A landed cost model is built on a clean assumption: every unit that ships arrives, every unit that arrives sells, and every unit that sells stays sold. The receiving dock is where that assumption meets reality. A short shipment, five units missing from a case of fifty, is a 10 percent loss on that case, and the loss is invisible if nobody counts. A damaged pallet, a crushed corner, a water stain on the outer cartons, is a loss that the carrier will pay for only if it is noted at delivery, and the note has to be made before the driver leaves.
The leak is not the single incident. It is the accumulation. Say a shipment runs 2 percent short, 1 percent damaged, and 3 percent of returns never credited: that is a 6 percent leak on the landed cost, and a 6 percent leak on a product with a 20 percent margin is nearly a third of the margin gone. The model says the product makes money. The dock says otherwise, and the dock is right.
The control is a count at the dock, against the purchase order, before the goods are put away. Count the cases, count the units in a sample of cases, and reconcile the count against the packing list and the purchase order before the invoice is paid. A short shipment found at the dock is a claim against the supplier. A short shipment found a month later, when the stock runs out early, is a loss, because the supplier will say the goods were received in full.
The damage log is the second control. Photograph the damage, note it on the delivery receipt, and file the claim with the carrier within the carrier's deadline, which is often measured in days, not weeks. A damage claim filed late is a damage claim denied, and the denial is final. The return log is the third: every return that comes back gets counted, inspected, and credited, and a return that sits in a corner for a month is a return that never gets credited, which is the same as a return that never happened.
The reconciliation happens before the invoice is paid, not after. Match the invoice against the purchase order, the packing list, and the dock count, and pay only for what arrived in sellable condition. A supplier who ships short and invoices full is a supplier who is testing whether you count, and the test is cheap for them and expensive for you if you do not. The reconciliation is also the record that supports the next negotiation: a supplier with a 2 percent shortage rate on every shipment is a supplier whose price is 2 percent higher than the quote, and the quote should be renegotiated on that basis.
The dock is the last place where the landed cost model can be corrected, and it is the cheapest place to correct it, because the correction is a count, a photograph, and a note on a receipt. The correction after the goods are sold is a margin adjustment, and the margin adjustment is the one that hurts. For the quote the dock has to match, brokerage fees and the landed cost they add covers the broker line, and currency swings and the hedge that tames them explains the exchange-rate line that moves after the quote.
At the receiving dock. Short shipments, damaged goods, mis-picked units, and returns that never get credited all leak money after the container lands, and a 2 percent shortage plus a 1 percent damage rate plus a 3 percent uncredited return rate is a 6 percent leak on the landed cost.
Count at the dock against the purchase order before the goods are put away, and reconcile the count against the packing list before the invoice is paid. A short shipment found at the dock is a claim against the supplier. A short shipment found a month later is a loss.
Photograph the damage, note it on the delivery receipt before the driver leaves, and file the claim with the carrier within the carrier's deadline, which is often measured in days. A damage claim filed late is denied, and the denial is final.
No. Match the invoice against the purchase order, the packing list, and the dock count, and pay only for what arrived in sellable condition. A supplier who ships short and invoices full is testing whether you count.