The Carmack Amendment and a Clean Bill of Lading

Kevin Anderson Bills of Lading, Cargo Liability, Transportation

For those involved in the trucking industry, it is only a matter of time before a shipper makes a claim for lost, stolen, or damaged cargo. When that happens the claim comes under the provisions of the Carmack Amendment, as long as the goods were shipped interstate. This federal policy is a national policy with established rules that should determine what the rights and obligations of the shipper and carrier are in any given situation. The federal policy of liability for truckers is important for predictability and certainty in the industry, and it has several elements to it that must be met before a claim can go forward. In a recent case from Ohio, a federal court dealt with a trucking company and the claimed loss of tens of thousands of dollars worth of equipment due to damage in the course of its transportation. Proof of Condition in the Goods …

A Primer on Damages and the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

For those involved in the trucking industry, there is always a chance that the goods being transported could be lost, damaged, or stolen while in transit from point A to point B. And when those goods are being transported from one state to another, some may ask which state law should apply to resolve the issue. But thanks to a national policy, there is no need to ask that question. That national policy that provides for what happens when trucking goods are lost, damaged, or stolen is known as the Carmack Amendment. It is a federal law, codified at 49 U.S. Code § 14706, and since its enactment it has provided the trucking and transportation industry with stability and predictability when it comes to mitigating the loss that inevitably happens over the road. But even this national policy can have some variations from one area of the country to another. …

Indemnification Without an Agreement

Kevin Anderson Bills of Lading, Cargo Liability, Transportation

One of the risks a carrier often runs involves carrying more valuable cargo than they know about or approve of. This can happen in a number of different scenarios, but one of the riskier situations is where two companies have an existing contract for transportation of goods, and a third party ships goods under that contract. That is what happened in a case earlier this year where a judge had to rule whether indemnification was an option when there was no agreement to indemnify. In that case, Macy’s Corp. Servs., Inc. v. W. Express, Inc., the shipper had a contract to transport goods for Macy’s, and a third party entered into that contract and had the carrier take a load of goods interstate. Before taking off, the third party and the carrier had a bill of lading with a declared value, and sometime during transit the cargo was stolen. In …

Multi-Million Dollar Carmack Amendment Case Winds to a Close

Kevin Anderson Cargo Liability, Transportation

A Carmack Amendment case out of Ohio that could be described as an epic poem is finally (maybe) coming to a close. The storied case, Excel, Inc. v. Southern Refrigerated Transport, Inc., has made its way to district court, the Sixth Circuit Court of Appeals and back over beginning in December of 2007. Now the district court in the case has issued another final ruling, and the case should go away. This case began when a shipper contracted with a broker to have millions of dollars worth of pharmaceuticals shipped from one state to another. En route, the truck was stolen and all the goods were lost. The truck was never recovered, and the goods were considered a total loss. Under the Carmack Amendment the carrier is liable for the full value of goods lost, stolen, or damaged in transit. But there are exceptions to this rule, and that is …

Shippers, Carriers in Row Over Standard Bill of Lading

Kevin Anderson Bills of Lading, Transportation

Changes are afoot regarding the standard bill of lading used by carriers who participate in the National Motor Freight Classification. That bill of lading uses the standard tariff and incorporates the terms of a shipment between shipper and carrier. That tariff is created and implemented by the NMF Conference, represented heavily by the bigger carriers in the country. Because the bill of lading is closer to companies doing the shipping, rather than the shippers, it has carrier friendly terms. It is those terms that have brought organizations representing shippers out of the woodwork to fight the changes to the standard bill of lading, and they have laid their claims to the Surface Transportation Board who will accept or reject the new terms. Changes to the Standard Bill of Lading One big change to the new bill of lading is under what terms most less-than-truckload carriers will haul freight in the …

The Right Contract Can Save

Kevin Anderson Bills of Lading, Cargo Liability, Contracts, Transportation

An issue that is consistently raised in Carmack Amendment litigation is whether a bill of lading or shipping contract effectively limits liability. This is an important issue because of the implications it has for carriers’ bottom lines. Based on prior experience, insurance policies, and contracts, a company has a general idea of what their exposure is. But because of different federal laws, a company may be misguided in this notion. The Carmack Amendment works as an all inclusive insurance policy. Most people in the trucking industry know this, but they also know that liability can be limited through a bill of lading. What they may not know is that there are specific requirements that must be met for liability to be limited effectively. In ninety percent of commercial transactions and relationships, the involved parties are free to contract different positions with each other. But in some situations there are laws …

Carmack Amendment and Through Bills of Lading

Kevin Anderson Cargo Liability, Judgments, Transportation

A question that comes up from time to time in the shipping and cargo transport industry is the applicability of the Carmack Amendment to overseas shipments. This question was raised recently in an opinion issued by a federal district court in Illinois. And while there are clear rules in place that regulate the applicability of the Carmack Amendment to international shipment, there are details that can easily be overlooked. In the case out of Illinois, the court was asked to dismiss a complaint based (in part) on the provisions of the Carmack Amendment. The underlying dispute was over a damaged aircraft engine that was shipped from Mexico to the U.S. The shipper argued that the carrier was liable for the damages under the Carmack Amendment, as the damages happened while being transported inside the U.S. The defendant wanted that portion of the complaint dismissed. After all, the Carmack Amendment is …

The Carmack Amendment as a Double Edged Sword

Kevin Anderson Cargo Liability, Transportation

In a twist on how the Carmack Amendment is typically used, a trucking company took full advantage of the provisions of the Carmack Amendment. This is another example of the powerful tool the Carmack Amendment can be to hold carriers liable for damaged cargo. In this case, a driver of a trucking company had a break down while traveling interstate, and learned that his engine had a hole in it. Because time is money, the company got right on the issue and ordered a new engine for the truck so it could get back on the road. But once the engine arrived to replace the old one, that is when the real problems began. As it turned out, the trucking company bought the engine from the repair shop who had it shipped to them by another trucking company. But once it was discovered the engine was damaged, the shipper tried …

A Shipper’s (and Carrier’s) Worst Nightmare

Kevin Anderson Cargo Liability, Contracts, Transportation

A healthy amount of trust is needed for a shipper to engage a carrier to ship goods from one state to another. Nowhere in the industry is this more true than in the shipping of personal goods in an interstate move. In those cases, the shipper is trusting the carrier with personal valuables, keepsakes, heirlooms, and other important goods. Given this fact, it is no wonder that when something goes wrong with a move, expensive litigation results. This is what happened recently in a lawsuit involving the Carmack Amendment and other claims because of a botched move. The facts described in the opinion demonstrate what would be a shipper’s worst nightmare. What Happened in This Case This all began when a family contracted with a large, well-known moving company to move their goods from Florida to Connecticut in late 2013. As part of their contract, the shipper arranged for the …

Prior Rate Agreements Found to be Binding in Carmack Amendment Case

Kevin Anderson Cargo Liability, Transportation

A shipper recently lost their arguments against a national cargo transportation company regarding whether that carrier adequately limited their liability. This case, decided by a federal court in Michigan, underscores the importance of understanding the documents, contracts, and bills of lading used to ship goods from state to state. One sentence in a contract can alter and direct the outcome of litigation involving millions of dollars. This case also highlights another issue that raises itself on a regular basis in Carmack Amendment cases: limiting liability. Of course this would be a common issue because a shipper is constantly seeking to get as much money for lost or damaged goods it can, while a carrier wants to pay as little as possible. The original purpose of the Carmack Amendment was to create a uniform scheme of liability that applies from state to state, across the nation. Keeping that in mind, the …