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OPR: Admin/Facilities and Management Services
1. Purpose. This chapter prescribes policy, regulations and procedures for reporting and adjusting overages, shortages, losses, damages, and other discrepancies of property received by the USGS from commercial carriers. It also includes procedures and documentation for filing claims against carriers or suppliers.
2. Policy.
A. The USGS Receiving Officer, shall make a count of all items in each shipment received from carriers to determine the existence of any overages, shortages, or damage in accordance with 41 CFR 101-40.701.
B. When the total value of the loss, damage, shortage, or other discrepancy, or the value of repairs or replacement, on a single bill of lading or other transportation document, does not exceed $50, Government agencies are authorized, but not required, to observe a minimum of $50 or less in processing loss and damage claims against carriers and absorb losses of $50 or less.
C. When the total value of the loss, damage, shortage, or other discrepancy, or the value of repairs or replacement, on a single bill of lading or other transportation document exceeds $50, the transportation officer shall prepare Standard Form 361, Transportation Discrepancy Report, (Figure 1) as soon as possible, but not later than 45 calendar days after receipt of the shipment.
3. Responsibilities.
A. General. SM 410.1 and 410.3.
B. Specific. The Receiving Officer is responsible for accepting and verifying delivery of a shipment from a carrier. This activity shall document and report any discrepancies noted in the comparison of transportation documents and initiate any claims against the carrier.
4. Procedure.
A. Receipt of Shipment from Carrier. When accepting delivery of a shipment from the carrier, a complete inspection shall be made of the quantity and condition of the property received, and a accurate record shall be made and kept of any discrepancies or variations between the data shown on the covering bill of lading or other transportation documents. When an overage, shortage, loss, damage, or other discrepancy is noted upon receipt of shipment, a discrepancy report shall be prepared as required in 41 CFR 101-40.702-3. A damaged shipment shall not be rejected regardless of the degree of damage or the contract delivery terms, except as indicated in 41 CFR 101-40.704-1(c). The USGS receiving personnel should preserve the contents, the original package, and the packing material pending completion of inspection by the carrier. Where applicable, the following actions shall be taken in checking and documenting delivery conditions:
(1) When a shipment is received in a closed conveyance, a notation shall be made on the carrier's delivery receipt or freight bill and on the USGS copy of the delivery receipt or freight bill of the number and condition of any seals (i.e., intact, broken, or missing) on the carrier's conveyance and whether the shipment was properly loaded, stowed, blocked, and braced.
(2) On shipments other than in bulk, the number of pieces or packages in the shipment shall be physically counted and recorded by means of a stroke tally or other appropriate method.
(3) A notation shall be made on the carrier's delivery receipt, if available, and the USGS copy of the delivery receipt or freight bill of the condition of the railcar, motor vehicle, container, or other conveyance with particular attention to any circumstance that might contribute to loss or damage; e.g., loose flooring or sides or protruding nails or bolts. When there is suspicion or evidence of damage to an ocean shipment, the ocean carrier or his/her agent shall be requested to furnish details concerning the manner of stowage of the shipment aboard the vessel.
(4) If a shipment is received in apparent bad order, e.g., if the load is shifted or jumbled or containers are broken or leaking, photographs of the damaged freight and/or of conditions of loading which might have contributed to the damage shall be made, whenever possible, for use as documentary evidence in the event of a claim. Each photograph shall be marked indelibly with the Government or commercial bill of lading (CBL) number, the ocean or international air bill of lading number and/or the carrier's delivery receipt number, the vehicle identification number or vessel's name, and the date the photograph was taken.
B. Exceptions on Carrier's Delivery Receipt.
(1) Before signing the carrier's delivery receipt, the receiving activity shall note on the receipt specific details regarding the nature and extent of all apparent overages, shortages, losses, damages, or other discrepancies between the quantity and condition of the property as received and as shown on the covering bill of lading or other transportation document. Any notation placed on the carrier's delivery receipt shall also be shown on the USGS copy of the delivery receipt or freight bill. The receiving activity shall sign and date these notations and request the carrier's driver or representative also to sign the notations.
(2) In instance of an ocean shipment, placing an exception on the carrier's delivery receipt is not necessary if the condition of the shipment has been the subject of a joint survey or inspection; that is, if representatives of the carrier and the USGS jointly surveyed or inspected the shipment while it was still in the possession of the carrier, and if a copy of the joint report signed by both representatives is in the possession of the receiving activity.
