As a practical matter, the shipping department can be the area that
causes claims for loss, damage, non-delivery or delay, or worse, that
results in a law suit filed against your Company. Responsibility does
not end when the driver signs the bill of lading and the truck leaves
Consignees should be instructed by their vendors as to the proper procedures
to follow when receiving freight as they may be relatively unsophisticated
in transportation matters and carrier liability issues.
Many good shipping
practices are taken for granted; even by the most experienced personnel.
It is recommended that they be reviewed at regular
intervals, as some procedures occasionally fall by the wayside.
practices are recommended:
- Maintain a "Daily Shipping Log" showing
details about your shipments such as carrier information, the loaders
and their method of
loading, the condition of the equipment, pick up times, dates, the
product and its condition, etc.
- Consolidate all shipments to the same
consignee on the same date. This will not only result in lower shipping
costs, but may also reduce
loss and damage, and improve customer relations.
- To ensure the likelihood
of safe loading and handling by the carrier, be sure to mark all freight
properly with precautionary labels such
end up", or "fragile", or "use no hooks", "use
extension forks on forklifts" for extra long freight, "protect
from freezing", etc.
- Identify hazardous materials on the bill
of lading, the product, and also make sure that individual shipping
containers (boxes, drums,
and vehicles are properly placarded.
- Make sure to determine how much
cargo insurance coverage you will need and convey that information
to your transportation provider. This
will enable you to determine whether to purchase supplemental cargo
insurance or pay excess value charges as the situation dictates. Confirm
is aware when product is being shipped with released, declared, or
agreed values in order to obtain a lower shipping rate. This will result
reduced carrier liability in the event of a cargo claim.
- Properly describe
the merchandise on the bill of lading in accordance with the National
Motor Freight Classification (NMFC) product commodity
description. Brand names should be avoided since they do not properly
describe the product for shipping purposes. Using the correct tariff
and product classification description may preclude a defense to a
loss or damage claim that the carrier was unaware of the value of the
or that the goods were described incorrectly to obtain a lower rate.
- Verify the consignee's name and address. Even the proper zip code
is important since some states have two or more towns with the same
- Specify the carrier routing on the bill of lading. Carriers who
are familiar with your freight, your normal business hours, and your
will normally handle your freight more proficiently. Your freight claims
will also be handled in a more expeditious manner by carriers who are
experienced with your account.
- Properly load, block and brace freight
on the carriers trailer. Standard loading procedures should be developed
and described in manuals,
loading diagrams and pictures. These records greatly contribute to
proving that a load was in good order and condition at the time it
to the carrier.
When product is loaded by the shipper in the carrier's
driver's presence, do not permit the driver to write "SL&C" (shipper
load and count) on the bill of lading. If a carrier has record that
product was loaded and counted by the shipper it can be difficult to
carrier liability both in the event of a shortage or if a load had
shifted and, as a result, was damaged in transit.
The driver is ultimately
responsible for making sure the freight is safely and securely loaded
so that it will not shift in transit and
danger to the public on the road.
Some shippers maintain a strict policy
against allowing any shipment to move "SL&C", and post
signs at their shipping dock to that effect as a reminder to drivers
that they are responsible and
for counting and loading the freight.
You may want to take photographs
during and after completion of loading. The back of the photographs
must be signed, dated, and noted with the
appropriate references to the shipment and vehicle used.
- When trailer
seals are applied, record the numbers in a shipping log (NOT on the
bill of lading) and alert the consignee to break the
seal upon arrival, and to record the numbers. Do not allow the driver
to break the seal! The consignee should also check the seal to be certain
it has not been tampered with or broken and glued with super glue!
- Require the carrier's driver to sign for all the pieces they
are picking up and not the number of shipping units (skids or pallets).
This will provide the best evidence in establishing a "prima facie" case
of carrier liability in the event of loss or damage.
