Cargo Loss A new and dangerous wrinkle in a century-old problem
By Greg Jones Guest Writer
Cargo loss is a dirty word to any
carrier, and the legal language that should protect carriers and shippers when the worst happens to very expen- sive commodities can get complicated quickly, especially on interstate loads. A 1906 federal statute known as the Carmack Amendment to the Interstate Commerce Act, has answered liability questions for over a century. However, recent cases may possibly serve as a dangerous new precedent for claims filed by brokers. The carrier risk is suddenly much
higher. Consider what you would do if your liability for one lost load grew from thousands to millions. So business is a little slow. When
a broker calls to offer twenty lucrative loads, your salesman thinks, “We’ve got the capacity, and we need the business.” The broker forwards a master services agreement, the initial contract that spells out most of the terms between parties. Your salesman alertly spots one key clause requiring you as the car- rier to procure $100,000 per load in insurance coverage. That’s nothing new to your salesman, who has an insur- ance agent in the wings ready to bind the coverage with a quick phone call. Paperwork is signed, bills of lading are issued, and your drivers make the first deliveries. The money starts rolling in.
LOSING CARGO But then the phone call comes in
to dispatch from one of your drivers. He was in unfamiliar territory. He had just 50 more miles to go to get to the
ARKANSAS TRUCKING REPORT | Issue 5 2014
consignee, but had already driven eight hours without a break. He tells your dispatcher, “For the past year, you guys had drilled into my brain the need to take that new 30-minute break, so I stopped for a bite. And when I came out, the load had been jacked.” Your loss prevention folks spring
into action. They ask to see the bill of lading for the load that had been stolen. Sure enough, they find it and confirm
that it contains the normal language and shipper agreement that all the terms and conditions of the Uniform Domestic Straight Bill of Lading con- trol. Someone even remembered to insert a released value for the shipment, which is well under the $100,000.00 insurance coverage. Everyone relaxes until somebody
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