Q: I’ve always enjoyed your column, so I immediately thought of you when I encountered a Christmas-time comedy of shipping proportions.
We stock product for one of our remote customers at a third-party warehouse. On request for product from our customer, we issue the warehouse a picklist saying, “release for pickup item 1 (pallets 1–3), item 2 (pallets 6, 7, 9),” etc., to the customer’s trucker Y on a given date. Normally, the truck arrives, the warehouse creates the summary truck bill, and loads him, both the warehouse and the driver sign the bill of lading (B/L), and we invoice the customer against that.
This time, it wasn’t so simple.
We requested them to load 12 pallets out. The customer called us after the delivery asking where some of the release was, and said it received only seven pallets.
We checked the documents the warehouse had provided, and found this mess:
The B/L showed 15 pallets loaded, not 12. It also showed a wrong consignee.
The backup documents showed only 11 total pallets picked, four of which were written on the sheet by hand.
Other parts of the backup documentation showed 12 pallets shipped or 10 pallets shipped.
Weights on none of the documents matched the expected.
The warehouse insists it shipped all 12 pallets, that it did a full physical check, and the missing pallet wasn’t found there.
The carrier has provided a time-stamped GPS trace of its truck showing that it (correctly) disregarded the wrong consignee and took it to the right one directly after loading. Our warehouse also called the (wrongful) consignee just to check, and it received nothing from anyone that day. The carrier notes that for safety reasons the driver isn’t allowed in the warehouse’s loading area and signs the B/L blind to what was actually loaded.
So, at this point, I think my reasonable course is to claim against my warehouse for one absent pallet, and to invoice my customer for the 11 pallets we expect did ship as (sort of) documented, and then leave it to him to sort out the other missing four pallets with his carrier.
A: I most heartily disagree with your proposed resolution. To claim against the carrier, your customer would have to present proof that the 11 pallets you’re hypothesizing were loaded aboard the truck actually were, and that on arrival only seven were delivered. The paperwork mess you’ve described is a far cry from evidence of the former.
Indeed, one of the backup documents you specified suggests that perhaps only seven pallets were dispatched from the origin. You say it ostensibly shows 11 picked, but that four of the entries were handwritten. Well, 11 minus four equals seven, which is certainly suggestive.
Be that as it may, the documentation your warehouse operator provided is so inconsistent that I can’t imagine any judge or jury accepting it as proof of pretty much anything except the incompetence of those who prepared it. Your customer’s putative claim against its carrier would therefore fail, and it’d be rightfully irked at you for leaving it in that position, considering (so far as it’s concerned) you were the source of the flawed paperwork.
As Harry Truman used to say when he was the US president, “The buck stops here,” pointing at his desk.
It’s your warehouse (at least, you picked it), so it should be your problem from your customer’s perspective. That doesn’t mean, though, that you need to eat the loss from these five missing pallets yourself. As you’re proposing to do with one pallet that you’re (very generously) assuming was the only one the warehouse failed to load, you should hold your warehouse responsible for everything that didn’t show up. The same rotten documentation — prepared, be it noted, by the warehouse operator — that sabotages your customer’s presumptive claim against its carrier also undercuts its contention to you that it loaded more than was actually delivered.
So, in the interest of fairness (and also good customer relations), cut your customer a little slack here, and get it off the hook. The net result of your holding your warehouse operator responsible for the entire loss should be some improvement in its procedures (if not, I’d find a new warehouse operator). But laying the burden of part of the loss on your customer won’t offer any such side benefit and is palpably unfair to boot.
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; email, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.