Shipping Damages

The problem of concealed shipping damages is a concern for any firm that receives merchandise. The following dos and don'ts are a guideline to help minimize problems and losses that can occur. Our thanks to the American Subcontractors Assn., the Associated General Contractors and the Associated Specialty Contractors, Inc. for their kind permission to reprint the following. A complete blooklet on the subject is available from any of the three groups. The address of the ASA k 815 Isth St. N.W. (902 Bowen Bldg. ) llashington, D.C. 20005.-Ed.

DO make sure that all valuable shipments are received by a responsible employee.

DO look for signs of damage when shipments are received. Any such indications should be noted on the carrier receipt form.

DO consider demanding an immediate inspection if external signs of damage are present. The driver may or may not comply. If he does, note all discovered damages on the carrier receipt form and in your records. If he refuses to allow an inspection, the shipment should be inspected by the firm's own personnel as soon as possible.

DO inspect all shipments as soon as possible after delivery.

DO have more than one person witness the inspection if possible.

DO file a claim as soon as damage is discovered.

DO ask the carrier for a copy of his tariff on disposition of loss and damage claims, and follow it closely.

DON'T overlook the advantages of first taking a diplomatic approach with the carrier. If this fails, then a more aggressive approach, perhaps eventually involving a lawsuit, may be in order.

DON'T hesitate to remind the carrier of his obligations under his own tariff and the principles established by the ICC in Appendix E of Ex Pafie 263.

DON'T hesitate to write the ICC if the carrier fails to honor his obligations.

DO consider retaining an attorney if the damage is costly and the carrier adopts an unreasonable or arbitrary attitude.

DON'T forget to retain copies of all documents and records of information which could be pertinent to the damage claim and any eventual litigation over it.

DON'T forget that in an "FOB Factory" shipment, title passes to your firm when the shipment leaves the factory. You risk legal difficulty (and credit problems) by refusing to pay the manufacturer for goods which are damaged in shipment.

DO consider the possibility of putting "FOB Delivery Point" clauses into purchase orders. If accepted by the manufacturer, this can transfer the risk of loss to the seller.