C. Discrepancies in Government Bill of Lading Shipments.
(1) When a shipment is made on a SF 1103, U.S. Government Bill of Lading, or on a SF 1203, U.S. Government Bill of Lading-Privately Owned Personal Property, the consignee shall make certain the GBL number is shown on both the carrier's delivery receipt and the consignee's copy of the delivery receipt. When a shipment is made on a commercial bill of lading to be converted to a GBL, in which case the Government bill of lading number would not normally be known at the time of delivery, the consignee shall sign the delivery receipt and enter the GBL number, when it becomes available, on the consignee's copy of the delivery receipt.
(2) When a discrepancy occurs in a shipment made on a Government bill of lading, appropriate notations shall be made on the delivery receipt as required in 41 CFR and a discrepancy report shall be prepared as required in 41 CFR 101-40.702-3.
(3) The agency responsible for payment of freight charges, as identified in the "Charges to be billed to" space in the Government bill of lading, is usually also responsible for determining carrier liability and processing claims. The consignee shall forward a discrepancy report and copies of supporting documents; e.g., delivery receipts, photographs, and carrier's inspection reports, to that agency, to the shipper at the address shown on the Government bill of lading, and to any other addresses as may be required by the agency's regulations.
D. Preparation of a Discrepancy Report.
(1) When the total value of the damage, shortage, or other discrepancy, or the value of repairs or replacement, including unearned freight charges, where applicable, on a single bill of lading or other transportation document exceeds $50, the receiving activity shall prepare Standard Form 361, Transportation Discrepancy Report, as soon as possible, but not later than 45 calendar days after receipt of the shipment or discovery of the discrepancy. Every effort shall be made to reconcile overages or shortages within 15 calendar days after discovery. Standard Form 361 (SF 361) is approved by the Office of Management and Budget under OMB reports control number 3090-0093. Guidelines for the preparation of SF 361 are contained in Figure 2.
(2) Pilferage, theft, or loss, regardless of dollar value, occurring in shipment of narcotics or other controlled substances (as identified in 21 CFR 1308.11 through 1308.15), shall be reported by telephone within 24 hours after discovery to the agency or activity responsible for the shipment, and SF 361 shall be prepared and distributed immediately to any addressees as may be required by the agency's regulations. In addition, persons who are registered with the Drug Enforcement Administration (DEA) pursuant to 21 CFR Part 1301 are required to complete DEA Form 106, Report of Theft of Loss of Controlled Substances, as prescribed in 21 CFR 1301.74(c).
(3) Pilferage, theft, of loss regardless of dollar value, occurring in a shipment of ammunition, explosives, or other hazardous articles (as identified in 49 CFR Part 172) shall be reported by telephone within 24 hours after discovery to the agency or activity responsible for the shipment. In addition, SF 361 shall be prepared and distributed immediately to any addressees as may be required by the agency's regulations.
(4) Pilferage, theft, or loss, regardless of dollar value, occurring in a shipment of (1) security classified material, (2) protected (sensitive) material; e.g., small arms, which are highly pilferable and have a ready use during civil disturbances or a sale potential in illicit markets, or (3) protected (controlled) material; e.g., money, negotiable instruments, precious metals, or alcoholic beverages, shall be reported by telephone within 24 hours after discovery to the agency responsible for the shipment. In addition, a written discrepancy report shall be prepared and distributed immediately.
E. Notice of Visible Loss, Damage, or Shortage.
(1) Usually, it is sufficient to notify the last line-haul or delivering carrier of a shipment discrepancy by annotating the carrier's delivery receipt. This notation shall be entered on the USGS copy of the delivery receipt. When the carrier's delivery receipt is not available at the time of delivery of the shipment, notification shall be made within 24 hours by telephone to the nearest office of the delivering carrier to provide the carrier an opportunity if desired, to verify the loss, damage, or shortage. In every instance of damage or shortage, (except in those instances where the total amount of damage, shortage, or the value of repairs does not exceed $50) the agency shall notify the carrier on SF 361 within 5 calendar days of receipt of the shipment. The carrier shall be invited to perform an inspection. If the carrier waives the opportunity to perform an inspection, the Transportation Officer or employee receiving the shipment, shall make a written record of the waiver, including the date the request for inspection was made and name of the carrier representative who was contacted and waived inspection.
