Properly Checking Your Incoming Freight

Properly Checking Your Incoming Freight

by Don Buckey

When we talk about "checking" freight, we are talking about the process of inspecting the outward condition of the packaging at your receiving dock, signing the carrier's delivery receipt, and finally, matching the freight against the packing slip when internally receiving the goods.

It will be well worth the time it takes to verify the vendor and carrier piece-count, inspect the outward condition of the packaging, and make detailed and meaningful notations on the carrier's delivery receipt (D/R). When you have cartons on pallets, or a combination of loose pieces and pallets, it is in your best interest to sign for both the number of pallets and cartons on the D/R. Don't leave piece-counts to chance!

If you have a large number of pieces on pallets, or many odd-sized pieces on pallets that are difficult to count, you may decide, in the interest of time, to simply sign for the number of pallets. However, realize that you are taking a risk when you sign the carrier's D/R without exception. If multiple pieces are "unitized" by being stretch-wrapped on a pallet, make a note of the condition of the stretch-wrap on the delivery receipt. Was the stretch-wrap intact, loose, torn, missing, open on top?

Unless you have a consistent damage or shortage problem with a particular vendor, it is unreasonable to make the driver wait until you open the cartons to inspect the contents of each package. Avoid making general notations like "Subject to inspection" or "subject to count" on the D/R. They don't protect you in any way.

Similarly, try to avoid general damage notations like "2 damaged." What kind of damage is it? Is there a small crease in the packaging? Is there a forklift puncture? If you can, note which product is short or damaged, the extent of the damage, and be specific. Open, creased, torn, crushed, punctured, etc. are better notations than "damaged."

Noted exceptions on the D/R provide carriers with the "legal burden" to pay your freight claim. If there is a damage or shortage exception noted on the D/R, file your claim as soon as possible, but, in all cases, before the nine-month filing requirement. Claims' work is not unlike detective work. File claims before the paper trail and peoples' memories get cold. Avoid the temptation to get mad at a carrier for declining a claim that you filed nine months and one day after delivery. They have no legal obligation to pay it!

"Concealed damages" generate controversy and disputes between carriers and their customers. Anytime you see the term "concealed damage," you can just as easily substitute the term "concealed shortage." They are similar, but one has to do with the internal condition of the freight and/or packaging, while the other has to do with internal piece-count discrepancies between the freight and the related paperwork.

Visible damage is visible to all parties. Concealed damage cannot be seen by the parties inspecting the outward condition of the freight, e.g., the cartons. Now that we have reduced this to a black and white issue, the lines of distinction get blurred when visible damage is not noted on the carrier's D/R. When the D/R is signed by the consignee without exception, it becomes the claimant's burden to prove that the carrier damaged the shipment.

The reason for this is that there are at least three parties involved with every shipment: a shipper, a carrier, and a consignee. With a clear D/R, any of the parties could have caused the damage. Shippers do ship damaged merchandise (either innocently or on purpose). Carriers certainly damage freight, and consignees sometimes damage goods while moving them within their own facilities.

If you discover damages or shortages after the driver has left your premises with a clear D/R, notify the carrier immediately, but certainly within the required 15 days. If you call a carrier concerning a concealed damage within a day or two of delivery, you can sometimes get the carrier to make the notation on the D/R after-the-fact. They have no obligation to do this, but believe me when I say that concealed damages are as big of a headache for carriers as for you.

When you file a claim for a concealed shortage or damage, don't be surprised if the carrier declines your claim. However, don't give up. It is not uncommon for carriers, as an act of good faith, to eventually offer to pay 1/3 to 1/2 of the claim.