One of the replies above said we should try to control damages at the source. I pickup at a MBE store and I had a pkg last week which just did not sound right when I picked it up, so I opened it and there were 6 birthday presents, all wrapped, sitting in the box. No packing material/peanuts/newspaper--nothing. Just 6 presents sitting in a box. I tactfully told them that I could not take the pkg but would be more than happy to pick it up the following day after they have had a chance to repack it. Actually, there are 2 of us who P/U at this MBE and the other driver will simply take whatever they put out there, load it in his pkg car, and is off to the next stop so it makes it that much harder on me when I give each pkg a quick once-over and refuse to P/U bad packs.
I also had a shipper try to send out a pkg using a box with hazmat markings that had been crossed out with a magic marker. When I told him that I couldn't accept the pkg due to the markings, his reply was "that's the same box they delivered it in". Again, tactfully told him I would be more than happy to pick it up the following day after he had a chance to repack it in a new box.
Finally, had another shipper who tried to send out a high value ($1,750) that had absolutely no packing material whatsoever. I think you know what my response was and where the pkg remained.
We are the first line of defense and while it is not easy and you will catch some grief it is to our benefit to do all that we can to keep these potential service failures out of the system.