(2) If the damaged property is of a perishable nature or is in such a condition as to be potentially injurious to life, health, or property, prompt notification to the carrier shall be made by telephone and confirmed in writing. If the carrier fails to perform a timely inspection and to participate in the disposition proceedings, necessary steps shall be taken to dispose of the property in a manner which will mitigate the loss to carrier and avoid injury to other property of persons.
(3) In the instance of a domestic shipment, if the lost or damaged shipment involves nonperishable material, the property shall be held for a reasonable time (usually 5 working days after notification) to allow the carrier time to complete inspection.
(4) When an entire shipment is lost, the consignee shall notify the origin carrier by telephone and use SF 361 to confirm the notification.
F. Notice of Concealed Loss, Damage, or Shortage.
(1) Domestic Shipments. When loss, damage, or shortage that was not apparent at the time of delivery is subsequently discovered when the packages are opened, the delivering carrier shall be notified by telephone and requested to inspect the property involved. Unless there are extenuating circumstances, the notification and request for inspection shall be made by telephone not later than 15 calendar days from the date of receipt of the shipment and confirmed on SF 361. The SF 361 shall include the date the telephone request for inspection was made and the name of the carrier's representative who was contacted. A copy of the carrier's inspection report shall be requested for use in determining liability or preparing a claim. If the carrier fails to make an inspection within a reasonable time (5 calendar days), or if the carrier waives the opportunity to perform an inspection, the carrier shall furnish an oral or written waiver as provided in SF 361.
(2) International Shipments. When loss, damage, or shortage that was not apparent at the time of removal of the property from the carrier's possession is subsequently discovered when the packages are opened, the carrier shall be notified promptly in writing using SF 361. When an ocean carrier is involved, the written complaint shall be given to the carrier or its agency at the port of discharge within 3 calendar days of delivery (46 U.S.C. 1303(6). When an international air carrier is involved, a written complaint to the carrier shall be given within 14 calendar days of receipt of the property (Article 26 of the Warsaw Convention, 49 Stat. 3020, as interpreted and applied by the Civil Aeronautics Board in its Order 78-8-10 of August 3, 1978). Written notice to ocean and international air carriers shall indicate a reasonable period of time for inspecting concealed loss or damage.
G. Disposition of Overages and Astray or Misconsigned Shipments.
(1) When the number of packages offered for delivery is more than that shown on the applicable bill of lading or other transportation document and when all packages are marked for the consignee, the overages shall be accepted. The consignee shall attempt to reconcile overages and astray freight with corresponding shortages associated with other shipments received at that activity.
(2) If excess freight on one bill of lading is identical with a reported shortage on another bill of lading, the excess or overage shall be used to offset the reported shortage. If excess freight cannot be identified or used to offset other shortages within 7 calendar days after date of discovery, the consignee shall use SF 361 to request disposition instructions from the consignor or shipper and shall convey these instructions to the delivering carrier.
(3) If a carrier attempts to deliver a shipment containing packages which are marked for another consignee or which cannot otherwise be identified, the misdirected or astray packages shall not be accepted.
5. Determining Liability for Discrepancies.
A. Transportation for Account of the Supplier. When the transportation is performed by the carrier for the supplier rather than for the Government (when the goods are purchased f.o.b. destination), determination of liability for discrepancies in shipment will be resolved between the carrier and the supplier. However, in such instances the Government receiving activity shall make accurate notations of discrepancies on the carrier's delivery receipt or freight bill, and shall use SF 361 to furnish a report of the discrepancies to the supplier, or to the USGS contracting officer, to assist the supplier in resolving the discrepancies. The report shall include supporting documents; i.e., a copy of the annotated delivery receipt, photos, inspection report, or written waiver.
B. Transportation for Account of the Government. Determination of liability for discrepancies shall be the responsibility of the Government agency paying the transportation charges (a) in all instances where a shipment is made on a GBL, and (b) in other instances where the USGS assumes the risk of loss and damage at origin; e.g., when property is purchased f.o.b. origin, freight prepaid. While no precise formula can be prescribed for agencies to follow in determining whether liability for loss and damage rests with the carrier, the shipper, or a third party, an analysis shall be made of all the pertinent factors and circumstances involved, including, when appropriate, consideration of the following:
(1) Type and adequacy of the packing and packaging.
(2) Adequacy of marking, including precautionary markings for fragile or dangerous cargo.
(3) Condition of the package, including any indications of rough handling or pilferage.
