$45M UPS Settlement: Freight Valuation

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Post on Nov 27, 2024

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$45M UPS Settlement: Freight Valuation – Lessons Learned the Hard Way

Okay, friends, let's talk about something that's super important, especially if you're shipping anything of value: freight valuation. I learned this lesson the hard way, and it cost me (and my client) a whole lot of money.

I'm talking about the recent $45 million settlement with UPS over their freight valuation practices. Seriously, FORTY-FIVE MILLION DOLLARS! That’s a huge number, and it highlights a critical issue many businesses overlook. This isn't some tiny, insignificant detail; it's a potential minefield for shippers.

My Epic Fail (and How You Can Avoid It)

A few years back, I was working with a client who manufactured these amazing handcrafted furniture pieces. Think bespoke, high-end stuff – we’re talking thousands of dollars per piece. We shipped a whole container-load using UPS, and we totally screwed up the valuation. We used the cheapest option, basically assuming UPS would cover everything. Spoiler alert: they didn't.

During transit, there was some damage. Not catastrophic, but enough to significantly reduce the value of several pieces. When we filed a claim, UPS pointed to the incredibly low declared value and said, "Sorry, that's all we're covering". We were devastated. It was a nightmare. The client was furious, and I felt like a complete idiot. It cost me a lot in terms of reputation and stress. The financial loss for the client was equally painful. Lesson learned? Never underestimate the importance of accurate freight valuation.

The Details Matter: Declared Value vs. Actual Value

This whole UPS settlement hinges on this very issue. Many shippers get confused about declared value. It's not just about the cost of shipping— it’s about the actual value of the goods. This includes the cost of materials, labor, and any other expenses associated with producing the item.

If you only declare a low value, and something goes wrong during shipment, you are severely limiting your potential compensation. Think of it like insurance. You pay a bit more for better coverage, but the payoff is huge if disaster strikes.

UPS, and other carriers, typically offer different coverage levels. Understanding the difference between declared value and insurance is super important. You'll find that their declared value is often not enough for high value items. You might need additional insurance options from your carrier, or even a third party.

Protecting Yourself: Proactive Steps for Shippers

After my client's situation, I changed my processes completely. Here’s what I do now:

1. Always get a detailed appraisal: For high-value goods, get a professional appraisal. This document provides irrefutable proof of value.
2. Accurate Documentation: Keep meticulous records of every step in the shipping process. Detailed invoices, photos of the goods before shipping, and proof of insurance are your best friends.
3. Choose the Right Coverage: Don't just go with the cheapest option. Carefully review your carrier's coverage options and select the one that offers sufficient protection for the value of your goods. Sometimes, third-party insurance is more robust.
4. Check the Fine Print: Carriers have specific terms and conditions. Review these carefully before shipping anything valuable. Don't just skim it; read it thoroughly.

The $45 million UPS settlement serves as a harsh reminder: Accurate freight valuation is not optional; it's essential. Don't make the same mistake I did. Learn from my experience and protect your business from potential losses. You'll thank yourself later. Trust me on this one!