If you’ve ever spent hours digging through paperwork, replaying security footage, or chasing down who’s responsible for a damaged shipment—you’re not alone. OS&D claims (Over, Short & Damaged) are one of the most frustrating parts of warehouse operations. They’re messy. They’re manual. And they always seem to show up at the worst time—right when your team is already buried in end-of-day dispatches or month-end audits.
But the impact goes deeper than just inconvenience. Every unresolved claim means potential revenue loss, customer dissatisfaction, and internal finger-pointing. And when hundreds of shipments move through your warehouse daily, even a small margin of error adds up—fast.
One cannot deny that the potential savings are substantial. A McKinsey & Company research from 700+ warehousing studies shows that:
- $38 billion could be saved through lean working practices
- $20 billion or more could be cut through automation technologies
For logistics companies aiming to cut losses, optimize operations, and maintain a competitive edge, AI-driven quality control has shifted from a luxury to a must-have.
The good news? AI is starting to do what humans can’t—spot damage in real time, auto-validate claims, and even prevent some of them from happening at all. In this blog, we’ll unpack:
- Why OS&D claims are so hard to manage manually
- Where traditional systems fall short
- How AI is quietly transforming this broken claims process
- And how your warehouse can benefit—without ripping and replacing everything
Let’s get into it.
Understanding OS&D Claims
Before we dive into how AI helps, it’s worth grounding ourselves in what OS&D claims really are—and why they matter so much to warehouse teams.
Over, Short, and Damaged (OS&D) refers to any discrepancy in a shipment once it arrives:
- Something extra (Over)
- Something missing (Short)
- Or something that clearly took a beating in transit (Damaged)
While these claims are a common part of logistics, they’re often treated like a tedious side task—when in reality, they have major operational and financial consequences. If you don’t process them quickly and accurately, you risk:
- Tying up working capital
- Delaying customer reimbursements
- Damaging carrier relationships
- And spending time on internal escalations that should’ve been preventable
Let’s break down where most OS&D issues begin.
Shipping Errors
Labeling mistakes. Incorrect item counts. Picking the wrong product variant. These things happen—but without clear documentation and tracking, your team ends up in the dark about when (and where) it went wrong.
Damaged Goods
This one’s the most visible—and the most emotionally charged. Whether it’s broken pallets, crushed boxes, or leaking containers, physical damage is usually discovered after it’s too late to intervene. And without visual proof? The blame game begins.
Incomplete Deliveries
Sometimes items just vanish—due to theft, mis-scanning, or poor handoffs. What’s worse? The receiver often discovers the issue before you do, making you look unprepared and unprofessional.
Common Challenges in OS&D Claims Processing
Now that we’ve covered what OS&D claims are, let’s talk about why they’re such a pain to manage. If you’ve ever tried resolving one without the right systems in place, you’ve probably faced a few of these hurdles. The traditional process is slow, reactive, and often full of guesswork.
Manual Paperwork Slows Everything Down
In most warehouses, OS&D claims still rely on handwritten notes, printed checklists, and scattered spreadsheets. Every step—recording the incident, validating it, forwarding it to carriers—takes longer than it should. And the more time it takes, the higher the risk of errors, missed deadlines, or misplaced records.
Human Errors in Claim Validation
Even the most experienced team members can misjudge damage severity or miss a short shipment if it’s not clearly documented. These mistakes can lead to rejected claims, customer frustration, or worse—compensating for issues your team wasn’t even responsible for.
Lack of Real-Time Data
By the time someone notices a damaged package or missing pallet, it’s often too late to pinpoint what happened. Without time-stamped visual evidence or real-time alerts, the investigation becomes a guessing game. And that slows down everything from resolution to reimbursement.
High Processing Costs
Let’s not forget the cost of all this manual effort. From having supervisors rewatch hours of footage to dedicating staff for back-and-forth with carriers, OS&D claims can become a black hole for labor hours and operational budgets.
Fraudulent Claims Slip Through the Cracks
Without reliable verification, some claims get approved without real proof. And while no one wants to assume bad intent, the lack of consistent evidence makes it harder to separate genuine issues from opportunistic ones.
How AI is Transforming OS&D Claims Processing
Here’s where things start to shift. AI is taking what used to be a messy, paper-heavy process and turning it into something faster, smarter, and far more accurate. With the right tools—like Arvist Vision AI—you can go from chasing claims to preventing them altogether.
Automated Data Collection
Instead of relying on manual entry, AI can automatically log shipment data from your existing warehouse systems and cameras. That means no more missing checklists or illegible notes—just clean, structured data that’s instantly accessible.
