Cargo and freight claims can be a complex and daunting area of transportation law. However, proper planning and understanding of the risks involved can go a long way in avoiding costly issues.
In a recent episode of our Trucksafe LIVE! podcast, we were fortunate to have two leading experts on the topic, transportation attorneys Kristen Johnson and Craig Helmreich, join us to discuss their experiences and insights.
First and foremost, Johnson and Helmreich emphasized the importance of having a clear contract in place when transporting goods. This includes specifying the terms of the transportation, such as the type of goods being transported and the expected delivery date. It is also important to clearly outline the responsibilities of each party involved, such as the shipper, carrier, and broker.
Having a clear contract in place can help prevent disputes and misunderstandings, which can lead to costly delays and damage to the goods being transported. In the event that a dispute does arise, a clear contract can provide a solid foundation for resolving the issue.
Another key consideration is understanding the risks involved in the transportation of goods. This includes potential issues such as theft, damage, and natural disasters. Proper planning and communication can help mitigate these risks, such as by choosing the most secure transportation method or route, and providing regular updates on the status of the goods being transported.
According to Johnson and Helmreich, it's also critical that carriers understand the limitation of liability provisions included in their contracts. "Has the contract capped what you're exposed to," asks Helmreich. "Typically [the liability limitation clause] will say something from the motor carrier's perspective capping your liability to maybe $100,000 per truckload, or maybe $250,000 if you have a shipper that's demanding. You definitely don't want to be signing unlimited contracts for cargo liability unless you're making a decision that the risk is worth the reward."
Helmreich was also quick to point out that these liability limitation provisions are separate and distinct from cargo insurance requirements. According to Johnson, "make sure you have adequate insurance coverage at least up to that level of liability that you have accepted. You have that within your control and if you don't have adequate cargo liability coverage, don't take that load unless you're willing to cover whatever the gap is if something happens to that load."
Johnson and Helmrich also discussed the issue of unauthorized brokerage, which can lead to significant problems for all parties involved. Unauthorized brokers are individuals or companies that act as intermediaries in the transportation of goods without being properly licensed or authorized to do so. This can lead to disputes over payment and responsibilities, as well as potential legal issues. We had a separate podcast episode devoted to this topic if you're interested.
In conclusion, cargo and freight claims can be a complex and challenging area for fleets to navigate. However, proper planning and communication can help prevent issues and ensure the successful transportation of goods and limitation of liability. Clear contracts, understanding of the risks involved, and working with licensed and reputable brokers are key considerations to keep in mind.
About Trucksafe Consulting, LLC: Trucksafe Consulting is a full-service DOT regulatory compliance consulting and training service. We help carriers develop, implement, and improve their safety programs, through personalized services, industry-leading training, and a library of educational content. Trucksafe also hosts a monthly live show on its various social media channels called Trucksafe LIVE! to discuss hot-button issues impacting highway transportation. Trucksafe is owned and operated by Brandon Wiseman and Jerad Childress, transportation attorneys who have assisted some of the nation’s leading fleets to develop and maintain cutting-edge safety programs. You can learn more about Trucksafe online at www.trucksafe.com and by following Trucksafe on LinkedIn, Facebook, Twitter, and YouTube.
