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Feb.09, 2015

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Q&A 100 THE JOURNAL OF COMMERCE FEBRUARY 9.2015 By Colin Barrett Q: CAN YOU LEND some expertise to a situation that has arisen recently between our warehouse cum broker- age and a carrier that hauls for us on a somewhat regular basis? A few months back, we contracted with the carrier to move a load from our warehouse about halfway cross- country. The carrier picked up and delivered as expected. After more than a month (and a few attempts by our admin), we finally got a proof of delivery and discovered that the POD notes a huge shortage of 326 cases (10 skids)! The bill of lading is signed seal intact, and the seal number noted by our warehouse and by the POD signa- ture match. The matter of reconciling with our warehouse and seeking credit or salvage for the cases left off by the warehouse is being dealt with, but I feel the carrier has some skin in this also, regardless if there was a seal or not. The carrier says it verbally told one of our more senior brokers here the load was signed short 326, which we do not believe would go undocumented as it did, particularly with this experienced broker. We now face a substantial claim from the consignee, and, as expected, the carrier feigns innocence because the load is signed seal intact. I have noticed over the years a number of shipper-carrier agreements where the shipper holds the carrier lia- ble for cargo loss if they do not report shortages in X number of days, whether sealed or not. Do we have any standing to seek any relief from the carrier? Had the car- rier notified us as it should have on the day of unload or near that time, we may have had a chance to ship a replacement shipment to avoid the cargo claim, but after 30-plus days, the purchase order is closed and there is no opportunity to make the shipment right. To be fair, the carrier's driver has no access to the shipping or destina- tion dock to count freight, so verbiage on our carrier load confirmation that confirms the count is moot and not applicable. Even if we don't have any standing against the carrier in this situation, can we add language in the future to our carrier broker agreements and load con- firmations that legally binds the carriers to report discrepancies in a reasonable amount of time, whether a load is sealed or not? Does this carrier have any cul- pability for what I believe is intentional "blindness" to our large shortage. A: I'M SORRY, BUT I'M A little unclear as to how you feel you've been severely damaged enough to warrant any relief of any sort from the carrier. It was certainly annoying, to say the least, that the carrier took so long to get you the POD noting the shortage. (The supposed telephone notification appears to be in some question as to whether it ever hap- pened.) But the thing is, how did this injure you? To be sure, the effect was to delay any investigation you may have planned into the shortage. If the shortage had been only a case or two, that might have mattered; but with a shortage of 326 cases, the delay shouldn't make much difference, given that you are both the consignor and the broker. The missing cases should show up in your warehouse records or you should have fairly clear evidence that they disappeared en route. (The intact seal record isn't proof-positive against the latter; seals can, in fact, be slipped.) Either way, your investigation hasn't been compromised seriously by the time lapse. Your complaints about the delay making it impos- sible for you to "make the shipment right," and "avoid a cargo claim" don't make a lot of sense to me; whether a purchase order has or hasn't been "closed" doesn't seem to affect the reality that the consignee was left 326 cases shy of what was expected. I might also point out that a sensible consignee should have made an issue of the shortage to you itself instead of just letting matters ride until time came to file a claim. For the future, you can obviously avoid this situation by incorporating into your carrier contracts a provi- sion such as you mention that you have seen — one holding the carrier liable for any shortages not timely reported to you. Some carriers may object to such a provision, but you can prob- ably find others who will agree to it. Again, however, I'd suggest that you try to figure out how delays such as you experienced with this load actually do you any harm before you get too pushy about cramming a provision of this nature down your carriers' throats. JOC Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010. NO FIX FOR THIS SHORTAGE After a load was delivered short, and a proof of delivery late, does the carrier have any blame and financial responsibility for make things right?

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