Freight damage - Liability/work around 1

[TheOfficeSlave]

I am in the electrical contracting business and we continually recieve damaged shipments of products and which are also shipped to the wrong places. Is there a way to prevent or work around having these problems.

Let me explain in more datail:
if i order 25 light fixtures to say, and i instruct them to be sent to the job site with 24hr notice so we can be prepared with any equipment (fork lifts/lowes) to get the stuff off the trucks. I also instruct that there is NO UPS or RPS deliveries (UPS and RPS deliveries will walk up to any individual and release the shipments to them... then the products are either lost or stolen and it's not the freight companies liability anymore since the product was signed for). Not a problem if it wasnt for a strict construction schedule we have to meet. There is no After all of the detailed instructions to follow it never is delivered as requested. We buy through a distributer, who buys through a Manufactory Rep, who instructs the Factory to produce the products OR they find them stockpiled somewhere in the US and have them shipped. (Well...this guy is going to find the cheapest freight company and doesnt care except for the bottom line). We need these shipments on schedule, and must account for them all in order to pay out our billings. ...long story sorry....

ANYWAYS.... bottom line is HAS ANYONE FACED THIS SITUATION OR FOUND A BETTER WAY OF DOING THINGS WITH FACTORIES AND FRIEGHT COMPANIES?

any ideas?

Thanks,
Chad ( The Office Slave )

 

[thedaver]

Smug answer: You get what you pay for.

More enlightened answer: Start working on the collection of statistics based upon shipper, kinds of materials being shipped (sm., lrg., fragile, sturdy, shape), defects in shipping destination/releases, damaged goods as % of shipment, kinds of damage (handling, packaging, environmental). Without these statistics its hard to make a partner out of your vendor(s) since all you can do is keep submitting tickets/complaints to them... A loosing battle if you have lots of players to work with.

Then, with these stats talk to the vendor(s) and the shipper(s) about which of their service elements need improvement and why it's important to you. Be prepared to make a concession or two to get improved quality of service.

More importantly, they should come to understand that re-work generally costs more than doing something right the first time - particularly so in your situation given the costs of fuel lately. If they are having to handle returning merchandise and file insurance claims and whatever else is entailed to push defective product back upstream, I'm guessing that they'd also like to reduce some operational costs by omitting this expense in their process.

Leave them with more skin in the game to earn by shipping you something that is on time to your desired level of quality. If you don't state your expectations (probably to the fewest, select vendors) then you're left with the default level of service customary at the price point you're willing to pay.

Other angles:

The Teamsters or other local unions may play a role in this and may have some insights into how you might get your business done a bit better. You might not like the answer, but you need to figure out where you spend your money on quality. (i.e. send rememberances to the Dock Foremen occassionally).

Examine the cost of running some of the delivery leg(s) yourself.



D.E.R. Management - IT Project Management Consulting

http://www.dermanagement.com/

 

[TheOfficeSlave]

That would be nice but we are bound to a contract price. This price was determined by a bidding process, in which if your not the low number in the bid, you are not awarded the job. With this said we have no leverage when it comes to price, otherwise if we demand or even consider to pay more for quality of service, we will run ourselves out of business. This also said the only way we have found to somehow offset this is to develop a relationship, which we have with a select few. Unfortunately, there are only a few in the city, thus we are tied to the ones we already have a relationship w/ and from what we see they are doing what we tell them to. Its the service on the other end of the vendor, outside of our control. The Vendor also bids the same way, so if they arent low they also dont get the job.

Is there a legal term or phrasing we can use in all of our orders that ties the shippment to the freight or to the factory so the end user(owner)is not screwed from all the middle men?

Chad (The Office Slave)

 

[PDQBach]

Is there a legal term ..."

IANAL. You need a lawyer. Take your current purchase order over to your company's lawyer and let him/her have a "look-see".

On the projects I've worked on where there has been a significant purchasing component, it has always been handed over to the Purchasing department who dealt with the suppliers.

I think you've got only a few options:

1. The lawyer route (and you'll probably also have to follow step 2 or 3).

2. A "trusted receiving" operation (perhaps your own staff operating a lock up receiving/distribution area) at each shipment site.

3. A "centralized receiving operation" where your own staff perform the initial receipt, break down the bulk shipment receipt to smaller amounts and then re-ship it (by your own trucks and staff) to the end locations.

4. And this is the one that you may need to consider most seriously if the others cannot be made to work: declining to bid where the cost of shrinkage is excessive. Let's face it, if you're winning as the lowest bidder and then consistently losing (by theft/shrinkage) more than your profit then you aren't going to be in business very long.