CARE Food Manual (CARE , 1998, 355 p.) Chapter 6 - Port (introduction...) I. Arrival and Discharge A. Prior to Arrival B. Arrival at Port C. Cargo Discharge (introduction...) 1. Lighterage 2. Types of Cargo Packaging a. Bulk Cargo b. Breakbulk c. Containerized Cargo II. Inspection and Evaluation (introduction...) A. Damages (introduction...) 1. Inadequate Packaging 2. Marine Damage 3. Damages During Discharge at the Port 4. Sweepings 5. Infestation B. Inspection for Weight (introduction...) 1. Port Weighing 2. Sample Weights a. Breakbulk Shipments b. Bulk Cargo c. Sampling Guidance C. Excess Landings (introduction...) 1. Acceptance of Food 2. Notice to CARE International and Donors III. Independent Discharge Surveys (introduction...) A. Time and Place of the Discharge Survey B. Format and Content of Discharge Survey Reports (introduction...) 1. Data Regarding the Shipment 2. Dates and Times 3. Amount and Condition of Food 4. Narrative Analysis 5. Physical Counts/Stroke Tallies 6. Daily Discharge Reports 7. List of Persons 8. Translations IV. Other Documents A. Host Country Health Certification B. Ship's Out-Turn Report C. Port Tallies and Port Out-Turn Report D. Other Official Port Records V. Port Fees VI. Port Storage (introduction...) A. Problems of Port Storage B. General Guidance for Port Storage VII. Forwarding Food From Port Warehouse A. Dispatch Reports from the Port to the Country Office 1. Daily Dispatch Reports 2. Through Bill of Lading 3. Weekly Inventory and Dispatch Status Reports B. Delivery Survey VIII. Recordkeeping for Port Activities (introduction...) A. Shipment Ledgers B. Shipment File C. Warehouse Inventory Accounting at the Port

CARE Food Manual (CARE , 1998, 355 p.)

Chapter 6 - Port

Figure

I. Arrival and Discharge

A. Prior to Arrival

CARE's clearing and forwarding agents and port/customs officers must make certain that all necessary documents and authorizations have been filed and approved by government ministries to assure as smooth a discharge as possible. See Agreements and Contracts for information on certificates and clearances that may be required.

If food arrives before final approvals are given, the clearing and forwarding agent and CARE port officer may provide a letter of guarantee to the shipping agent and ship's captain, countersigned by authorized officials of the government, stating that the shipment may be discharged.

B. Arrival at Port

Once a ship arrives in port, the shipping company presents the ship's cargo manifest to port authorities for authorization to unload. The ship is then either directed to a port berth for clearance or, if the port is too shallow, food is off-loaded onto smaller vessels called lighters. Before the food is off-loaded, CARE, its counterpart or representative must insure that the ship's hatches are inspected and the ship captain's log reviewed to ascertain the condition of the food and weather conditions en route. Many countries require a representative from the Ministry of Health or other government agency to make a visual inspection and approve the discharge of the food.

If CARE or its counterpart takes custody and control of the food at port, the independent surveyor must be available prior to the unloading of the cargo. The surveyor must be allowed to inspect the hold to determine the condition of the food. If for any reason a shipping company prohibits inspection of food, the country office should immediately notify the CARE USA Procurement Office for U.S. food, or the local representative or Brussels office of Euronaid for European Union Food for non-emergency programs or ECHO for emergency programs. For other donors, notify their local representatives. In all cases, country offices should notify the CARE International member's headquarters to request their assistance. When there are problems with shipping companies, the CARE USA Procurement Office should be copied on all correspondence relating to non-U.S. donors.

C. Cargo Discharge

To insure that food is properly examined, losses are identified and the party responsible for the loss is determined, the independent surveyor, a shipping company agent and a customs official must be available simultaneously to witness the discharge of the food from the ship.

Internal Control

CARE personnel must insure that discharge of food from the ship does not take place if an independent surveyor is not present. If so, the responsibility for any losses may be placed on CARE.

In addition to the three people on site examining the cargo, a CARE or counterpart employee and a clearing and forwarding agent should be at the port to oversee the actual discharge. Their responsibilities are to:

· Examine the condition of the vessel and food prior to discharge from the ship and witness the discharge of food to the dock and/or destuffing of containers

· Compare the amount of food on the bill of lading to the amount of food received in good condition, which is also being documented by the independent surveyor.

Whether the survey is done at port or at a CARE or counterpart warehouse, if food is shipped on a Through Bill of Lading, the agent of the shipping company must witness the discharge and sign the Independent Survey Report.

