When surveyors are handling cargo losses, it is often found that shipping documents are improperly prepared, which can result in underwriters not being able to settle the claim under the terms and conditions of the policy of insurance, or underwriters not being able to properly subrogate of the policy of insurance, or underwriters not being able to properly subrogate their losses against carriers. We will show illustrations of common errors made on shipping documents.
On a freight bill under the heading “Numbers of Packages” was entered 22 cartons, whereas, under the description of goods was entered: disk drives”. Ehen the shipment was delivered to receivers, the following exceptions were noted on the delivery receipt: “one carton damaged”
It was subsequently learned that the shipment actually consisted of 22 pallets containing a total of 704 cartons of hard drives. One will realize that, for a claimant, it will be difficult to file a claim with underwriters would, of course, experience the same response from carriers in their subrogation efforts.
On a second freight bill under the heading “Number of Packages” was listed 90 cartons, whereas under the heading “Description” was entered “hard drives and software”. At the time of delivery, a notation was made that only 72 cartons were received. Consigness thereon filed a claim with underwriters for cartons were received. Consigness thereon filed a claim with underwriters for a short delivery of 18 cartons, each containing 20 hard drives.
Further investigation revealed that the shipper’s invoice stated the shipment consisted of 1500 hard drives, without making further reference as to the total quantity of master cartons in which these hard drives were packaged.
Examination of other shipments from the same supplier revealed that normal practice was to place 20 hard drives in a shipping carton, whereas 100 pieces of software were placed in a second carton.
From these findings, it would appear that the shipment most likely consisted of 75 cartons containing 20 hard drives each, totaling 1500 hard drives plus 15 cartons software containing 100 pieces each, also with a total of 1500 pieces.
Considering the fact that the hard drives received by involved consignees are generally accompanied by software, these shipping totals appeared to be correct. However, as the shipment was not accompanied by a packing list indicating, for instance, Cartons Nos. 1 through 75 to contain 20 hard drives each, whereas Carton Nos. 76 through 75 to contain 20 hard drives each, whereas Carton Nos. 76 through 90 contain 100 pieces software each and consignee had not identified missing cartons by carton numbers, the question remains, if there were indeed 18 cartons, each containing 20 hard drives missing, or may be 3 cartons of hard drives plus 15 cartons of software was considerably less than 1 carton of hard drives.
From this, it can be seen that improper or incomplete shipping documentation may prejudice a loss with cargo underwriters and/or carriers.
It is apparent that preparation of shipments for transit should be prepared by experienced and knowledgeable people. As more shipments are being prepared by shippers without sufficient experience or knowledge, it is very likely that shoppers and receivers will experience losses that could very well have been prevented.
A cargo surveyor or loss control consultant providing loss control services should provide his service in the following areas:
Preparation of shipments
This is not restricted to packaging only, but can extend into design modifications. Therefore, the surveyor should be familiar with the product(s) to be shipped, so he will be able to discuss the various aspects and conditions of the cargo with shippers. Furthermore, he should have knowledge of the trade routes involved; it’s environmental and climatic exposures, as well as the vehicle(s) to be used for the transportation of the cargo.
The security involves not only the protection against pilferage or theft, but also fire, flooding, etc., during all modes of transportation used, as well as at all transit points (warehouses) for the entire transit route.
The surveyor should be familiar with the various shipping documents accompanying the shipment and that they are properly prepared, in order to assure identification of the shipment(s) and compliance with carriers and cargo underwriter’s requirements.
Assure that all personnel who are involved with the shipping and receiving of cargo are familiar with the various requirements of carriers and cargo underwriters, as well as the various shipping documents commonly used. It can be seen that the surveyor or cargo consultant providing loss control services has to properly prepare himself and research the various aspects of each loss control assignment.