Breakage in transit: who records it and when

Ceramics and glass are the products most easily damaged in transport. When a broken carton turns up on a pallet that has arrived at the warehouse, the real question is not "how many are broken?" but "whose record does this breakage go in, and when?" Without a photograph, a report and a separate item at receipt, broken goods get lost between supplier, carrier and warehouse, and what remains is an item that sits in stock but does not really exist. Here are the steps for recording damage at the right time with the right document.

When does damage show up?

Damage appears at two different times:

• Visible damage: noticed at once during unloading, when a pallet has toppled, a carton is crushed or the stretch film is torn.
• Hidden damage: the carton looks sound, but a tile is broken when it is opened. It usually comes to light at the first sale or during a count.

The second is much harder to prove; once the delivery has been signed for, there is an argument about whether the damage happened in transport or in the warehouse.

Steps at receipt

1. Before unloading, photograph the pallets and the load: toppling, wetting, torn packaging.
2. Visible damage is written on the delivery document when the driver's signature is taken.
3. Corner cartons and a few randomly chosen pallets are opened and checked the same day.
4. Broken cartons and tiles go to a separate zone and are photographed, with the carton label (lot, shade) in the picture.
5. A report is prepared: date, supplier, vehicle plate, document number, item, lot, broken quantity, photo reference, signatures.

How it shows in the record

The sound quantity goes into normal stock. The broken quantity is kept as a separate item or status, "damaged" or "awaiting return", and is not counted as sellable stock until the outcome with the supplier is settled. Depending on the outcome, a return or credit note, or a scrap entry, is made. If the report states m² and value as well as the number of cartons, the claim to the supplier and the accounting entry come from the same figure, and the same report explains the "shortage" line that would otherwise appear in the count.

Leaving broken goods in normal stock creates two problems: sellable stock is overstated, and the count shows a "shortage" because the broken goods are not on the shelf.

Who is responsible depends on the delivery terms in your contract and the carrier's conditions; the notification periods come from there too. Learn them, write them on the goods-receipt form, and consult your legal adviser or logistics lead for detail.

Worked example

An illustrative shipment: 20 pallets × 40 cartons = 800 cartons. At 1.44 m² per carton, 800 × 1.44 = 1,152 m². At unloading, 14 cartons are broken and recorded straight away: 14 × 1.44 = 20.16 m², or 14 ÷ 800 = 1.75 per cent. Next day, while pallets are being opened, 6 more broken cartons are found: 6 × 1.44 = 8.64 m². The total is 20 cartons, 28.8 m².

Say the purchase price is 9.5 USD per m². The 20.16 m² recorded on day one are worth 20.16 × 9.5 = 191.52 USD; the 8.64 m² found next day, 8.64 × 9.5 = 82.08 USD. The total is 191.52 + 82.08 = 273.6 USD (the same as 28.8 × 9.5).

The difference is this: the first 14 cartons were written down at delivery, so there is the driver's signature and a photograph. The next 6 appeared after the signature, so the evidence is weaker; the supplier or carrier may treat it as damage that happened outside transport. Part of the amount therefore stays open to dispute.

Catching hidden damage

• On unloading day a few random pallets are opened and checked inside; the number depends on how many pallets there are.
• A pallet is opened if its stretch film, the carton strapping or the weight balance looks suspicious.
• When damage is noticed, the report is written at once; "we'll look later" weakens the evidence.
• Every damage report is matched with the variance table at the next count.

In short

Breakage in transit does not disappear if it is recorded in time; it becomes a claim or a scrap entry. During the count StockSystem writes broken and damaged cartons on a separate line, compares them with the balance in the records and shows the likely cause line by line in the variance table.