It happens more often than shippers or carries wish it would, but the fact is that cargo is often lost, stolen, or damaged while being shipped interstate. Being an important issue of the national commerce, Congress decided long ago to regulate the loss and damaged of the cargo shipped interstate by passing the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706 et seq.
The Carmack Amendment has been a solid source of reliability for both shippers and carriers dealing within the interstate trucking industry. The purpose of the Carmack Amendment is to establish a uniform policy of liability when cargo is lost, stolen, or damaged during interstate shipping. This uniform policy puts shippers and carriers on solid ground when they assess risk and liability before shipping goods.
Carmack Amendment and Preemption
Because the Carmack Amendment is a national, federal policy, it works to prevent claims being made under state or other federal laws when cargo is lost, damaged, or stolen. This is a legal principle known as preemption, and has its origin in the U.S. Constitution. It adds to the reliability of the risks and liability involved with interstate shipments, and it prevents a system where fifty different systems are applied throughout the country.
Preemption of state laws by federal law comes from the Supremacy Clause of the U.S. Constitution. It states that the Constitution, federal laws, and treaties emanating from it will be the supreme law of the land. In effect, this works to prevent a state law claim from being made when a federal law already regulates the issue.
This principle of preemption is particularly important in Carmack Amendment claims for the liability it reduces on state law claims. For example, when two parties contract to move goods from one state to another, and the goods are damaged on the way, without preemption the shipper could make a claim for breach of contract, conversion of private property and others. But because the Carmack Amendment regulates this under federal law, state laws are not applicable.
Carmack Amendment and Modification
The Carmack Amendment’s uniform policy of liability puts the liability for lost, stolen, and damaged goods squarely on the shoulders of the carrier. Under its terms, a carrier is one hundred percent liable for damages that happen to cargo within their control. But this is just a starting point, and carriers with shippers have the right to modify their agreements.
A carrier can reduce the liability it faces under the Carmack Amendment at the point of contracting with a shipper through a bill of sale. But to do so in a way that holds in court requires following several technical steps. Otherwise the modification will not be upheld and the carrier would be held liable for the entire lost, damaged, or stolen cargo. These details are key for carriers to lower their costs, and risk as they do business.
A Trucking Law Firm for Your Company
At Anderson and Yamada, P.C., we are a law firm focused primarily on representing the interests of truckers and trucking companies. Whether dealing with liability under the Carmack Amendment, or facing compliance questions with the federal government, we are here to help. Contact us today.