AIAG volunteer and leader of the Finished Vehicle Logistics Damage Claims committee, Sean Grant, who works as Ford’s supervisor of vehicle shipping quality and claims, shares his perspective on the work group’s key initiatives and industry challenges with Finished Vehicle Quality.

To expedite the claims handling process, a set of standards and guidelines was developed to provide the necessary information for inspecting, recording, and transmitting vehicle damages. The AIAG M-22 Document (FVL Transportation Damage Handling Standards and Guidelines) consists of several documents and guidelines, all written by the Damage Claims Committee and adopted by the industry.

As committee chair, Grant leads the continued focus on process improvements for reporting and handling vehicle damage as vehicles are transported from plant to dealer delivery.

AIAG: What is your background with Ford?

Grant: I spent 11 years at Norfolk Assembly Plant in Virginia: 2 years as a Production Supervisor, 5 as a Material Handling Supervisor, and 4 as the Synchronized Material Flow Coordinator.

After the Norfolk Plant closing was announced in 2006, I moved with Ford to metro Detroit as a Material Handling Supervisor at the Flat Rock Assembly Plant (18 months). I have spent the last 12 years in Ford’s North American Vehicle Logistics department: 7 years in facilities, contracts, and load testing and 5 years as Supervisor of vehicle shipping Quality and Claims.

AIAG: What is the purpose of the Damage Claims Committee?

Grant: To share lessons learned between all industry stakeholders — including manufacturers, haul-away carriers, railroads, inspection companies, 3PLs, etc. — which will lead to agreement on changes and standardization to enable damage prevention, root cause determination, and more timely and accurate claims adjudication.

AIAG: What is the key initiative of the Damage Claims Committee this year?

Grant: Standardizing the on-rail inspection reporting process to ensure that the same critical data points are captured by the many different companies performing on-rail inspections. These reports are key in determining root cause of damage and in assigning liability. 

AIAG: What challenges do the OEMs face related to vehicle damage?

Grant: Vehicle damage is very costly to all OEMs and their partners. There were roughly 17.2 million vehicles sold in the United State in 2018. About 1 percent of those vehicles were damaged during transportation, which equates to ~172,000 damaged vehicles in a year. At an average per unit repair cost of around $1,000, the industry spends ~$172 million annually on transportation damage — in just the United States alone. The actual costs for the OEMs and their partners are greater than $172 million, as that number does not include inventory carrying costs, lost sales due to vehicles arriving late to the dealers, customer dissatisfaction, claims processing, etc.

Transportation damage is pure waste, and it will take an extraordinary team effort from all stakeholders to move the needle down from the industry average 1 percent damage rate.

AIAG: What specific steps can the industry take to address transportation damage?

Grant: The transportation inspection process needs to take a leap forward by:

• Filing claims 100 percent electronically, taking pictures of all exceptions (damage) found (including at the dealers), exceptions (damages) charted to the grid level (vs. area), and results by vin submitted via EDI to all partners in the supply chain.
  
  
• OEM claims processors using the appropriate data and pictures to properly adjudicate the liability.
  
  
• Converting the massive amount of inspection data into analytics.
  
  
• Identifying the what, where, and when of all exceptions, in aggregate in the industry, by OEM, by model, by carrier, by ramp, etc.
  
  
• Identifying the specific areas that continue to be damaged during transportation — and then focus damage prevention efforts on these areas.
  
  
• Identify repetitive manufacturing damage that is being incorrectly repaired as transportation damage (feed that information back to the plants for root cause analysis)

AIAG: Has creation of the AIAG M-22 document proven beneficial in handling vehicle damage claims?

Grant: Yes, the AIAG M-22 document provides standardization and clarity on a number of transportation industry processes.The AIAG Transportation Damage Coding System becoming an official global document was an absolute must and an important step forward. I recommend that everyone in the vehicle shipping transportation damage business read the M-22 cover to cover at least once per year to re-familiarize themselves and to identify areas where changes have been, and need to be, made.

AIAG: Any other comments you would like to add?

Grant: I appreciate the AIAG team in bringing together automotive industry stakeholders in the spirit of collaborative continuous improvement. AIAG enables the automotive industry to work together on non-proprietary issues like transportation damage prevention, which helps everyone, most notably the final customer.