If the containers are destuffed at port or if customs inspects the food at port, a shipping company agent must be present when the container seals are broken. The customs representative must be present at the time the food is taken from the container to witness the physical count.

1. Lighterage

Lighterage is the method of discharging cargo from a ship onto a smaller, lighter vessel, which carries the cargo to the docks. Because the cargo has to be handled an additional time, the possibility of damage and loss is increased. Lighterage should be avoided whenever possible. The responsibility for losses when using lighters is determined by local laws and customs of the port. Generally, the organization requesting and paying for the lighters is responsible for related losses. If CARE requests the lighter, all losses resulting from its use are CARE's responsibility.

2. Types of Cargo Packaging

a. Bulk Cargo

Food shipped in bulk (not pre-packaged in the donor country) will either be bagged in the ship's hold and unloaded to the dock, or will be transferred to silo storage by vacuum equipment and rebagged by machine. When food is received in bulk, the shipment will also include a predetermined number of bags to package the food at the port after discharge from the ship.

When food is bagged by machine, country offices and counterparts, together with clearing and forwarding agents, independent surveyors, shipping company representatives and port officials, must insure that the bagging and calibrating equipment is in good working order and that port personnel accurately measure how much food goes into each bag.

Internal Control

Anytime food is bagged, country offices should instruct independent surveyors to pay close attention to the bagging process to assure standard weight.

b. Breakbulk

Breakbulk refers to food packed in individual bags or containers. Breakbulk cargo is unloaded from the ship by crane to the dock or by manual labor directly onto trucks or railcars for direct dispatch to CARE or its counterpart's warehouses, or moved to port storage (transit sheds) for later dispatch.

c. Containerized Cargo

Containerized cargo will either be destuffed at port or will go to a receiving warehouse for inspection and storage. A seal is placed on the container in the country of export so that no entry is possible without being detected. The seal numbers are recorded by container and accompany the Bill of Lading.

When containers are discharged from a vessel, the independent surveyor must tally and inspect the seal numbers during the unloading to insure the original seals have not been removed or tampered with. If the original seals are intact, the cargo is said to have traveled under "clear seal security."

If container seals appear broken or it appears there have been unauthorized entries into containers at the port, local laws may require that an official be present for the opening of the container. The local official should be asked to prepare a report which documents the investigation. A copy of the report should be retained in the shipment file.

Whenever there is evidence of tampering with seals or unlawful entry to containers, country offices must notify, in writing, port and customs officials, the local police, local donor representatives, the Procurement Section of CARE USA Headquarters, and the CARE International member who assisted the country office in procuring the food.

II. Inspection and Evaluation

A surveyor hired by CARE is directly responsible for producing the official inspection report for the discharge of food from a ship. CARE staff, counterparts, or a clearing and forwarding agent should also make frequent visits during discharge, delivery, and packaging of the food to observe the quantity and condition of the food, monitor the extent of marine losses, determine the shipping company's responsibilities, and be able to report losses accurately to the donor. See Losses and Claims for more specific information on marine losses.

A. Damages

Independent survey reports should cover the following causes of food damage:

1. Inadequate Packaging

Damage may result from inadequate packaging of the food in the country of origin and not because of improper handling during shipping or discharge. Whenever a loss due to inadequate packaging is discovered, the independent survey report should document the following:

· Type of food and package size

· Description of packaging deficiencies, e.g., material or seals to close packages are weak. Include any results of an independent analysis of the packages in the survey report.

· Contract identification number

· Bag/container identification number

· Number of packages damaged and the total bill of lading quantity

· Ship name, discharge date and location

· Current location and quantity of food

· If samples are appropriate, draw a one kilogram sample from each unsatisfactory sub-lot of ship's cargo.

Country Example - CARE India

CARE India had often received PL 480 Title II shipments of corn soya blend (CSB) that were damaged. They determined that faulty packaging was largely responsible. USAID, USDA, and CARE USA Headquarters were repeatedly notified. While it took the donors time to complete an investigation and redesign the bags, CARE India's persistence led to an important change in the design of CSB bags. If the packaging problem is recurrent, the country office must prepare a summary describing the nature and history of the problem and send it to the CARE-International country that procured the food, the CARE USA Procurement Office, and Food Security Unit. Donors will be asked to look into this problem and redesign packages if necessary.

