Maximizing Liability Protection: Essential Tips for Documenting Exceptions on Military Shipments

by ROBERT WRIGHT, Suddath Government Services

In today’s military moving program, there are several different parties and programs that shipments can transfer to and from prior to being delivered back to the customer. When a shipment transfers to another party or program, liability that was not previously documented also transfers.

Understanding how liabilities transfers are more important than ever especially with the government’s recent cancellation of the Global Household Goods Contract (GHC), there has been an influx of shipments transferring into the Defense Personal Property Program (DP3). However, this transfer of liability also occurs with shipments moving to and from other parties and programs such as Non-Temporary Storage (NTS) or the Direct Procurement Method (DPM). The government universally applies the “last handler rule,” which means that liability defaults to the last party that had custody of the items.

The surefire way a moving company can protect itself against liability is to document loss and/or damage prior to accepting custody of the shipment, which is done via a rider or exception to inventory.

To maximize the effectiveness of the rider, I recommend that companies follow these tips:

1.        Prioritize receipt of all items on inventory: Missing items tend to be the most expensive claimed items. Therefore, if the inventory sticker is missing or does not match the inventory description, notate on the rider accordingly. Doing so protects against liability for items claimed missing due to incorrect inventory number on the item or if an item without a number matches the inventory description but ends up not belonging to that customer.

2.       Be specific: It’s important to note that there is a legal doctrine which dictates that vague language in an agreement is interpreted against the party that wrote it. Exceptions which are “blanketed” (e.g., SC – all over / R – 9’s) are often not defensible therefore not considered. Notating the exact damage and location offers far more protection than leaving it open-ended. When items arrive disassembled but are inventoried as one item, specify exactly how many items were received. “When in doubt, write it out.” There is no requirement to use the damage condition and location codes, and more detail is better!

3.       Prioritize the most effective damage conditions: Pictures of damaged items is without question the most effective method to document damages, However, written exceptions for broken, cracked, and dented items are far more effective at protecting against unwarranted liability. Inventories state that exceptions should be damage conditions that are in excess of normal wear therefore conditions such as scratched or rubbed could be easily misinterpreted as such therefore require more detail. (Vague and less effective conditions are soiled, loose, and contents unknown/mechanical condition unknown.)

4.       Pay close attention to appliances, large furniture, and high-value items: These items tend to be the most expensive items the customer owns and are therefore much more likely to be the first items claimed if damaged.

5.       Reference the hardware: Military moves allow hardware to be packed into a parts box or affixed to the item. If no parts box is used, it is assumed that the hardware is affixed to disassembled items. If not, it needs to be notated.

In conclusion, it is essential to ensure that military shipments maintain the same inventory documentation from origin to destination, regardless of the transportation program used. This consistency is crucial for verifying delivery and upholding the legal chain of custody. Every rider or exception sheet must reference the original shipment inventory to ensure accuracy and accountability throughout the entire process.