Do not allow drivers
to use the following notations on the bill of lading when they
are picking your freight up:
a. STC (said to contain)- In this instance,
drivers are not assuming responsibility for any number of pieces-
only that they are picking
up a pallet that is "said to contain" a certain number
of pieces. The driver was not able to verify the piece count. Unless
takes responsibility for the number of pieces he is picking up
it will be difficult to establish that the carrier is liable for
and did not deliver all of the product that they picked up.
(shrink wrap pallet)- In this case a driver is merely taking responsibility
for picking up a shrink wrap pallet (with no reference
to the number of pieces he is taking responsibility for). Therefore,
in the event of an alleged shortage, if a carrier picks up a shrink wrap
skid and delivers a shrink wrap skid, carrier liability will not have
been established and any resultant cargo claim will likely be declined.
- When shipping any "used" product such as machinery, electrical
equipment, etc? keep in mind that most carriers limit their liability
to $0.10 per pound. When buying used machinery, or when shipping machinery
for refurbishing or repair, be certain to declare its value on the
bill of lading, unless it is covered by a rider on your Company's business
insurance policy. Supplemental insurance may also be available upon
prior to pick up.
After a machine has been "rebuilt, refurbished,
remanufactured or reconditioned in any way it will be subject to the
same provisions applicable
on such articles when new," per Item 425 of the National Motor
Freight Classification (NMFC). Be sure to advise your transportation
and also indicate on the original bill of lading that the product you
are shipping has been refurbished.
- Occasionally, a shipper may have
a critical need to have a delivery made either at, or by, a specific
time. A failure to meet that deadline
could result in consequential damages being incurred.
carrier is only bound by "reasonable dispatch" and
is not liable for the special damages that may result from; a production
line shutting down, meeting a rigger to offload a piece of equipment,
delivering to a trade show, purchase order cancellation dates, advertisements?
When a carrier does agree to make a delivery within the designated
period, they can however, be liable for a specific amount of special
damages if it fails to do so. HOWEVER, the bill of lading must be marked
accordingly at the time the freight picks up. For example, the bill
lading may read:
" Delivery to be made by (date and time) or
carrier will be liable for special damages in
the amount of $______________________.
Signed (by carrier official)_____________"
- When tarpaulins are required
to protect a load, insist on checking the tarpaulin after it has been applied
by the driver to ensure
it will remain intact en route and fully protect the shipment from
- Verify the gross weight of your shipments, including
the weight of the pallets and/or tonnage. Most less than truckload
aggressive weight and research programs and will charge for reweighing
shipments when a variance is discovered from the weight stated on the
original bill of lading.
- The practice of allowing carriers to "drop" trailers
at the shippers, or consignees facilities and leave before the freight
loaded or unloaded, while being very convenient for both parties, can
present problems. When loaded trailers are dropped without the shipper
being present to inspect the seals or to check the condition and quantity
of freight being delivered, recovery of a loss or damage claim will
be difficult. Carriers will generally deny responsibility for any claims
resulting from these types of deliveries.
Therefore, if the parties
agree on dropping trailers, an agreement must be reached beforehand
which spells out how claims will be treated,
whether they may be filed at all. All freight should be counted by
the carrier within 24 hours of pick up and all shortages reported to
shipper immediately upon discovery, and in no case later than 48 hours
of pick up.
- Install security equipment, personnel and guard services.
Guard against theft and pilferage of your products and equipment.
Monitor them regularly.
Cameras and other photographic devices are effective in preventing
imposter pick-ups. Check drivers' licenses, pickup orders, employee
and record them with vehicle license numbers.
Do not give your freight to just anyone who claims to be sent to
make a pickup!
- Shrink wrap pallets whenever possible. Use special
tape printed with your Company's name along with a warning label
to the consignee
the shipments contents if the tape is tampered with or broken at
the time of delivery. Carriers may break down a pallet to improve
and vehicle utilization unless directed not to do so in advance
by the shipper.