2. Marine Damage

Type of Damage	Possible Origin
Mold/sweat	Damp storage conditions Moisture due to condensation Inadequate and/or improper ventilation
Infestation	Infestation present before the food was loaded onto the ship Improper segregation of infested food Holds not thoroughly cleaned and fumigated before loading
Sea water damage	Hatches not properly secured during passage through rough seas; water able to enter into the compartments Leak in the steel plates allowing entry of water
Fresh water damages	Hatches not properly closed, permitting the entry of water during rains
Cut/torn containers	Improper handling while loading Food stacked along side pipes, rails and crates Improper handling when the food is discharged from the holds
Contamination	Food loaded next to chemicals, insecticides, or other hazardous materials

3. Damages During Discharge at the Port

Time of inspection	Common Causes of Damage	What to look for
Before discharge from ship	Poor loading supervision in donor country, resulting in broken bags Moisture trapped in the hold, condensing the cargo, particularly in lash barges and breakbulk ships in transit from cold to warm climates. Mold as a result of wet bags	Quality of stowage on board the ship Condition of cargo in the hold (mold, broken bags, etc.) Condition of packaging
During discharge from ship to port storage area	Dragging a pallet across the hold Overloading pallets Allowing rope slings to cut into bags stacked on a pallet Overloading material handling carts Use of hooks Theft	Quality of stevedore labor Quality of discharge techniques Acceptability of dock and storage area for food Discharge customs of the port/country Accuracy of reports controlling the movement of the food from port to warehouse Port security, including limited access to the storage area Inordinate delays in moving the food out of the port area Storage of food with incompatible goods, such as grains stored next to gasoline
During repackaging at the dock or port storage area	Infestation Shortweight	Adequate labor, packaging, and equipment available for reconstitution Proper segregation of damaged food Timeliness of fitness certifications Proper inventory adjustment authorizations

4. Sweepings

Sweepings are spillages collected in the ship's holds, collected from slack/torn bags, or collected after repacking. The independent surveyor must determine the total weight of the sweepings, the number of units that can be reconstituted (e.g., how many 50 kg bags), how much is lost and how much is to be declared unfit for human consumption. Losses from sweepings should be included in the survey report and treated as marine losses. Spillages that have occurred in port transit sheds or other interior warehouse while in CARE's possession should be treated as internal losses.

5. Infestation

A sample of bags should be examined for possible insect infestations during the survey (see chart on Sampling Guidance below). If the sample shows the shipment to be infested, the survey report documents the inspector's health certificates, the amount of the original shipment, the amount able to be repackaged, and the amount that may be unfit.

B. Inspection for Weight

If there is evidence during discharge that bags or containers are not standard weight (short or excess), CARE or its counterpart must insure that bags are not dispatched from the port until food is placed in standard weight packages. CARE, its counterpart, the shipping company, clearing and forwarding agent, independent surveyor and port authorities must set aside the bags and containers for later repackaging. Any losses would be the responsibility of the shipping company. If circumstances require that short-weight bags be dispatched, the quantity of bags and reasons for dispatch must be stated on the dispatch waybill. The surveyor's report should include a narrative stating where, when, and how short-weight losses may have occurred. (See Independent Survey Reports below.)

1. Port Weighing

Ports often require that bags be weighed during unloading to limit their liability. They then issue an "official weight" based on their calculations. Port documents often are not completed with a high degree of accuracy, and/or the port authorities do not release these reports to CARE, its counterpart or the surveyor. The presence of CARE staff and independent surveyors may insure greater accuracy of the port reports. CARE or its agent should request, in writing, copies of all port documents for claims purposes. Country offices must keep files of all requests to ports, even if the port does not respond, to show auditors and donors that efforts were made to obtain the information.

2. Sample Weights

a. Breakbulk Shipments

A sample of bags or tins should be weighed at port in the presence of a shipping company representative, the independent surveyor, and CARE, its counterpart or other representative. The sample weight will determine the uniformity of unit weights in the shipment. (See Sampling Guidance below).

Country Office Example - CARE India

For years, underweight oil tins were shipped to CARE India. CARE India did not want the tins sent to MCH centers for fear MCH workers would be accused of stealing the oil if the shortages were discovered during the distribution. Shortweight deliveries impaired CARE's ability to assess the causes of losses and pursue claims. Working closely with the local USAID mission and the Government of India for more than two years, CARE weighed all of the oil shipments, documented the shortweight losses, repackaged all shortweight containers to standard weight and submitted the independent survey reports and reconstitution charges to the donor. On the basis of CARE's detailed documentation and certification by the independent survey company, the donor brought criminal charges against the processing company. Conclusive evidence enabled the donor to file complaints against the processor, and then terminate the contract, thereby eliminating the short-weight problem.

b. Bulk Cargo

Most ports do not have adequate facilities to properly package food to a standard weight. Bags from this source should be monitored closely. Because of lax oversight and faulty bagging equipment, there is a greater incidence of short-weight deliveries.

c. Sampling Guidance

A simple method of sampling bags or containers recommended by the Food and Agricultural Organization (FAO) and adapted for this manual is the following:

Sampling Guidance

Number of units	Number of units in the sample
Up to 10	Each unit
11- 100	10 units drawn at random
More than 100	The square root (approximately) of the total number drawn at random according to a suitable scheme.

