Storage Valuation

There are only a few state household goods regulatory agencies that make any reference to storage.  While several state rules or tariffs include SIT (Storage-in-Transit), only a few include valuation provisions for SIT.  What should you do to avoid problems with storage claims?

For shipments coming into your warehouse under your Bill of Lading:

  • If the destination is your warehouse, issue a warehouse receipt or storage contract right away.
  • If the shipment is SIT, but exceeds your SIT period, issue a warehouse receipt or storage contract as soon as the SIT period expires.
  • Always have an inventory for shipments going into permanent storage.
  • A Bill of Lading with inventory sheets attached IS NOT a warehouse receipt or storage contract.
  • Valuation on your inbound Bill of Lading should be the same for permanent storage – same basis ($0.60 per pound, ACV or Full Value Protection), same declared dollar amount.  The cost of valuation, however, is generally per month.

For shipment coming into your warehouse under some other company’s Bill of Lading:

  • Execute a warehouse receipt or storage contract with the owner of the property as soon as possible.  As part of this process you should describe the valuation options available and the estimated monthly additional cost. 
  • Remind the customer that whatever valuation protection was provided on that other company’s Bill of Lading does not transfer to you – your options and costs may be different.
  • You should maintain a written record of the customer’s choice of valuation options.

Even though regulations may be different for transit and permanent storage, most insurance companies will look at your paperwork – what did you offer the customer and what level of protection did the customer agree to. 

If you can’t prove that the storage customer declined additional valuation protection, your insurance company may settle claims on replacement cost – for which you have not received any compensation.

Courtesy of MOVE-PAK CONSULTING – or 213-760-7444.