(4) In case of load lots:
(a) Condition of vehicle, whether dirty, contaminated, unsafe, structurally defective, appropriate type.
(b) Identification and condition of seals on conveyances and by whom applied.
(c) Manner of loading, stowing, blocking, and bracing.
(d) Determination as to whether loading was performed by shipper of carrier.
(5) Tally records and how compiled.
(6) Photographic evidence.
(7) Expert or professional appraisals.
6. Carrier Determined Liable for Damage.
A. Processing Claims Against Carriers. When the transportation is for the account of the Government and when it is determined that the carrier is responsible for loss or damage to the shipment, a claim shall be prepared on Standard Form 362, U.S. Government Freight Loss/Damage Claim, and forwarded in duplicate to the appropriate carrier with the necessary supporting documents; e.g., delivery receipts, photographs, and inspection report.
(1) Claims Against Domestic Carriers. Formal Claims (SF 362 with supporting documents) shall be filed with domestic carriers within the time limits noted in SM 410.5.7.
Rail carriers, motor carriers, domestic for warders, and other carries subject to the Interstate Commerce Act are required under 49 CFR Subpart 1005.3 to acknowledge receipt of a formal claim in writing to the claimant within 30 days after receipt. In addition, 49 CFR 1005.3 requires carriers which receive a written claim for loss or damage to property transported to pay, decline, or make a firm compromise settlement in writing to the claimant within 120 days after receipt of the claim by the carriers. If the claim cannot be processed or disposed of within the initial 120 days, the carrier shall advise the claimant in writing of the status of the claim and the reason for the delay in making final disposition.(41 CFR 101-40.711-1(a))
(2) When any carrier fails to settle a loss or damage claim within a reasonable period of time, agencies shall collect the claim by setoff action; i.e., withholding payments from amounts otherwise due and payable to the carrier for transportation and related services. Earlier collection by setoff may be made if it is known that a carrier is involved in a bankruptcy, insolvency, or relocation proceeding, and it is clearly in the Government's interest to do so (4 CFR Parts 102 through 105).
(3) Claims Against Ocean and International Air Carriers (See 41 CFR 101-40.711-2)
B. The appropriate carrier against which the claim shall be filed is (1) Usually the destination line-haul carrier (not the drayage company or switching carrier performing the delivery service for the destination line-haul carrier) in instances of domestic freight shipments made on Standard Form 1103 (GBL) or a commercial bill of lading or subject to the terms and conditions of the Government bill of lading. (2) Usually the origin carrier on ocean or international air shipments. When it is conclusively known on which carrier's line the loss or damage occurred, the claim may be filed against that carrier. When no part of the shipment has been delivered, the claim would normally be filed against the carrier which accepted the shipment.
7. Time Limitations for Filing Claims. The USGS shall take prompt action to recover amounts due the organization as a result of loss, damage, or shortage, in accordance with time limitations established by the bill of lading or other contracts of carriage, or by statute.
A. Domestic Shipments.
(1) Motor and Rail. Pursuant to 49 U.S.C. 11707(e), commercial bills of lading issued by rail and motor carriers specify that written claim be made upon the carrier within 9 months after delivery of property damaged or within 9 months following the time delivery should have been made, and that suit shall be instituted within 2 years from the date the carrier or its agent notifies the claimant in writing that the specified claim is disallowed in whole or in part. (41 CFR 101-40.709(a))
(2) Domestic Air Shipments. Claims for loss and damage to shipments moving by domestic air carriers shall be filed within the limits prescribed on individual carrier's air waybills.
B. Ocean Shipments. The Carriage of Goods Sea Act (46 U.S.C. 1303(6), as amended) imposes a 1-year limitation for bringing court action against ocean carriers for loss or damage.
C. International Air Shipments. Complaints of loss or damage shall be submitted in writing to the international air carrier within the following time limits set by Article 26 of the Warsaw Convention (49 Stat.3020, as amended):
(1) Claims for visible damage to goods must be filed as soon as possible following discovery of the damage but within 14 days from receipt of goods.
(2) Claims for other damage to goods must be filed within 14 days from the receipt of goods.
(3) Claims for nondelivery of goods must be filed within 120 days from the date of issuance of the air waybill.
(4) A 2-year limitation is imposed by Article 29 of the Warsaw Convention (49 Stat. 3021) for bringing court action against the carrier for loss or damage to international shipments.