Adapted from Table 10, Food Storage Manual, World Food Programme, 1992. Note that the sampling fraction varies with the population.

If there appears to be wide variance in the individual unit weights, a larger sample should be weighed and the average weight recorded in the independent survey report. The country office should work closely with the local representative of the donor, and notify CARE USA Headquarters Procurement Office and Food Security Unit of any unusual circumstances.

The range of tolerance must be negotiated with the donor. In some cases, donors establish weight tolerances for shipments from their countries. The Procurement Office in CARE USA Headquarters should advise country offices of acceptable weight variances for all U.S. Government donated food. Country offices should obtain the same information from non-U.S. donors.

The tolerance range should be known only by the person authorizing repackaging (i.e., the port officer) to avoid collusion among those handling the food. All packages that do not fall within the tolerance range permitted by the donor must be rebagged before they are transported to warehouses or centers.

Internal Control

If the sample shows total weights of the shipment outside of the acceptable range of tolerance, the donor must be immediately notified.

C. Excess Landings

Occasionally, a ship will discharge more food than stated on the Bill of Lading.

1. Acceptance of Food

A country office may accept the food if it receives the following, in writing, from the shipping company:

· The shipping company offers the food to CARE.
· The shipping company accepts responsibility for any storage charges levied on the excess food.
· A Health Authority certifies that the food is fit for human consumption.
· The shipping company agrees to pay any customs duty levied against the excess food.

2. Notice to CARE International and Donors

The country office should notify the local representative of the donor, in writing, about the excess food and CARE's plans to use it. The CARE International headquarters office that assisted the country office in procuring the food should be notified of the following:

· Date and time of first notification of the excess food
· Actions taken to obtain the excess food
· Date and place food made available to CARE
· Condition of the food
· Disposition of the food.

III. Independent Discharge Surveys

An independent surveyor is a disinterested third party who observes the discharge of food from a ship at the port. The surveyor prepares a report called a discharge (ex-tackle) survey which documents the condition of the food, amount delivered against the bill of lading, and the cause and nature of any shortages or damages to the food while it is in the control of the shipping company.

When there is a Through Bill of Lading, an independent surveyor carries out the survey at the time the shipping company transfers custody of the food to CARE or its counterpart at a designated warehouse.

An independent surveyor should also be used when food has been stored in a port warehouse for later dispatch to a CARE or a counterpart warehouse or directly to a distribution site. In this case the survey report is called a Delivery Survey Report. Delivery surveys are primarily used to fix responsibility for losses during the period of time food is in the custody of the port and in transit to an inland warehouse.

The surveyor must know how to insure that food moves through the port with the fewest possible losses and, when losses do occur, what to include in a survey report in order to substantiate a claim against a shipping company or port.

If an independent surveyor cannot be located or if there is reason to question the integrity or competency of a surveyor in the area, the country office must consult with the donor to determine how to document marine or port storage losses. Any agreements between CARE and the donor should be in writing, and the country office should immediately inform CARE-USA Headquarters Procurement Office of all arrangements.

In addition to ex-tackle and dispatch surveys, some surveyors can also perform clearing and forwarding activities. Some even have lab facilities to test food suspected of being unfit for human consumption. The types and quality of services offered by surveyors must be examined by each country office and contracts must be drawn up detailing the specific responsibilities expected of the surveying company.

A. Time and Place of the Discharge Survey

In order to assign responsibility for losses while the food is in the custody of the shipping company, the surveyor must examine the food while stowed in the hatches of the ship during discharge and while it is being discharged from the vessel to the dock.

If food is off-loaded from the carrier onto a lighter at the request of the shipping company, the survey would take place at the time the food is discharged from the lighter to the dock. If CARE has requested the lighter, the survey report should be prepared when the food is discharged from the ship into the lighter. If food is loaded directly from the vessel's hold onto trucks or railcars for transport directly to CARE or counterpart warehouses, the survey must take place at the time of loading onto the vehicles.

