Expedited shipping charges and potential penalties for missed deadlines are some of the direct costs that a company may incur due to a conveyor breakdown. These costs can arise when an organisation cannot fulfil orders on time due to a delay in production caused by a conveyor system failure.
When a company cannot meet the agreed-upon delivery date, it may need to expedite shipping to meet the deadline, which can be more expensive than regular shipping. The cost of express shipping can vary based on the distance, weight and urgency of the shipment. In some cases, the cost of expedited shipping can be significantly higher than the regular shipping cost, resulting in additional expenses for the company.
The business may also face penalties for missed deadlines. These fines can vary based on the agreement terms between the company and the customer. For example, the customer may require compensation for the delay, or the supplier may pay a penalty fee each day the shipment is late.
Additionally, if the delay damaged the customer - who may have had to interrupt his production line, for instance - the supplier may be required to pay for these losses. This is the case, for example, of a pharmaceutical company that did not receive the necessary inputs to produce a particular medicine. The damage can be incalculable and even cause an endless and costly court battle.
