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Ask a 3PL Expert: Combating Shortages

Posted By Administration, Thursday, June 11, 2015
Updated: Tuesday, June 9, 2015


by Scott Weiss, Port Logistics Group


Advice on routing guide compliance, 3PL relationships, and domestic logistics topics creating supply chain challenges for your organization. If you have a question or challenge please send your questions to sweiss@portlogisticsgroup.com.

Question
We have been receiving chargebacks claiming short shipments. What systems can we put in place to get these reversed in the future?
- Julice, San Francisco, California

Carriers pick up product from thousands of vendors on a daily basis; it is absolutely critical for them to keep product moving. Equally important is the need for retailers to receive the right product at the right time and have the product in stores as promised. Many years ago, when nearly all shipments were shipper load, driver count, combating shortages was much easier. In those days, the driver for the retailer's designated carrier was required to count each carton, sign for the piece count, and be responsible for making sure that the signed piece count was delivered to the retailer's DC.

However, in a world where driver turnaround time is key, the majority of outbound loads these days are shipper load and count. As described in a RVCF's June 2012 interview with transportation attorney Gerard Smith, "In shortage cases, the principal difficulty arises in shipments in which the quantity of goods cannot be visually ascertained at the time of tender to the carrier, either because of the method of packaging (shrink-wrapped pallets, etc.) or because the shipper loads the container or trailer in the absence of the carrier's personnel. In such cases, carriers will often refuse to acknowledge the shipper's count and will use qualifying notations on the bill of lading such as 'said to contain,' 'shipper's load and count,' etc."1

For this reason, shippers must be careful to maintain accurate records in order to have any hope of reversing these types of chargebacks. Here are some suggestions of information that should be kept:

Signed bills of lading/EDI confirmation library – The signed bill of lading is the foundation for starting your chargeback reversal research. If you utilize a 3PL, you should ask them to automate the sending of bills of lading and EDI 945 documents (outbound shipped order) directly into your ERP.

Trailer manifest documentation – Hard copies should be scanned into your system; this is a close second to the signed of bills of lading.

Picking lists – It is critical to maintain detailed documentation of the original pick ticket, who picked the order, and when.

Detailed documentation of outbound auditing program – Any DC should have demonstrated SOP's in place to make sure the outbound order is shipped out accurately. For example, a leading 3PL has a program called "no pallet left behind." This program makes sure that a bill of lading cannot be generated and outbound load cannot be closed until all product has been scanned in the system.

Scanning documentation – RF based DC's have the advantage of recording and furnishing an automated report showing the time and person that scanned a carton into the outbound trailer load.

Photos of outbound load – If you are continually receiving shortage claims, it is well worth the cost to maintain a photo library of the specific outbound loads, which will allow you to show what the load looked like prior to departure from your DC and to drill down on the product inside the trailer prior to departure.

Records of who loaded outbound product – This can be manual or electronic, but the bottom line is that you are maintaining detailed documentation and SOP's of who loaded and what was loaded.

Records of who signed for the outbound load – Again, this can be manual or electronic; the key is to maintain detailed documentation of who picked up the load and when.

Constant communication with the retailer's traffic department – You need to make sure that you develop a relationship and are proactively managing the relationship with any of the retailers that you are receiving these charges from; this might include weekly calls or e-mails, quarterly face-to-face visits, meetings with the carriers, and visits to the retailers' DC's.

Key performance indicator (KPI) tracking – Regardless of whether you do it yourself or outsource, outbound accuracy should be captured in the management of your DC. Examples of KPI's include perfect order percentage and overages, shortages and damages (OS&D) percentage.

By maintaining detailed documentation of shipment processes, identifying operational issues or disputing chargebacks will be a streamlined process and reduce the time, cost, and labor associated with received chargebacks as well as the prevention of chargebacks that would have otherwise occurred had such documentation not been kept.

[1] http://www.rvcf.com/page/VCF_Report_12_06_1


As Vice President, Business Development, Scott Weiss works closely with apparel, footwear, and housewares manufacturers of all sizes to ensure compliance with retailer routing guide requirements.  Port Logistics Group is a market leader in gateway port logistics services, operating over 5 million square feet of warehouse space.  Services include port drayage, import deconsolidation, warehousing and distribution, retail compliance, local transportation, and store delivery in key port locations of Los Angeles/Long Beach, New York/New Jersey, Seattle, and Savannah.  Scott may be reached at sweiss@portlogisticsgroup.com or (562) 977-7620.

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Tags:  Shortages 

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