B. Format and Content of Discharge Survey Reports

The format for the ex-tackle survey report should be developed by the surveyor, CARE, and the counterpart. If necessary, obtain approval of this format from the donors. The length of the report should correspond to the size of the shipment and the extent of the losses incurred. For instance, if the surveyor observed no losses, the report could be quite short. On the other hand, if considerable losses and damages are noted, the surveyor's report should elaborate in full detail. See Attachments for examples of surveys from CARE India and CARE Peru.

At a minimum, the ex-tackle survey reports should include the following information:

1. Data Regarding the Shipment

· Name of vessel
· Bill of Lading quantity in units and kilograms
· Type of food
· Stowage location in the ship
· Port of discharge and number of berth
· Port of registry and flag of vessel
· Bill of Lading number and date
· Contract numbers or shipment numbers on Bill of Lading

2. Dates and Times

· Request for survey
· Vessel arrives
· Vessel begins and ends discharge operations
· Surveyor views the cargo
· Cargo viewed by customs
· Reconstitution of damaged food

3. Amount and Condition of Food

· Quantity of food discharged

Short landed (less than the Bill of Lading quantity)
Excess landed (more than the Bill of Lading quantity)

· Quantity of food not discharged
· Condition and amount

Good
Damaged (wet, infested, contaminated with oil, chemicals or insecticides)
Slack/torn
Infested

· Quantity after reconstitution
· Quantity determined unfit for human consumption
· Quantity destroyed/donated/sold for animal feed
· Total losses
· Average weight (see above Inspection for Weight)

4. Narrative Analysis

The Survey Report should include a narrative analysis of how, when, and where losses occurred, who did what, and when. It should also describe:

· The condition of the food in the hatches, containers, or barges including the condition of the hatches and nature of any damage

· Adverse weather conditions from the ship's log during loading, voyage, and previous ports of call, which may have a bearing on the damage

· Quality of stevedore labor

· Quality of discharging techniques

· Acceptability of dock and storage areas for food

· Quality of stowage onboard the vessel.

The surveyor's opinions should be clearly noted. For example, if the surveyor notes that 119 bags of cargo are wet at discharge, the report should contain information similar to the following:

"Upon discharge of corn soya blend from hatch no. 4 on November 16, 1994, we noted 119 bags (as per the attached tally) discharged wet. These bags were segregated, and samples gave a positive saline reaction. No explanation was given by vessel personnel or is advanced by surveyors as to how the bags became wet. Commodity was analyzed by the Health Authorities on November 18, 1994, and declared unfit for human consumption. Unfitness certificate number 123456 is attached to this report. The remaining contents of 119 bags weighing 2,975 kgs were fit for animal consumption and donated to the XZY pig breeding farm."

or

"Upon discharge of bags of sorghum grits from hatch no. 4 on November 16, 1994, 119 bags were discharged wet, torn and slack. These bags were segregated and tests gave a negative saline reaction. Vessel personnel advised that the bags could have been loaded wet as heavy showers occurred at the loading port of Corpus Christi. In our opinion, the bags became wet because of inadequate dunnage to protect the cargo. Bags were lying on the hatch floor and what little dunnage was available was green and oozing. A representative sample of damaged cargo was drawn by surveyors in the presence of ship's agents on November 16, 1994, and forwarded to the independent chemists, Jones and Jones, for analysis. Their report has yet to be received."

For all containerized shipments, the narrative section of the report must:

· List the container and seal numbers
· Advise whether the containers were in any way damaged
· Document when and where the seals were broken and by whom
· Document new seals put on the containers, by whom, and include a list of new seal numbers.

5. Physical Counts/Stroke Tallies

Surveyors employ tally clerks who are responsible for counting the actual number of bags and containers of food that are discharged in slings or pallets from a ship or the number of bags taken by laborers from port warehouses and put on trucks. Clerks often use a method called stroke/tallies for counting. The tally sheets prepared by clerks are the primary source documents used to prepared the survey reports. See Tally Sheets attached to Survey Reports examples.

The surveyor must arrange for sufficient clerks to be present during a survey to obtain accurate tallies and insure that tally reports are attached to discharge and delivery survey reports.

6. Daily Discharge Reports

Daily discharge reports should be prepared by the surveyor and submitted each day to CARE or counterpart staff assigned to the port area. CARE staff should review the reports upon receipt and note the amount of losses in the shipment. The reports should indicate:

· Sound, damaged bags or infested packages
· Brief description of discharge practices
· Actions initiated to minimize loss/damage.

7. List of Persons

A list of the names of persons who witnessed discharge and/or who can provide information about the date and time the shipping company transferred all responsibility for its cargo to CARE or its counterpart should be included in the survey report.

