Receiving Dock Procedures for Shortage and Damage
Carriers cannot prevent all instances of freight loss or damage so when it happens, there are a few steps you can take to protect yourself and help assure the freight claim gets paid.
- Do not sign the freight bill (FB) or bill of lading (BOL) until you have counted and inspected the freight. This also goes for shrink-wrapped pallets – count the cartons.
- Inspect the delivery carefully to make sure all cartons are accounted for and bear no signs of damage, including re-taping and water damage. The driver may be in a hurry to go to his next stop, but do not be put off by that.
- If cartons have been re-taped, photograph and open them to assure the contents are intact.
- You must note any discrepancies, damage, or shortages, in detail, on the FB or BOL and take supporting pictures of the damage or shortage.
- In case a carton was re-taped or damaged but you can not immediately open and investigate you should note “one carton re-taped/damaged/wet, etc.”) so if you find damage later, you are protected.
- Do not refuse shipments, no matter how damaged, unless there are special circumstances, and only with the shipper’s and carrier’s knowledge. You may be charged for storing refused shipments, as well.
- Report the damage or loss to the carrier immediately upon discovery, but the guideline is in no case to wait more than five (5) days. You can search “NMFC guidelines for filing claims” for more detail.
- All parties are required to mitigate damages so, assuming you have taken the necessary documentary photographs and noted the FB or BOL, do your best to make sure you minimize the losses. For example, if the cartons are soaked but the contents are salvageable, remove them before more damage is done.
- Carrier Inspection
- In case of concealed shortage, do not dispose of the container(s) or remove the contents unless the carrier waives the right to inspect. If you must remove the contents, have good pictures of the packaging as was opened.
- In case of damage, keep the packaging and damaged goods for a carrier inspection and/or salvage, even if they are not salvageable. You MUST retain them for inspection and possible salvage by the carrier. If the items are perishable and will spoil, contact the carrier for immediate instructions – you are not required to maintain a health nuisance.
- Pay the freight bill.
- File the freight claim promptly, and accompany it with the complete documentation. The documentation of the loss or damage is critical.
- A properly filled out freight claim, representing an actual demand for payment of the loss (not just a notice that a loss or damage happened).
- A copy of the freight bill (paid)
- Bill of Lading and delivery receipt with exception notifications
- Copies of photographs where applicable.
- Invoice copies that show how much you paid for the goods.
- Follow-up within 30 days to make sure it was received and is being processed.
- Lastly, do not get overly hung up with FOB terms as to whether the consignee or consignor is responsible file the claim. Document it, file it (or have consignor’s acknowledgment they will file the claim), and pursue it so damages are minimized for all parties. You can get more information on this subject by referring to our Best Practices Paper on Freight Claims Filing blog post.
Interested in learning more? Read our Best Practices for Shipment Shortages post.