Now that the busy season is winding down, it’s time to look at some important paperwork issues that may have fallen to the bottom-of-the-pile while you were focused on handling your customer’s needs.

The SIT conversion process is important because if you don’t have the correct paperwork on file, your insurance may not provide coverage in case of a loss.

Besides insurance, there are a few other reasons that a Bill of Lading stapled to inventory sheets (instead of a real Warehouse Receipt) might get you into trouble:

  • Without the proper Warehouse Receipt, you are legally unable to foreclose on unpaid storage lots and auction them to cover your unpaid charges;
  • You might not be able legally collect storage fees once the SIT period has expired unless you have a Warehouse Receipt and/or Storage Contract.
  • If the shipment came into your warehouse under a van line Bill of Lading, how do you advise the customer of the change? What is the van line’s continuing responsibility?

What should you do?

  • You should have a standard letter (or email) and procedure in place advising the customer of the change, confirming the same valuation option, presenting the new Warehouse Receipt/Storage Contract, and billing for the new monthly storage charge.
  • If there was no set delivery-out date when the shipment came into your warehouse, convert to permanent storage as soon as possible.
  • When there is a designated delivery-out date, confirm with customer at least 30 days prior.

See some sample forms at at the bottom of the educational material section. Contact me with any questions.