Dianna Whitby | Deerpark Cargo Claims
It’s 2 p.m., Central time on Friday and you just need to put in a few more hours before (yippee!!) it’s the weekend. Your hired carrier is on the phone, and he has a major problem. The California consignee has refused to accept a truckload of fresh chicken even though the carrier is there at the requested appointment time of 12 p.m. Pacific Coast time. Knowing you only have a few hours to resolve this with the Arkansas-based shipper, your dispatch team gets right on it. The shipper “promises” to get right back to the dispatcher. An hour later, your carrier is not so happy. He was booked on another load that picks up in three hours. The shipper still hasn’t gotten back to you.
Two hours later, you wonder why the carrier needs to use a phone, as you can hear him screaming all the way from California. The shipper says that the consignee “might” be able to squeeze the load in on Monday. When you politely ask for layover money for the carrier, the shipper laughs and says we should just hope they take it Monday.
You call the carrier, who
naturally explodes. He just missed his outbound pick up and now you are telling
him that he’s stuck on the Left Coast for the weekend. He’s going to miss his
kid’s birthday party the following weekend! “Get this stuff off my truck!” He
demands. You agree to pay him $700 to layover and will have an eastbound load
him on Monday.
Monday afternoon, the consignee still hasn’t unloaded, and now, the shipper is saying that the consignee won’t take it because they are worried about shelf life issues. The shipper is also saying that the carrier didn’t show up on Friday (and the carrier doesn’t have any documentation), so the shipper isn’t going to take back the product and, by the way the claim value is $45,000.
Ever happen to you? In talking to several of my 3PL friends, this situation seems to be all too common. So, what’s the stuck-in-the-middle-3PL supposed to do?
First, remember the Cardinal Rule, “Get everything in writing. You can’t document a phone call.”
First, remember the Cardinal Rule, “Get everything in writing. You can’t document a phone call.” When the carrier calls, advise him to have the consignee note on the bill of lading why they aren’t accepting the load. The carrier should email the notated bill to you. If the consignee won’t sign, have the carrier take a time-stamped photo of the consignee’s location to prove he was there at the appointed time.
After notifying the shipper, and sending them a follow-up email with the consignee-noted bill or time-stamped photo, further document the situation with an “On Hand Notice.” A what? An On Hand Notice is a legal document stating that the order has been refused, and includes whatever flimsy excuse the consignee noted on the bill of lading. It specifies a course of action if the shipper doesn’t give disposition in 48 hours for fresh or frozen product, and up to two weeks on a dry shipment. The course of action should include selling the shipment for salvage and deducting the storage and handling charges from the salvage sale. The net proceeds from the sale will be sent to the shipper in lieu of any cargo claim.
It would be a good idea to alert upper management of the situation and your plan for resolution before sending the On Hand Notice. Make sure they are completely on board with this. Let your carrier know exactly what you are doing and pay him whatever layover money he requests. That amount will be deducted from the salvage sale, so your company isn’t going to lose any money.
If you have a favorite salvage buyer, loop them in as a possible sale and see if they can get some feelers out in California.
When your salesperson calls and plays the, “Do you have any idea who this customer is?” card, calmly advise them that if the freight delivers on Monday, there is no harm, no foul, but, if the shipper fails to resolve with the consignee, any resulting claim will have to be paid out of company profits. The carrier has documented that he didn’t do anything wrong. That information may change the situation in your sales rep’s mind and get him involved in resolving the issues. At this point, the more people working on the resolution, the better!
If your shipper doesn’t respond, and the consignee is still refusing to take the load after 48 hours, wait no more than 24 hours to sell the product as specified on the On Hand Notice. Promptly remit the proceeds to the shipper, less the carrier layover or any other storage charges you incurred.
Keep your documentation in a safe place for at least two years. The documents should include a copy of the refusal, the emails to and from the shipper regarding the refusal, the On Hand Notice, the invoice to the salvage buyer, as well as a copy of the check, an invoice from the carrier with the layover and/or storage fees, and a copy of the check to the shipper for the product less the charges. This file is your protection if the shipper decides to sue for non-delivery in the future.
Admittedly, this is a very
bold position to take, but it is one that not only protects your company, but
extends protection to the carrier. It is also a move that will get a reaction
from the shipper. Hopefully, that action will be a prompt consignee appointment
and a promise that this won’t
Dianna Whitby is Principal at Deer Park Consulting, LLC. For an On Hand Notice template, or other information about this article, contact Dianna at DeerParkCargoClaims@gmail.com. Please visit Dianna’s website, www.deerparkcargoclaims.com, for additional information about the services offered at Deer Park Consulting. Click on the “Contact” link to submit your questions.
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