14 November, 2017 Marcel Merkx Marcel Merkx

Three Tips to get your Logistics Proof of Conditions right

Three Tips to get your Logistics Proof of Conditions right

Let me ask you, did this happen to you? As a logistics service provider, you ended up paying a shipper or consignee. You got blamed for damage or loss of cargo and you did not have the ability to fend off the claim… Then, what did you do? Told your handling teams to start take photos and report damages as material comes in? Good move. And now? You’re spending a lot of time and all you got is a bunch of photo’s on WhatsApp, e-mail or some file-share. Doesn’t feel quite right, does it?

Now, let’s have a look at this challenge. What you are doing is to create a “Proof of Condition” (“PoC”) of cargoes. To make the Proof of Condition consistently useful, I recommend to implement the following three tips:

  • Think about your process
  • Train to obtain quality
  • Manage your PoC’s

Let’s have a closer look:

1. Your process

A good PoC starts with the hardest part: your process. Unfortunately, there is no single process that fits all situations. But if you adopt your process closely to the risks involved in the specific supply chain you are a part of, you’re well along. This requires a good understanding of your role in the supply chain.

Generalising, in collecting a PoC, you need to focus on two places: where you receive goods and when they are handed over to the consignee (or their carrier) –outbound-. It is important to capture PoC’s in both activities: and recognise you need to look for different things.

With a “Receiving PoC”, you record state of the goods as they arrive, or handed over by the shipper or their carrier. Focus point is damage and other non-conformities. If the cargo comes in damaged or otherwise in problematic conditions, you need to take action.

But cargo damage is a wide term. What if the material has become wet? Well, if you are handling a car or bricks this may not be an issue; but if it happens to be paper …. Or how about damaged packaging? In some cases (e.g. some industrial goods) this may be acceptable; but are you sure the cargo itself is still in good order? A good way to handle such situations is the “better safe than sorry” approach. Let the cargo-owner know about the state of the goods and any deviations you’ve observed and possibly ask them for input. After all, they know their requirements like no one else.

With an “outbound PoC”, you take photo’s showing the cargo leaving in -presumably- good condition. In this phase it is important to show the cargoes in a comprehensive view: obviously, a photo of an undamaged left side of a box will not protect you from a claim of the right side damage.

But there may be more to it. If you are moving food goods, or even raw materials that are used in steel manufacturing, it may be required to transport material in a clean and dry truck or container. In that case, take evidence that you took care to inspect the transportation means prior to loading the cargo. Also – what do you want your staff to do, when they see a non-conformity? Usually it will not suffice to make a photo and store it somewhere; you will need to do something with the situation, like informing the owner of the cargo.

2. Train to obtain quality

Nowadays everybody makes photo’s all the time, right? So why would you explain your staff how to take a photo of that cargo? Well; I’ve seen what happens – you get all black or blurred images or images with people on it (maybe even your compulsive smoker in the corner of the warehouse). That is not useful. So explain your team how you expect them to take their images. See also our blog “How to get a good CargoSnap”. Classify damage; damage to packaging may need to be treated differently than following up on dirty transportation equipment.

3. Manage your Proof of Conditions

Create structure to your PoC documentation. Store it as long as your potential liability lasts.

  • Link your records
  • store and backup<
  • Consider using a third party (like CargoSnap) to store and handle the records. This helps in creating an objective case and gets rid of the nitty gritty of storing and managing the wealth of information being collected.

But also consider: is there any hidden value in a well managed PoC? Do you have customers that would appreciate a complimentary copy, or … would they be willing to pay for one? I bet, after all this work, you will find you have created value!