The most common errors in shipping and receiving freight

By William J. Augello -- Logistics Management, 5/1/1999

As an observer of the transportation industry for the past 52 years, I've seen shippers and receivers commit the same errors over and over again. The following is a list of some of the most common errors. I hope the transportation industry will make note of these costly mistakes so that it can work to reduce or eliminate them.

Receivers often fail to:

* Inspect shipments upon delivery

* Write a proper exception notation on delivery receipts

* Permit only the person who inspected the freight to sign the delivery receipt

* Retain all packaging until a claim has been settled

* Report concealed damage or shortages with 15 days of receipt

* Read and critique carriers' inspection reports before signing

* File claims on time

* Determine carriers' credit terms to avoid a "loss of discount" penalty

* Notify carriers of damage and request an inspection

* Check seals on trailer doors upon arrival

* Attempt to mitigate damages before returning rejected shipments to carriers

* Audit freight bills and contest errors within 180 days

* Train all personnel in proper receiving procedures

* Keep unloading appointments.

Shippers often fail to:

* Request carriers' tariffs before shipping

* Educate themselves about tariff rules and accessorial charges

* Determine carriers' liability limits before shipping

* Thoroughly check drivers' identities before releasing freight

* Respond to "On Hand" notices promptly

* Control damaged freight that could expose the shipper to product-liability suits

* Ensure that payments made to intermediaries will be passed on to carriers

* Enter into contracts with carriers and intermediaries

* Inform carriers of special delivery requirements and the consequences thereof

* Execute Section 7 in bills of lading for "collect" shipments

* Properly type delivery information on bills of lading

* Check carriers' and brokers' U.S. Department of Transportation (DOT) operating authority and cargo insurance filing

* Read the "exceptions" and "exclusions" in "all risks" cargo policies

* Declare an agreed value on the bill of lading

* Use proper classification descriptions on bills of lading

* Develop a system to verify piece counts for "shipper's load, stowage, and count" shipments.

As suggested in previous columns, all parties to transportation arrangements could avoid these and other costly mistakes by following the Transportation Consumer Protection Council's Corporate Procedures for Shipping and Receiving manual. Only by requiring employees to adhere to such a manual can downsized corporations preserve the expertise developed over the past decades.

Editor's Note: Do you have a "pet" error or omission? Readers are invited to submit their own list to the writer by fax at (516) 549-8962.

William J. Augello Esq. has practiced transportation law for 46 years. He also is the executive director of the Transportation Consumer Protection Council, an organization that is devoted to protecting shippers and receivers in transportation matters, such as freight loss and damage, undercharges, and contracts. He can be reached at (516) 549-8984 or via e-mail at augello@transportlaw.com.