Shipper Load/Shipper Count (SLC) and Shortage Deductions at Walmart

What is Shipper Load/Shipper Count (SLC)?

SLC is a shipping method for suppliers in which the shipper assumes the responsibility of both counting and packaging the correct amount of product to ship to the retailer for a particular load.

Normally, with collect shipments, the driver picking up the load would verify the quantity of all items on the load, providing acknowledgement via their signature on the Bill of Lading (BOL), which in turn offers the supplier assurance that their part of the shipment has been completed adequately (i.e. on time and in full) and releases the supplier from responsibility.

For SLC shipments, however, the product quantities are not verified by the Walmart driver. They still technically have BOLs, but the BOLs do not indicate that the driver verified the quantity at pickup.

If suppliers are unsure whether a given shipment is SLC or not, it can be determined from the BOL. SLC should always be indicated in the Shipper Signature/Date section of the BOL (see image below). If both "Trailer Loaded" and "Freight Counted" are checked as "By Shipper," then that indicates that the shipping party (the supplier) is responsible for handling both of those numbers.

Why Use the SLC Method? 

One of the benefits of shipping SLC is that it reduces the time for product pick up. Walmart will sometimes request SLC pickups for certain shipments to both save time and money. Walmart may hire a carrier for a load that is SLC exclusively, or Walmart drivers may also request the order be SLC upon pickup if they are behind schedule or in a hurry. In this sense, it is similar to the DSV method of shipping.

These conditions, though perhaps not ideal all the time, can be attractive to suppliers for a variety of reasons. Not only does it save time, it may also be an effective means of freeing up lanes at warehouse locations or getting a given shipment out in time. 

SLC and Deductions

Given, however, that the burden of proof in the dispute process for claimed shortages is on the supplier, this method certainly has its drawbacks. BOLs and PODs are pivotal in disputing many kinds of deductions at Walmart or other retailers.

In the case of Collect SLC shipments, the retailer doesn't verify the load count until it arrives at the DC. Whereas, in Prepaid shipping, the POD at the DC will count as adequate proof against, for example, an in-full deduction, in Collect shipping, a BOL usually occupies that same space in the process of finding proof for a dispute.

Collect SLC shipments can cause issues because the supplier transfers ownership of the goods to the retailer at pickup, but the carrier (acting on behalf of the retailer) never verified that the counts on the BOL were accurate. Shortage deductions become difficult to dispute for SLC shippers because there is no official document where the driver acknowledged the quantities picked up. Therefore it becomes the supplier's word on what was shipped versus the retailer's word on what was received.

SLC and Settlement Disputing

For a while, suppliers who shipped SLC benefited from settlement disputing. It is common for collect shippers to have a fair amount of shipments mis-received when they arrive at the retailer's DC, leading to invalid overages and invalid shortages. In settlement, these overages could cancel out shortage deductions. The settlement disputing process generally required less manual involvement, even if it wasn't an exact method of balancing what was owed and not.

This problem with disputing regular shortage deductions will be multiplied exponentially for SLC shippers whose Walmart businesses rely heavily on settlement disputing for dealing with shortages en masse when Walmart terminates the program in May 2023. Historically, SLC vendors who utilized settlement cut their losses on shortages by settling a certain number of their deductions, thereby avoiding the sticky problem of having to match their documents with Walmart's "Inventory Received Reports."

However, beginning in May 2023, this process will no longer be available to suppliers, and SLC shippers could see lower approval rates for disputes because their BOLs don't contain adequate proof to overturn deductions in Walmart's eyes. Overages and shortages will have to be tracked and gone after separately. 

Guidance for Suppliers & Potential Solutions

Although the process of individually disputing shortages is more difficult for SLC shippers, it isn't an insoluble problem. If a SLC shipping document will not be counted as proof, shortages can be fought with retailer data that shows what was received for the entire purchase order or entire load. If one item was short but another was over-received, then those can offset and the shortage might be repaid. If that method still doesn't work, suppliers can also try to invoice for any over-received goods that may exist and have not been paid.

 Of course, the ideal solution would be to not have BOLs marked SLC in the first place. Though less common, some suppliers have been able to change their pickup process  to have the Collect carrier acknowledge shipment counts at pickup, thus removing the SLC designation from their BOLs. This shifts responsibility for misreceived shipments onto the retailer and allows the BOL to be used as proof that shipments were picked up in full.

Steps to Editing BOLs 

For some retailers, some suppliers have been able to edit their pickup process to have the carrier acknowledge pallet and carton counts on the BOL so that it is more useful as proof documentation in individually disputing shortages. These steps may not be as effective when trying to change SLC at Walmart.

1. Track down contacts within the organization that manage the transportation and warehousing for collect shipments. This could be a combination of distribution, logistics, and/or 3PLs. 

2. Once the correct contacts have been identified, explain the current situation, the difficulty of disputing SCL shipments, and how the discontinuation of settlement disputing exacerbates that situation. 

3. Advise warehouses to request a new process whereby the retailer driver spot-checks the shipments prior to signing the BOL, hence putting ownership on the driver. If the driver checks the "by driver/pallets said to contain" option on the BOL for Freight Counted, disputes are much more likely to be successful if there is a shortage. The driver must also notate the number of pallets or cartons if the shipments are palletized/shrink-wrapped. 

4. If a 3PL gives pushback, it may be advisable to try to elevate the issue to leadership within the supplier's organization. Suppliers have had success in the past with passing shortage deductions on to 3PLs in similar instances, but, ideally, invalid deductions could be won with Walmart if the proofing process changes in this way. 

TL;DR

Walmart discontinuing their settlement dispute process will be challenging for suppliers who rely on Shipper Load/Shipper Count (SLC) shipping and then offset the difference through settlement. Suppliers should arm themselves with new tools for fighting shortage deductions, and (when possible) work to push responsibility for shipment counts on to Collect drivers and 3PLs before the shipments are picked up, in order to avoid a massive increase in shortage deduction costs.