in a completely different side. So always build and maintain professional relationships, do not burn bridges. So, when you are working with such a community of Supply Chain service providers, having LoadProof and pictures to prove that you did your job right, gives you a solid ground to stand on, when something happens to your shipment.

Your Challenge

1. You are losing money on Retail chargebacks when you ship to Retailers
2. You are losing dollars due to freight claims
3. You are losing money on damages – your customers are submitting damage claims to you
4. You are losing money on rejected loads
5. You want to keep that money in your customer’s pockets
6. So, you started taking photos in your official Digital camera
7. Some of your people started taking photos in their personal cell phones but the process had the following drawbacks
   • Take photos in a device, either a digital camera or a smart phone
   • Then you have to save the photos somewhere in a Google drive or Shared drive or Shared Folder
   • Then manually have to search the photos to find the right ones when there are any questions
   • Cumbersome to copy the photos from the camera
   • Time consuming to organize photos for future reference
   • No back up for the photos – What if your computer suddenly crashed?
   • No visibility across the Supply Chain – Other operators in the Supply Chain cannot see the pictures – your vendors, customers, carriers, lumpers, personnel at the cross-dock facility, insurance companies cannot see them

What is a Retail Chargeback?

1. You are shipping to a retailer
2. The retailer is either issuing a chargeback or automatically detecting your invoice because they are citing noncompliance or damages
3. If you have a genuine noncompliance issue based on the retailer’s routing guide, then you have to make sure that noncompliance issue is fixed first. If you are still getting chargebacks and the reasons that you are getting from the retailer doesn’t make sense, then you have to have a conversation with the retailer.
4. So, you want to have a conversation with the retailer. It is not always easy because they are so big, you cannot get their attention easily, so you start with the pictures of the product you ship. Using Loadproof start taking pictures of the products you ship that demonstrate the condition of the product you are shipping.
5. When you get a chargeback, you can share those pictures and demonstrate to them saying that the condition was perfectly fine, when the product left your facility
6. Typically, you will have to submit the pictures through their portal. And with Loadproof you can do that very easily because with all the pictures you have taken, you can generate only one (not too many that complicates the process and requires a lot of labor to be spent just to upload pictures) PDF document and upload that one PDF document into the retailer portal and start the conversation.
7. Often there are two scenarios at play here. The first scenario is the Retailer paying for transportation, which is what happens most often, and the second scenario is you paid for transportation.
8. Scenario 1 – The retailer often pays for transportation because they can take advantage of their economies of scale and get a better deal from the transportation company or carrier. The problem is because you don’t have a contract with the carrier you cannot directly file a claim with the carrier. So, you will have to talk to the retailer and prove it to them that it is not your mistake. Sometimes even the insurance companies are involved because the carrier might insure the move, then insurance companies will ask for the pictures, so if you have LoadProof, it is even easier to provide the pictures to the insurance companies. It is not always easy to get the retailer to look into this right away, but work with them, keep pushing back, you might not succeed in the first attempt, but eventually you will succeed.

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