8. Translations

If survey reports are prepared in a language other than English, there must also be an official English translation of the report, signed by the surveyor. In some countries, reports are written in two columns per page--one column in the official national language and the other in English.

Internal Control

The importance of timely independent documentation cannot be overemphasized, as the survey report fixes responsibility for losses by shipping companies, ports, and transporters. See Losses and Claims for information.

IV. Other Documents

A. Host Country Health Certification

If the host country requires certification of the fitness of imported food or if food is suspected to be unfit for human consumption, CARE or its counterpart must notify the Port Health Officer or other health official promptly, arrange for a health officer or other designated official to analyze the food, and prepare a written report that includes the following information:

· Name of the vessel
· Date of discharge from the vessel
· Date and place of examination
· Amount (bags, cartons, tins) of food examined
· Amount of food fit for human consumption
· Amount of food unfit for human consumption
· Amount of food that can be used as animal feed or that should be destroyed
· Signature and title of person making the determination.

Submit the statement with the survey report to the donor and obtain permission for the disposition of the unfit food. (See Losses and Claims.)

B. Ship's Out-Turn Report

The Ship's Out-Turn Report is prepared by the ship or the ship's agents showing, in their opinion, the quantity and quality of cargo discharged from the vessel. CARE or its counterparts should attempt to obtain copies of these reports and compare them to the independent survey reports. Any discrepancies between the ship's report and the independent survey must be noted and communicated to the surveyor and the ship's agents, who must then attempt to resolve differences.

C. Port Tallies and Port Out-Turn Report

Port Tally Sheets and Port Out-Turn Reports are produced by the Port Authority. The Port Tally Sheets provide an ongoing record of the amount of cargo off-loaded and are the supporting documents for the Port Out-Turn report. The Port Out-Turn report contains a count of the cargo discharged and a description of the condition of the food. Port tallies and reports are often inaccurate and difficult to obtain. However, for auditing and claims purposes, CARE should request in writing copies of the reports.

D. Other Official Port Records

Some ports prepare a complete set of documents, such as inventory reports, showing the quantity and quality of the cargo as it is received by the port in addition to the out-turn reports.

All of these reports often are difficult to obtain and may be inaccurate. They do not substitute for independent survey reports.

V. Port Fees

A variety of costs are involved in the receipt, storage and transshipment of food at the port, including the following:

· Stevedoring fees for discharge of a cargo from ship's hatches to dockside
· Landing charges for movement of cargo from dockside to port storage areas
· Local transport fees for movement of cargo from storage areas to loading onto forwarding transport
· Demurrage
· Surveillance/supervision charges for the inspection of cargo.

A list of all fees charged by the port should be made available by the local Port Authority to CARE, its counterpart, and the clearing and forwarding agent.

Reminder - Demurrage is a penalty fee charged by ports for failure to move cargo out of their warehouses within certain fixed time periods, e.g., seven, fifteen or thirty days. Payment of demurrage must be taken into account by country offices in the development of their port warehouse dispatch plans.

VI. Port Storage

Wherever possible, CARE or its counterparts should avoid storing food at the port. Once cargo is discharged "ex-tackle" from the ship to the dock, custody is transferred to CARE or its counterpart, who from this point forward assume full responsibility for management of the food in country.

A. Problems of Port Storage

The Port Authority is responsible for reserving sufficient covered storage at the port, as well as sufficient dunnage (pallets and tarpaulin) to protect stored food from moisture. However, experience has shown that in countries where CARE has programs:

· Port areas are generally not well maintained and unclean.

· Port areas often lack appropriate equipment and facilities. Warehouses are often in need of repair (e.g., leaking roofs), which can lead to damaged food.

· Port storage space is generally limited and expensive. More lucrative commercial cargo often receives preference over food imported for relief or humanitarian programs.

· Pilferage, siphoning, and destruction of cargo are common in port storage facilities, due to lax security.

· Often food is stacked on the floor, susceptible to damage and infestation.

· Port records and ledgers are often inaccurate and difficult to obtain.

It is difficult to collect claims against the Port Authority in most countries. Indeed, in many countries where the port is owned and operated by the government, claims cannot be filed against the government.

Example: CARE Peru

CARE Peru had 5% port losses on each call forward. Most of the losses took place while the food was in port storage, which was generally between 20 - 25 days. Port storage facilities were inadequate to accommodate the volume of CARE's shipments. The areas also lacked security. Many bags were siphoned by stevedores and day laborers. Port records were often inaccurate and claims against the Port Authority ignored. CARE Peru switched to direct delivery and now loads food directly from a ship onto trucks which immediately leave the port area. All clearance documents are completed and approved before the ship's discharge. CARE Peru also makes arrangements for an adequate number of trucks to receive and dispatch the food quickly. Port losses are now minimal, and CARE Peru does not have to deal with claims against the Port Authority.

