The Condition of Goods at Shipment and the Carmack Amendment

Kevin Anderson Cargo Liability, Transportation

The Carmack Amendment is a federal policy aimed at ensuring an across-the-nation principle of liability for the trucking industry. This is the law that applies anytime an interstate shipment of goods is lost, stolen, or otherwise damaged while in transit, and it is fairly straightforward in assigning liability in most cases. This predictability and uniformity has helped grow the trucking and transportation industry into the economic behemoth we have today.

In the vast majority of cases involving lost, damaged, or stolen goods, the carrier will face liability for the losses that occur. This policy put the responsibility on the carrier to ensure goods are delivered safely to their destination. Were it not so, the shipper would be more hesitant to ship goods with other companies, and the flow of commerce would be slowed considerably.

Basic Case for Carmack Amendment Liability

Under the provisions of the Carmack Amendment, there are three basic elements a shipper must show to establish liability for damaged, lost, or stolen goods. Those three basic elements are:

  • That the goods were delivered to the carrier in good condition;
  • That the goods were lost, stolen, or damaged prior to arrival of the intended destination;
  • The amount of damages that resulted to the shipper.

As you can see, these elements are basic, and typically not difficult to establish by a shipper. But with each element there is an opportunity for a carrier to show why they are not, in fact, liable.

The first element presents the best opportunity for the carrier to show that he is not liable for damaged cargo. In most cases cases the shipper uses a clean bill of lading to show that the goods were delivered in the proper condition, but each case has its own set of fact that can change this standard approach to liability. The inquiry into liability is fact dependent in every case.

One example of how the facts of a case can change who is liable is in shipments of goods in sealed containers. When the goods being shipped from one place to another arrive to the carrier in sealed containers, the best practice is for the carrier to inspect the goods to ensure that they are in good condition. If the shipper does not allow this, then a question arises as to where the damage occurs.

Of course, the only way a fact like this can come to light is if it is documented properly by the carrier at the point of carriage. Training and teaching employees who are the front lines in these situations is vital to a company’s success in the trucking industry, and can contribute to an effective loss mitigation policy. But you have to know this and other important aspects of the federal law regulating lost and damaged goods before you can come up with a plan.

The Pacific Northwest’s Trucking and Transportation Law Firm

At Anderson and Yamada we have decades of experience representing trucking and transportation companies from the Pacific Northwest on these and related transportation issues. As your company finds itself in need of legal counsel and representation, consider contacting us. We would love to put our experience to work for you today.