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The late William J. Augello, co-author of Freight Claims in Plain Englishhad a passion about this topic as few others have. I believe that there are at least two reasons why Bill felt so strongly about the importance of understanding claims. The first reason is financial.

Unrecovered claims have a direct impact upon the bottom line of a company—and the tougher the economic times and thinner the margins the greater the impact. For carriers, whose core business is transportation, the processing of claims is an integral part of their business, and all but the smallest of carriers are quite knowledgeable and very competent when it comes to defending against claims.

For most retailers, manufacturers, and distributors, the transportation function is an unwanted headache—and claims represent a migraine. However, just because something is difficult does not mean that it can be ignored. Basic legal principles The starting point in understanding cargo claims is to understand that a claim is based upon a breach of contract by the carrier, not whether the carrier was negligent. This arises out of the fact that the essence of a transportation contract is that the carrier agrees to move a piece of cargo from point A to point B.

In return, the shipper agrees to pay the carrier. Implicit in this arrangement is that the cargo will indeed arrive at destination in an undamaged condition.

The contract for carriage can either be an individually negotiated contract between the shipper and the carrier; or, if none, the bill of lading, waybill, ocean bill, or other document issued by the carrier. Generally speaking, in order to prevail on a claim, the claimant has the initial burden of proving its claim. The english must prove good condition at origin, damaged condition at destination, and the amount of its damages.

After establishing these three elements, the burden of defense shifts to the carrier. Different rules apply depending upon mode Another very basic principle that must be kept in mind when dealing with a claim is that plain legal principles and rules will apply depending upon the mode of transportation.

Motor, rail, domestic water, international claim, domestic air, or international air all have different time limits for filing claims and different deadlines for initiating lawsuits if a claim is denied. At one time the majority of carriers freight operated in one particular mode.

Now, many entities operate in more than one mode. Accordingly, an important initial step in analyzing any claim is to determine which mode the carrier was operating in at the time of the loss and thus which liability regime would apply.

This can be very challenging for international movements involving multiple carriers and various modes. Carmack also sets minimum time standards for filing claims nine months from the date of delivery and for initiating lawsuits two years from the date the claim is denied. It should be noted that the federal statutes do not themselves set these limits, but only prescribe the minimum.

The ificance of this is that if there is no tariff—as is often the case with small trucking companies—then there is no time limit to file a claim nor a two-year limitation on filing a lawsuit. It should also be noted that Carmack only applies if the carrier is providing a regulated service subject to federal jurisdiction. When transporting an exempt commodity, like livestock, or operating in intrastate commerce totally within one stateCarmack does not apply.

For such shipments, the carrier could have tariff rules providing for shorter time limits than the minimum required by the Carmack Amendment.

Freight claims in plain english

The essence of Carmack is that the english are considered to be a virtual insurer and are strictly liable for cargo claims. There are, however, five recognized exceptions or defenses: 1 an act of God, 2 an act of the public enemy, 3 an act of a public authority, 4 an act of the claim, or 5 an inherent vice of the product.

And, even though one or more of these factors might be present, the carrier must freight show that it was free of negligence. Ocean cargo liability Ocean shipments to and from the U. This, in turn, is based upon an international treaty known as the Hague Rules. Under COGSA, an ocean carrier has 17 defenses; plain, as with Carmack, even when the facts establish such a defense the carrier must also show that its negligence did not contribute to the loss.

Freight claims in plain english (4th ed. )

For ocean shipments, the timeline to file a claim is only three days from delivery; much, shorter than the nine months allowed under Carmack. Similarly the timeline to file suit is one year from the date of delivery—as opposed to two years from the date of declination of a claim under Carmack.

Originally COGSA was understood to apply tackle-to-tackle, meaning from the time that loading the shipment began to the completion of unloading the shipment. However, over time, the ocean carriers have been allowed to extend the COGSA liability regime to its subcontractors.

Regal-Beloit Corp. So far, only Spain, has ratified the treaty. Air cargo liability Different rules apply for domestic air shipments or international air shipments. These limits can be quite short—seven days or even less.

Freight claims in plain english fourth edition

For international shipments, the Montreal Convention ofan international treaty, sets the time limits and limits of liability. A claim must be filed within 14 days of delivery for damage and within 21 days for delay. While the Convention does not provide a time limit for claims for non-delivery, the airlines typically set a limit of days from the issuance of the air bill for notice of non-delivery.

However, as with any insurance policy, it will have its own exclusions and deductions that must be carefully scrutinized by shippers to ensure that their freight is indeed insured. The purpose of the claim is to put the carrier on notice of the facts relating to the damage or loss so that the carrier may investigate the claim and make a decision whether to pay it, decline it, or offer a compromise amount in settlement.

Although not at all in the nature of a lawsuit, the timely filing of a claim is a prerequisite for any later litigation.

If a claim with a motor carrier is not filed within nine months, the claim is extinguished. The mechanics of claim filing are far beyond the scope of this article. Suffice it to say here that if not done correctly or within the applicable time limits, the result can be an unrecoverable claim.

Also, it is very important that the claim be filed with the transportation carrier, as opposed to the insurance carrier. A claim filed with the insurance carrier, rather than the carrier providing the transportation service, is not considered a duly filed claim for purposes of meeting the claim filing time limit.

Shippers and intermediaries This article is focused on the liability of carriers, however, shippers can also be liable for cargo damage if the shipper caused the damage. An example of this would be an LTL shipment when a poorly packaged liquid breaks open and stains or otherwise damages other cargo on the truck.

With respect to transportation intermediaries, as a general principle, they are not liable for claim damage. It must also be kept in mind that some entities that shippers think of as intermediaries may, in a legal sense, actually be carriers—for example, surface freight forwarders or so-called indirect air carriers. CCPAC is comprised of transportation professionals representing shippers, intermediaries and carriers all across the U.

Toggle. Latest Resource Prepare for same-day delivery and sell more. News Find your robotics fit U. Logistics and the Law: Freight claims in plain English Our transportation law expert provides shippers with a refresher course in the basic legal principles relating to claims for cargo loss and english. About the Author Brent Primus. Subscribe to Logistics Management Magazine! Subscribe freight.

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