Image Recognition & Damage Assessment
This is where Arvist shines. Our Vision AI taps into your existing security cameras to detect visible damage in real time. Think crushed pallets, torn packaging, or missing boxes. The system flags the issue, records the footage, and links it directly to the shipment record—saving hours of post-incident detective work.
Machine Learning for Claim Validation
AI models can analyze historical data and detect patterns—helping you validate whether a claim is legitimate based on past trends. That means smarter approvals, faster responses, and fewer disputes with carriers.
Chatbots & Virtual Assistants
No more endless email threads. AI-powered assistants can guide warehouse staff or customers through the claims process—asking the right questions, collecting evidence, and even generating reports on the fly.
Predictive Analytics
Beyond just reacting to claims, AI can actually help you spot red flags before something goes wrong. For example, if a certain loading dock has a high frequency of damage, the system can alert you to review that process before it causes another issue.
Benefits of AI in OS&D Claims Processing
With the old way of handling OS&D claims, every step felt like damage control—slow, reactive, and riddled with inefficiencies. But once AI steps in, it’s not just about speeding things up; it’s about transforming how warehouse teams work, think, and respond.
Faster Claim Resolution and Improved Efficiency
When AI automates data capture and instantly flags issues through your existing cameras, it eliminates the back-and-forth. Claims that used to take days to validate can now be resolved in hours—with full visual documentation to back them up.
Reduced Manual Work and Operational Costs
AI doesn’t just reduce errors—it reduces effort. Instead of having supervisors chase paper trails and rewatch camera footage, they get a clear summary of incidents as they happen. Fewer hours spent chasing details means more time spent optimizing operations.
Increased Accuracy in Claims Assessment
With Vision AI, your warehouse gains eyes that never blink. It spots missing items, packaging damage, and incorrect shipments in real time. That kind of precision ensures claims are based on facts, not assumptions—reducing disputes and building trust with customers and carriers alike.
Better Customer Experience and Trust
When customers receive timely updates, quicker resolutions, and fewer damaged goods, their confidence in your operations grows. AI helps you respond proactively rather than defensively—turning a frustrating claims process into a trust-building opportunity.
Enhanced Fraud Detection and Risk Mitigation
AI keeps a timestamped digital trail of every shipment. That makes it harder for fraudulent claims to slip through and easier for your team to defend legitimate ones. With stronger verification, you can reduce losses and avoid paying out for damage you didn’t cause.
Signing Off
For warehouse operators, OS&D claims have long been a necessary evil—slow to resolve, difficult to verify, and costly in every sense. But with AI, it doesn’t have to be that way anymore.
By turning your existing security cameras into real-time data collectors and damage inspectors, AI brings transparency and speed to a process that’s historically been slow and reactive.
Solutions like Arvist Vision AI don’t just digitize claims—they elevate your entire operation. From the moment a shipment arrives to the second a claim is filed (if it even needs to be), you have proof, insight, and clarity. The result? Fewer disputes, faster resolutions, and more time for your team to focus on moving goods—not chasing paperwork.
If OS&D claims are eating into your margins or draining your team’s time, now’s the time to explore AI-driven solutions built for warehouse realities.
Get a free AI audit and see how Arvist can start delivering results from day one.
Frequently Asked Questions
How can AI be used in OS&D claims processing?
AI leverages computer vision and machine learning to monitor incoming and outgoing shipments, automatically detect damage, and collect time-stamped visual evidence. It streamlines documentation and supports faster, more accurate claims processing.
Can AI help prevent OS&D claims before they happen?
Absolutely. By identifying patterns—like frequent damage zones or recurring packaging issues—AI helps warehouses adjust layouts, train staff, or rework loading practices to prevent damage before it occurs.
How does AI improve accuracy in OS&D claims assessment?
AI doesn’t rely on memory or manual documentation. It uses real-time video feeds and image recognition to capture objective proof of damage, count discrepancies, or delivery errors—eliminating guesswork and reducing disputes.
Is AI difficult to integrate into existing claims systems?
Not at all. Arvist, for instance, works with your existing security cameras and integrates with warehouse management systems (WMS) or ERPs. No new hardware or complex training required.
What are the cost benefits of using AI for OS&D claims processing?
AI reduces operational costs by eliminating manual inspections, speeding up claims resolution, and minimizing fraudulent or incorrect payouts. It also saves revenue by reducing product damage and improving customer retention through faster issue handling.
