Letter to the Editor

I just read the article titled "How To Handle Shortages on Bills of Lading" from the July 2004 MHM and, though I found it informative, I thought a significant point was missed. Though the legalities of the transaction are important, it is usually unnecessary to have to go that far in reconciling discrepancies. Customers, suppliers, and carriers have business relationships that should be adding to the profitability of all parties. This mutually advantageous business relationship (not the legal requirements of the relationship) is the most useful tool in resolving discrepancies. In the problem described in the article, my experience tells me that it is far more likely to be a supplier error or an error by the customer as they conduct the detailed check-in of the shipment. Both parties should be able to conduct a count of their inventory to determine if either has an offsetting variance. In most cases, this will resolve the discrepancy. If your supplier is unwilling to cooperate, you should consider finding another supplier.

As far as the carrier goes, if you are conducting a carton or pallet count at receipt and it matches the bill of lading, it is unlikely that the carrier created the shortage unless you have evidence or suspicions of tampering (opening cases, etc). If your product is prone to theft, you should work with your supplier to pack the shipments in a way that makes tampering evident or more difficult (special custom printed tapes for sealing cartons, seals for full truck loads, dark stretch wrap that hides the contents of the shipment, special wraps or seals for the outside of palletized loads).

No matter who has legal responsibility for the contents of the shipment, all parties have an interest in determining the true source of the discrepancy.

Dave Piasecki
Inventory Operations Consulting LLC

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