Many donors and country offices are opting for containerized cargo delivered via a Through Bill of Lading in order to circumvent port storage and handling. Indeed, almost all food procured through Euronaid, except local purchases, are shipped via a Through Bill of Lading to CARE's main warehouse. Containerized shipments are more expensive than breakbulk shipments, and the receiving port must have appropriate equipment to off-load containers. However, if losses are high, CARE should discuss this option with the donor.

B. General Guidance for Port Storage

If CARE must use port storage, the following table contains some suggestions:

Port Storage Guidance

Activities	Guidance
Storage Practices	Work with the Port Authority to insure that reasonable warehouse storage, handling and accounting practices are followed in the port transit sheds.
Inspections	If food is kept in storage for more than one month, CARE, its counterpart or clearing and forwarding agent must inspect the food for damage and infestations. In some countries, the Ministry of Health requires an inspection to certify the condition of the food.
Fumigation	If food is stored for more than one month, arrange with port authorities to hire licensed professionals for fumigation.
Ledgers	Food stored at the port transit sheds is part of CARE's physical inventory. CARE, its counterparts or the clearing and forwarding agent must regularly inspect port inventory ledgers, complete Loss and Adjustment Reports, and file claims against the Port Authority.

Additional procedures must be put in place to counteract lax security in port areas and limit losses by theft and pilferage.

Limiting Diversion in Port Storage Areas

Type of Shipment	Signs of theft	Suggestions for limiting diversion
For all shipments	Short-weight	An independent surveyor should inspect the quantity and condition of the food before it leaves the port storage area. Assign CARE port officer to inspect facilities and make his/her presence visible to deter pilferage. Limit delays in the port by processing exemptions and clearances as quickly as possible. Limit access to off-loading areas. Place security guards at doors to detect theft. File claims immediately.
For containerized shipments	Damage to containers, (seals, doors or hinges) with removal of part of their contents	The seals and seal numbers should be carefully examined and any sign of tampering noted on the survey report and investigated at the time the tampering is detected with a brief narrative of the probable causes of the damage.
For breakbulk shipments:	Siphoning of small amounts of food	Weight bags to insure uniform weight and note weights on the survey report. Inspect the stevedores' clothing before they leave the port area. Publicly identify individuals caught stealing by placing their names on a blackboard in the port area with the amount of food stolen.
For oil tins	Substitution of oil in tins with water	Seals on tins should be inspected and any sign of tampering noted and investigated.

VII. Forwarding Food From Port Warehouse

A. Dispatch Reports from the Port to the Country Office

1. Daily Dispatch Reports

Internal Control

Country offices must provide its port officers or clearing and forwarding agents with instructions, in writing, on when, where and how much food is to be dispatched from the port. Food cannot move from the port without this authorization.

Depending on the size and nature of a program, country offices may require port staff to send them daily dispatch reports, via fax, telex or radio. Country offices must determine who will be responsible for notifying receiving warehouses of estimated times of arrival.

Dispatch reports, at a minimum, should include:

· The amount of food dispatched
· Waybill numbers
· Transporters' names
· Truck and trailer numbers and numbers of rail cars
· Destination and ETA.

2. Through Bill of Lading

When food is dispatched from a port under a Through Bill of Lading, CARE and its counterparts must provide the shipping agent with a dispatch plan. Based on the plan, CARE should request the shipping company to provide it with a report similar to the Dispatch Report from port.

If the shipping company is unable to dispatch food from the port in a timely manner or significant losses occur during transport, the country office must notify in writing the local donor representative and the CARE International member who assisted in the original food procurement. The country office must maintain complete and up-to-date files of all correspondence with the shipping company, donor, government authorities, transporters and others for later loss/claim actions.

3. Weekly Inventory and Dispatch Status Reports

A country office may require Weekly Dispatch Reports summarizing the amount of food still in port storage, dispatches for the past week, and the ETA of the remaining quantity into CARE warehouses.

B. Delivery Survey

Once customs and other government ministries have given permission to import food into the country, CARE, its counterpart, and the clearing and forwarding agent will coordinate plans with customs and port authorities to forward food from port warehouses to CARE or counterpart warehouses.

In all cases, the independent surveyor should prepare a Delivery Survey Report. This report is similar to information contained in a Discharge Survey Report except that it focuses on conditions at port warehouses, the amount of food moved out of the warehouses and onto trucks or trains, the extent of damages and losses, and determining the port's and transporter's responsibility for any losses

The format for the Delivery Survey report should be similar to the "Ex-Tackle" Discharge Survey.

