Cancel OK

Proving shortages: who holds the burden?

Cliff Sieloff
Cliff Sieloff is a Claims Analyst for Blue Book Services Inc.

The Problem: Receiver claims a shortage as to count on a delivered sale.

The Key Point: A boilerplate notation such as “subject to count” is not sufficient to prove a shortage.

The Solution: An alleged shortage should, at a minimum, be noted with specificity on the original delivery receipt.

Question: We ship oranges from Florida on a delivered basis. Last month, we sold a load of oranges to a receiver in Chicago who is claiming a shortage of 200 cartons. Their proof of the shortage is a stamp of the delivery receipt (bill of lading) that reads “Received under protest pending inspection and count.” The receiver never noted any specific shortage or missing product on the delivery receipt. We have attempted to resolve the matter, but it’s been a month, and they keep telling me “200 cartons were missing” and that I should pursue this as a carrier claim. Please advise.

Answer: After accepting the oranges, the receiver has the burden of proving the alleged shortage. This situation is specifically addressed in Blue Book’s Transportation Guidelines: Receivers are expected to note, with specificity, any problems or objections before signing the original delivery receipt to (1) help support their claim and (2) allow the Carrier the opportunity to investigate the allegations made. A generic notation included on delivery receipts as a matter of general practice will not usually preserve or advance a receiver’s claim. Failure to make a specific notation on the delivery receipt may undermine a receiver’s ability to successfully pursue a claim for damages. For example, a receiver that fails to note a specific shortage as to count (e.g., notes only “subject to count”) on the delivery receipt is unlikely to prevail on a claim for the market value of the missing product.

The boilerplate language stamped on the delivery receipt by your receiver in this case does not prove that 200 cartons were missing. Claims need to be proven, not just claimed. To prove a shortage, receivers are advised to count the product during the unloading process and specifically note the number of units they claim are missing on the delivery receipt.

Such a notation gives the carrier the opportunity to confirm (preferably with the driver’s signature) or challenge the receiver’s count. Any attempt to establish shortages after the product is out of the carrier’s possession and presence affords the carrier no opportunity to validate the receiver’s notation.

In your case, based on the documentation provided, how do we know the receiver’s count was accurate? Or that the product wasn’t lost while in the receiver’s possession? Or if the product was lost at all?

In the future, we would recommend that the receiver clearly note “200 cartons missing” or some similar specific notation on the original delivery receipt, and promptly notify all interested parties of the problem in writing. If a USDA inspection as to count can be obtained before the truck is unloaded, this can also be used to help prove the receiver’s alleged shortage.

Cliff Sieloff is a claims analyst for Blue Book Services’ Trading Assistance team. He can be reached at csieloff@bluebookservices.com.