NAUTICUS LLC Cargo Surveyors Loss Control Consultants

 

 

 

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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 their losses against carriers. You will note hereunder some illustrations of common errors made on shipping documents.

On a freight bill under the heading "Number of Packages" was entered 22 cartons, whereas, under the description of goods was entered "disk drives."

When the shipment was delivered to receivers, the following exceptions were noted on the delivery receipt:

It was subsequently learned that the shipment actually consisted of 22 pallets containing 704 cartons of hard drives. One will note that, for a claimant, it will be difficult to file a claim with underwriters for 32 damaged cartons (one pallet load), as the delivery receipt clearly stated that only 1 carton was damaged. Furthermore, cargo 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. Consignees 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 that 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 one shipping carton, whereas 100 pieces of software were placed in a master carton.

From the above, it would appear that the shipment actually 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 hard drives are usually accompanied by software, these shipping totals appeared to be correct. However, as the shipment was not accompanied by a packing list indicating, for instance, Carton Nos. 1 through 75 to contain 20 hard drives each, whereas Carton Nos. 76 through 30 contain 100 pieces software each, and consignee had not identified missing cartons by carton numbers, the question remains, were there indeed 18 cartons, each containing 20 hard drives missing, or maybe 3 cartons of hard drives plus 15 cartons of software.

It should be noted that the value of 1 carton of software was considerably less than 1 carton of hard drives.

From the above, it can be seen that improper or incomplete shipping documentation may prejudice a loss with cargo underwriters and/or carriers.

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