At a minimum, the report should include the following information:

1. Data regarding the dispatch:

· Name of port and warehouse name or number

· Quantity in units and kilograms reported in the ex-tackle survey report and moved from the ship to port warehouse

· Type of food(s)

· Bill of Lading number and data

· Contract numbers or shipment numbers on Bill of Lading

· Country office shipment number.

2. Dates and times:

· Request by CARE for survey
· Trucks or railcars arrive
· Dispatch begins and ends
· Surveyor views food in port warehouse
· Food viewed by port and customs authorities and released for dispatch
· Repackaging of damaged food.

3. Amount and condition of food:

· Condition of the food in port warehouses prior to loading on trucks or rail cars.
· Quantity of the food dispatched

Less than survey amount
In excess of survey amount

· Condition

Good
Damaged (water, infested, and/or contaminated with chemicals, insecticides or oil)
Slack/torn
Wet
Infested

· Quantity after reconstitution
· Quantity determined unfit for human consumption
· Quantity destroyed/donated/sold for animal feed.

4. Narrative Analysis

· Description of the condition of the food in the port warehouses and nature of any damage
· Extracts from port records about any conditions that may have caused damage to food
· Quality of port labor
· Acceptability of port storage areas for food.

VIII. Recordkeeping for Port Activities

Recordkeeping at the port can be divided into two main areas: overall summary records for all shipments that arrive in country, and inventory accounting records for each individual shipment. Reference ALMIS #4496, Commodity Accounting Manual, and the Inventory Accounting and Reporting chapter of this manual for more information on recording transactions in commodity and warehouse inventory ledgers.

A. Shipment Ledgers

The Master Shipment Ledger records all food arrivals by shipment. This ledger provides basic information useful for cross-checking past shipments and can be used along with individual warehouse inventory ledgers to prepare Commodity Status Reports. Some CARE country offices may keep records of all shipments in one large ledger; other countries have a ledger for each individual shipment or have developed computerized databases or spreadsheets to prepare reports. In any case, the purpose of the Master Shipment Ledger is to have in one record a summary of all transactions relating to the shipment and a file which contains all documents and correspondence relating to each shipment.

A Master Shipment Ledger and Shipment File must be maintained either by CARE's contracted clearing and forwarding agent, the port representative, or the country office headquarters. The following information should be included in the ledger:

· Vessel
· Food type
· Bill of lading number
· Donor shipment or contract number
· Ship's arrival date
· Number of units
· Total weight
· Marine losses
· Port losses
· Total losses
· Total available balance for dispatch to inland warehouses
· Date of survey and other documents sent to CARE USA's Procurement Office or other CI member
· Cost of survey
· Costs of reconstitution.

Generally, Master Shipping Ledgers and shipment files should be maintained by logistics managers in the country office. Information in the Master Shipping Ledger should reconcile with the Commodity Inventory Records kept by the commodity financial accountant and the warehouse inventory records kept by port officers or warehouse managers for each shipment.

B. Shipment File

An up-to-date shipment file must be maintained at the central office. The file contains all shipping documents and correspondence for each shipment and is the primary source material for the Master Shipping Ledger.

Required Documentation for Shipment File:

· Copy of signed AER or similar document from donors
· Call forward letter and/or donor approval
· All transmittal notices
· All signed customs authorizations and clearances
· Phyto-sanitary certificates
· Bill of Lading
· Independent discharge and delivery survey reports and invoices
· Ship and Port Out Turn Reports
· All correspondence related to the shipment
· Port dispatch summary
· Dispatch waybills from the port
· Health certifications.

C. Warehouse Inventory Accounting at the Port

For warehouse inventory purposes, food arriving at a port is treated and accounted for in the same way as food arriving at a CARE warehouse. CARE or counterpart staff or a clearing and forwarding agent must prepare a receiving waybill to account for the arrival of food at the port, and prepare dispatch waybills to account for food moved directly from a ship to trucks or rail cars to CARE or counterpart warehouses or from port warehouses to CARE or counterpart warehouses.

Warehouse inventory ledgers must also be prepared for all transactions at the port. Waybills and Loss and Adjustments Reports must account for all food described on the Bill of Lading. These documents will all be forwarded to the country office and the information will be entered into the commodity financial accounting ledgers. Accurate documentation is essential. (See Food Receipt and Dispatch, Inventory Accounting and Reporting, and ALMIS #4496 Commodity Accounting Manual.)