Loss Prevention

Somerset has written about protecting yourself and your livelihood several times.  We have discussed ways to protect against unethical individuals, carriers, and brokers as well as transportation scams.  We have provided ways and procedures to protect against possible loss of revenue due to these issues. Somerset also goes to great lengths to protect company assets.  Along with verifying our partners, we incorporate Contingency Insurance to mitigate risk against catastrophic type events such as high dollar loss, accidents and claims.  After reviewing our policy and the accompanying information included in our combined transit liability program we wanted to highlight a few suggested operational procedures which help us mitigate or assist in effective loss prevention.  Our insurance provider Avalon Risk Management provides these (12) suggestions which can assist in loss prevention.

Loss Prevention - Suggested Operational Procedures.

1.  Data stamp all incoming mail, deliveries, faxes and documentation your office receives to help complete the “paper trail” and show when instructions were received and acted upon.

2.  Coach employees to bring potential and/or actual problems to management’s attention immediately.  Encourage open communication on all levels so employees speak up early and management does not find out later about problems.

3.  Keep properly executed power-of-attorney (POA) on file for all customers. The POA should incorporate your Terms and Conditions of Service.

4.  Utilize current Terms and Conditions of Service at all times on all documents your clients receive (including POA, credit agreement and invoice). If Terms and Conditions exist on the reverse of any of these documents, the front should contain a bold print reference to the terms and liability limitations therein. Additionally, complete the venue clause at the end of the Terms and Conditions and have your clients sign and date the Terms and Conditions at the bottom. Incorporating all of these steps will improve your chances of invoking the liability limitations contained in the Terms and Conditions of Service in your defense.

5.  Make sure you have adequate insurance coverage encompassing all aspects of your business and services you perform. Sample coverage to consider includes: Errors and Omissions, Cargo Insurance, General Liability, Warehouse Legal or Bailee, Workers Compensation and Directors and Officers Liability.

6.  Maintain current certificates of insurance and licensing on all truckers, warehousemen, etc.

7.  Document everything and send follow-up correspondence as often as possible. Employees should take file notes on phone conversations with customers.

8.  Record all important dates in a consistent manner company-wide to ensure important protest or petition dates do not get missed, should someone be out of the office or unavailable. Additionally, identify or flag shipments in advance which could be problematic to help ensure they receive priority treatment.

9.  Agreements between your company and other brokers and forwarders should be in writing. If possible, utilize indemnity or hold harmless agreements with your agents and independent contractors.

10.  Use the Internet to receive up-to-date information on laws, regulations, etc.

11.  Monitor your receivables and conduct proper checks of all companies to whom extend credit. If you are “fronting” duties for clients, ensure you have the expertise before getting into a project.

12.  Do not perform services you are not familiar with or experienced enough to perform. Ensure you have the expertise before getting into a project.

13.  Supply your Terms and Conditions of Service to all parties in the transportation process. 

Understanding these operational checks allows Somerset and our partners to mitigate risk and potential loss of revenue.  If you have questions on these procedures or you want to talk to a Somerset transportation professional please contact Somerset Logistics at www.somersetlogistics.com.  We challenge you to come and be a part of our Team of “Excellent Freight Brokers and Independent Freight Agents.”