by Daniel W. Raab, Esq.
Domestic trucking does interface with international shipping and at other times it can be the beginning and the end of a shipment. There are issues as to liability when cargo comes into the United States via ship for a final destination in another state and even for delivery within the State of Florida. A good deal of this article discusses interstate shipments. Some of you might deal with general trucking claims that arise when you send out cargo via truck to another state or within the State of Florida.
The Carmack Amendment, 49 U.S.C.A. 14706, is a statute that regulates the liability of domestic carriers that travel across state lines within the United States. This article concentrates on this statute as it applies to commercial motor carriers, not household goods. Although there are some concepts for liability that are similar to ocean carriers, such as the defense of an act of nature, the Carriage of Goods by Sea Act and the Carmack Amendment are two distinct statutes with shorter limitations of liability then what would apply in a standard breach of contract or tort claim.
If you have a claim against an interstate trucker, it is important to obtain a copy of the bill of lading. This is the contract that governs the terms and conditions of the contract. Oddly enough, some of the motor carrier’s shipping clients and brokers might issue their own bills of lading, if they can convince the motor carrier to accept such a bill of lading. This practice is looked down upon by some insurance companies as they require motor carrier bills of lading.
Under the Carmack Amendment, a motor carrier bill of lading can provide that any claim must be made within 9 months. This claim must be in writing if required under the bill of lading and should be specific as to the damages. It is best to assume that you will have to make such a claim within 9 months. I have gone so far as to hire a process server to serve a motor carrier with a claim document. If you do not do this, you could lose your right to pursue the claim. I would suggest serving the motor carrier directly with the claim, unless its insurance carrier or attorney gives you written permission from the motor carrier to serve one of them with the claim.
If the claim is declined by the motor carrier, you will have two years and a day from the date of declination in order to file a lawsuit. I would suggest that you do it within two years to be on the safe side. The notice and the contractual provisions on statutes of limitations as they are very different from Florida Law which allows 4 years to file on a tort claim and 5 years on a breach of contract claim.
The Carmack Amendment does allow for a motor carrier to have a low limitation of liability. (2-15 Law of Commercial Trucking § 15.08). It is important that you be aware of this if you are going to make a claim against a motor carrier. These limitations of liability are usually upheld by the Courts. The Carmack Amendment provides that limitations of liability must be reasonable under the circumstances surrounding the transportation. 49 U.S.C.A. § 14706(c)(1)(A) which could give rise to further liability in transit if the motor carrier did not follow the shipper’s instructions. It is also important to offer the shipper an opportunity to declare and pay for a higher value. 2-15Law of Commercial Trucking § 15.08. A shipper should carry its own first party insurance. Motor carrier insurance policies have many exclusions and deductibles. The author has encountered policies that state that they have an unattended vehicle endorsement but is only applicable if unattended in a fenced in area with security.
A carrier’s defenses include an act of nature, an act of the public enemy, an act of the shipper (poor packing), inherent vice of the nature of the goods, act of a public authority, and freedom from negligence.
If you have an intermodal shipment where trucking is involved as part of an international ocean shipment and if the bill of lading provides that the entire shipment is governed by the Carriage of Goods by Sea Act; the Carriage of Goods by Sea Act would most likely supersede the Carmack Amendment under the Supreme Court cases of Norfolk Southern Ry. v. James N. Kirby, Pty Ltd., 543 U.S. 14 (U.S. 2004) and Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp., 558 U.S. 969 (U.S. 2009). These cases provide for an extension of contractual liability. An example of this would be if a shipment went by ocean from London to Jacksonville and then by truck to Atlanta. Even if the loss happened while in the truck’s possession, the liability could be subject to the Carriage of Goods by Sea Act as opposed to the Carmack Amendment. This becomes important because there is a 1-year statute of limitation under the Carriage of Goods by Sea Act and a $500.00 per package limitation.
There is also an entity known as a surface transportation forwarder which usually consolidates cargo and is subject to the Carmack Amendment. It does not actually own and operate motor vehicles but can be sued as a motor carrier Transportation Terms and Conditions, Raab, p. 26. It is the motor carrier version of a NVOCC,
There is a third type of entity involved in interstate transportation which is a surface transportation broker which serves as a booking agent and is excluded from the Carmack Amendment. If however a transportation broker acts as a motor carrier on a shipment, it can be sued as a motor carrier and be subject to the Carmack Amendment. This has been the subject of litigation. The author was involved in the case of Active Media Servs. v. CAC Am. Cargo Corp., 2012 U.S. Dist. LEXIS 139785 (D.N.Y. 2012) where the broker was held not to be a motor carrier under the Carmack Amendment.
For shipments within the State of Florida, the Carmack Amendment is not necessarily applicable. Some truckers do have bills of lading for shipments within Florida. There is no licensing for commercial motor carriers within the State of Florida for commercial motor carriers nor for commercial freight brokers. Some bills of lading for shipments within Florida have limitations of liability.
This article is intended to cover some of the basic issues that you might encounter in handling trucking claims and to further clarify the nature of the parties that might be involved with shipments by motor carrier.
Daniel W. Raab, Esq. is an attorney with offices in Miami, Florida. He is a graduate of The Johns Hopkins University and the University of Miami School of Law. His law practice includes the representation of steamship companies, ocean freight forwarders, motor carriers, surface transportation brokers, insurance companies, importers, and exporters including litigation, administrative, and transactional work. He is the author of Transportation Terms and Conditions, Chapter 47 of the New Appleman Practice Law Guide on Inland Marine Insurance (trucking et al), Chapter 5 of the Benedict on Admiralty Desk Reference Book on Carriage of Goods, and a Contributing Author to Goods In Transit. He is currently teaching a class entitled Legal Concepts for Transportation and Logistics Management as an Adjunct Professor at Truckee Meadows Community College.