Managing Product Rejection: Causes, Resolution and Prevention

Rejected freight is among the most disruptive forces threatening a company’s supply chain. Though occurrences are rare, carrying out a load delivery only for it to be denied by a receiver at the finish line wastes resources and severely damages reputations.

Read on for First Call’s established best practices for lowering your business’ risk of freight rejection — plus steps to resolve a rejected load if the worst should happen.

What Causes Freight Rejection?

Receivers can give any number of reasons for refusing freight, but typical cases of product rejection fall within a few general categories.

Bill of Lading (BOL) errors represent the most common cause for denied freight. The BOL is a legally binding document describing the dimensions, contents and handling requirements for each shipment. Any discrepancy between the BOL and the shipment itself risks excessive accessorial charges or rejection of the entire shipment.

That means even seemingly minor accounting errors — incorrect or missing names and addresses of consignees, inaccurate shipment quantities, mislabeled freight classifications and so on — can cause your logistics personnel massive headaches.

Likewise, delivery of damaged goods due to insufficient packaging, water damage or pallet-shifting can render entire loads of goods useless. Products allowed to shift dangerously in transit are particularly susceptible to rejection, as damaged pallets or shrink wrap puts the receiver at risk of injury from falling freight.

Many perishable shipments also contain temperature-controlled freight, which must be transported within a set temperature range (usually listed on the bill of lading). If the freight is found to have strayed beyond these temperature requirements, the shipment risks spoilage and will be universally rejected to protect consumer safety.

Other common causes for rejected freight include:

• Late or Unscheduled Delivery. Distribution centers have extremely tight schedules — a single late load has the power to set back the entire day’s worth of scheduled deliveries.
• Communication Errors. Miscommunication sometimes results in delivering the wrong type of product — or a delivery that wasn’t ordered at all.
• Unprepared Receivers. Sometimes loads are rejected simply because the receiver has no choice, lacking the space, manpower or equipment needed to process the load.
• Broken Trailer Seal. If the seal on a container is broken or missing at the time of delivery, a receiver has the right to reject the entire load without payment. A broken seal indicates tampering, meaning part of the load could have been stolen or contaminated.
• Evidence of Pests or Animals. Pest management is an important element of the shipping industry. Shipments with evidence of pests or animal infestations are considered contaminated and will be rejected, as they are no longer sanitary.

Resolving Rejected Freight: A Step-By-Step Guide

How you choose to handle instances of denied freight can make the difference between preserving your company’s reputation and losing an account entirely. While the specifics of each case will affect how to move forward with a rejected load, these are First Call’s established best practices for managing freight rejection in an efficient, professional manner:

Step 1: Determine the Receiver’s Reasoning for Product Refusal in Express Detail.

In some cases, a missed delivery appointment can be quickly rectified by contacting the appropriate personnel for a new delivery window. Other shipments may not be so lucky — cases of damaged freight frequently end in a donation or disposal. If the rejection’s cause is not provided, touch base with the receiver immediately to investigate.

Step 2: Request Additional Documentation.

Obtain photo evidence, a copy of the bill of lading and any inspection reports needed to confirm and address the receiver’s issue. In the event of temperature claims, ensure full access to the freight’s temperature monitor logs — these logs (also termed “reefer unit downloads” or “temperature recorder downloads”) record precise temperature measurements in 10-15 minute intervals for the duration of the shipment.

Step 3: Bring all Parties Up to Speed.

Communicate with the carrier (or your logistics provider) immediately, and ensure all parties are on board with your chosen course of action. There are four common ways to manage a rejected load:

• Rework: Correct the issue (usually via restacking or repackaging) so the load meets the receiver’s stated acceptance criteria.
• Reschedule Delivery Appointment: Determine when the receiver will next be available to unload the shipment.
• Donation: Avoid unnecessary waste by giving goods to a nonprofit or charitable organization in need.
• Disposal: If all else fails, recycle, incinerate, or landfill goods that can’t be reworked, rescheduled, or donated to a cause.

Remember — the longer you wait to take action to fix a wrinkle in your current system, the more you risk future rejections.

Step 4: Maintain an open line of communication with a designated contact.

Access to an emergency contact is critical to mitigating financial losses and wasted resources. Ensure you have this contact’s preferred method of communication on file and easily accessible.

Step 5: If the issue persists, consider a new shipping partner.

If certain carriers or logistics providers cause regular disruptions to your delivery schedule, it may be time to explore alternatives. In these rare cases, the financial losses and risk to your brand’s reputation is likely to exceed any potential advantages of working with a familiar carrier.

Preventative Measures: How to Avoid Freight Rejection

Implementing precautionary measures throughout your logistics processes before an incident occurs can drastically reduce the risk of load rejection. Here are ten proactive steps every business can take to ensure more successful deliveries:

1. Implement robust quality control. Adding additional quality control checkpoints will help reduce the number of errors in the future and allow you to catch problems with shipments before they ever get to the receiver’s dock.
2. Evaluate shipping and packaging processes for weak points. Packaging should check four major boxes: appeal to customers, facilitate easy storage, protect the product from contamination and be “transport-friendly.” Packaging designed with these four criteria in mind is much less likely to be damaged and rejected by receivers.
3. Label Clearly and Consistently. Easy-to-read labels in a consistent location on each package go a long way toward preventing shipping mistakes. Instituting double and triple-check procedures to ensure an accurate bill of lading and other documentation can also reduce the risk of rejection.
4. Comply with Regulations. Make sure that everyone understands the regulations that apply to the specific type of product you are shipping and then maintain accurate records as proof of compliance.
5. Communicate Early and Often. Always strive for a consistent, healthy working relationship with the key contacts throughout your supply chain — don’t wait for an emergency to introduce yourself to the person responsible for straightening your shipments out.
6. Partner with Reliable Suppliers and Carriers. Don’t settle for just anyone — consider the pricing, certification and experience of all potential partners, and be sure to ask around for any to gauge others’ experiences working with specific partners. Reliable suppliers and carriers will be equally dedicated to meeting shipping requirements and making deliveries on time.
7. Provide Training and Education. Well-trained personnel are less prone to making mistakes that could lead to product rejection. Make sure your staff knows what your product rejection response plan is and their role in it. Should a rejection occur, take advantage of the situation and use it as a training tool to teach staff how similar issues can be avoided.
8. Invest in Real-Time Tracking. Establishing full supply chain visibility via real-time tracking software can identify weak points in your current process. Real-time monitoring also makes it possible to catch and troubleshoot problems with shipments as they occur, rather than finding out upon delivery.
9. Perform Pre-Shipment Inspections. Inspecting products before they ship takes extra time, but it also provides one last opportunity to catch problems like damaged or leaky products before they’re stacked onto pallets and shipped out. It also provides your carrier with an opportunity to inspect the load themselves, which can increase their confidence in safely hauling the product. This is also a great time to double-check your paperwork is accurate, and that the quantity of goods matches what’s on the bill of lading.
10. Monitor Performance and Customer Feedback. Customer feedback can help you spot room for improvement and assess any previous damage caused by product rejection, while performance metrics can highlight what’s working — and which processes may need further adjustments to minimize chances of rejected freight.

Implementing product rejection safeguards throughout your current operation can feel like a tall order — which is precisely what our team is here for. First Call’s logistics experts are professional problem-solvers, helping everyday partners streamline processes to achieve greater efficiency and remove the threat of rejected freight.

Contact us today and let’s chat about how we can help your business thrive!