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Select the Right Freight Carrier

September 1, 2005 By: Robert Spira Paperboard Packaging

There's a wide variety of trucking firms out there. These precautions will help board converters choose wisely.


When I began my law practice, I was hired to represent a shipper in a cargo claim involving a delivery of paper materials. The trucker was supposed to deliver the load on a Friday afternoon. The delivery never happened and the cargo was left on the loading dock. Heavy rains fell over the weekend and by Monday the cargo was ruined. The carrier had been notified of the cargo's content and knew that it had to be kept dry. However, it failed to do so. The carrier refused to respond to the shipper's cargo claim and we were brought in to set things right.



We had no difficulty obtaining a default judgment against the carrier and we were successful in collecting some of it. However, as we moved forward to collect on the judgment, we found that the carrier was in the process of liquidating its business. We could find no assets and the carrier was able to avoid paying most of the claim.

Is there anything to be learned from this case?

You Have Options

Before tendering any freight:

  • 1. Ask the carrier for a copy of its operating authority and certificates of liability and cargo insurance. Check the Federal Motor Carrier Safety Administration (FMCSA)'s online database for detailed information about the carrier (www.safer.fmcsa.dot.gov|~www.safer.fmcsa.dot.gov/).
  • 2. Under "Company Snapshot," FMCSA provides information about the carrier including number of vehicles, number of drivers and types of cargo.
  • 3. Under "Licensing and Insurance," FMCSA confirms that the carrier is registered and in good standing and has evidence of insurance on file.
  • 4. Under "SafeStat," a shipper can research the safety performance history of a carrier including any safety rating issued by FMCSA.

Establishing Liability

To be successful in a cargo claim, a shipper must prove three things:

1. The goods were in good condition upon receipt by the carrier;

2. The goods were not delivered or arrived damaged; and

3. The actual loss to the shipper.

If the shipper is not comfortable assuming any portion of the risk of loss, most carriers will allow the shipper to request additional insurance coverage. However, the shipper must notify the carrier (e.g., check the appropriate boxes on the bill of lading) and pay separately for the additional insurance. It may be cheaper for the shipper to provide for its own property perils coverage.

If cargo is lost or damaged, the shipper should notify the carrier and begin the claims process as soon as possible. In general, tariff provisions require that claims must be filed within nine months.

 
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