OEMs, such as Suzlon, have a contracts department to handle their many details. “You want to form relationships with carriers,” says the company’s Logistics Director Gary Kowaleski. One route to a good relationship is with a contract that leaves little to no interpretation. He suggests at least these items for a shipping contract:
• Description and quantity of components.
• Dimensions and weights for each component.
• Define the driver’s free time.
• Scheduling: What will be delivered, to where, and when.
• Detention rate by component. Detention applies when meeting on-time criteria and when it takes excess time (longer than x hours) to load or unload a trailer. For instance, a nacelle trailer will command a higher rate of detention because it costs more to operate than, say, a blade trailer.
• Billing: How do you bill? On a weekly or monthly basis, or batch billing?
• Payment and payment terms
• Lien waiver form. It states that if payment is made, the carrier can not apply a lien against the goods. Basically, the carrier holds title to the cargo until it is released.
• Cargo value
• Cargo security
• Arbitration. When two specialized companies have a dispute, they do not want a judge unfamiliar with the industry to provide a ruling. Also, a costly civil and statutory proceeding takes time. Therefore, an independent arbitrator is hired to hear both sides and make a ruling.
• Road surveys: Identify the route, low bridges, high-voltage wires, and other hazards
• Provide a full time on site coordinator and define their role in detail.
• Damage claims: Equipment is occasionally damaged in transport so discuss the process ahead of time so the transport company knows what it will be held accountable for.
Filed Under: Policy
