Freight Claims

MikeJr

Moderator
Staff member
30
I'd say Carmack applies, $10 000 (to the owner of the goods).
That little clause will be picked apart by lawyers and the BOL was signed by the shipper and driver (only).
If there was damage to city property liability would be unlimited for that.

Keep well, keep safe,
Mike
 

Michael Ludwig

Well-Known Member
20
Does an insurer consider it part of service the carrier is paying them for or is it a non starter since there is no cost to the insurer?
I do. Simply to put them on notice that something is happening. I do not need them to expense anything, but just be aware. I loop them in on all email conversations and provide them with notes on telephone conversations. If the claim ever goes south in a big way then the insurance company is already aware of the situation.

So let's do a little poll....................
You are the carrier. Unfortunately, on a produce load from TX to ON, your driver runs off the road, and the produce is not salvageable. The load is worth $10,000.

What is the carrier's limit of liability? No value on BOL
1. $2/lbs based on the total weight of the shipment
2. $10,000
3. Unlimited

Now look at the attachment

Comments??
I see there's been lots of comments on this subject.
The correct answer to your direct question is #3 - Unlimited
Why anyone would take such a load is beyond my understanding. You would have opened yourself up to any number of liabilities, none of which will end up in your favour.
The "losses due to an act of nature" is by far the worst one as "act of nature" is not defined. The natural rotting of vegetables, refrigerated or not, is an "act of nature". By accepting that load you have in effect guaranteed the quality of the load. A Fool's Errand if there ever was one.
A carrier confirmation can be, and usually is, viewed as a contract. Where a carrier confirmation has trouble is when it tries to contract outside of the law. In this case these clauses are in addition to, not in contravention of, the law. A carrier taking this to court and relying on Carmack or the Motor Carrier Act to absolve them will be unpleasantly surprised. You accepted the load which by extension means you accepted the contract. You are liable to the full extent of the contract.
A comment above suggested simply striking out the parts you don't agree with. Contract law does not work that way. First of all you have to strike it out with a single thin line so the original text remains legible, then you have to initial it. You return that to the originator of the contract, wait for them to also initial your strikeouts, then print, sign, and date at the bottom, and return it to you. Only then do you have a duly executed contract, and can proceed accordingly.
I have also seen comments stating "Carmack will apply". That is correct. If the load is between the U.S. and another country, and the shipper is in the U.S. Carmack certainly will apply, but so will the carrier confirmation because it is not in contravention of Carmack.

Personally I am astounded by the general lack of knowledge by the vast majority of carriers and brokers on this subject. It is as fundamental to the transportation industry as is the knowledge that speeding will get you a ticket, a ticket will get you CVOR points, CVOR points will put you out of business. So will uncontrolled exposure to liabilities.
Not to anyone in particular, but, if you don't know this stuff, why are you in this business?
 
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27426

New Member
2
I've observed that most people in this industry come from another industry or work their way up from the driver/dispatch level. Its entirely possible to get to a position of responsibility with only training from internal sources and what you learn on your own. Most of the time you learn when you make a mistake or when you are presented with a new problem.

I've hired out of the various supply chain programs in London/Cambridge, but even at that level its about theory and not a singe course involves any regulation, HOS, BOL/Carmack, etc.

How did you learn? School of hard knocks, training from a good mentor, or something more formal? The question is open to anyone who wants to answer.
 

tasuinam

Member
5
I've observed that most people in this industry come from another industry or work their way up from the driver/dispatch level. Its entirely possible to get to a position of responsibility with only training from internal sources and what you learn on your own. Most of the time you learn when you make a mistake or when you are presented with a new problem.

I've hired out of the various supply chain programs in London/Cambridge, but even at that level its about theory and not a singe course involves any regulation, HOS, BOL/Carmack, etc.

How did you learn? School of hard knocks, training from a good mentor, or something more formal? The question is open to anyone who wants to answer.
The almighty Google is a good guide - and reading everything carefully (so when I see 49 U.S. Code § 14706 as part of the Carrier Confirmation I look it up)- also having a mentor / larger company that you have contacts with help you out with resources and point you to some resources. I do not know of anything formal....
 

Michael Ludwig

Well-Known Member
20
Supply chain programs deal specifically with the supply chain, not necessarily the logistics part of the supply chain.

First and foremost: Set a high moral standard for yourself and your company and form relationships with your industry peers. e.g. many years ago I transitioned this company from local farm products and general freight transporter to an international refrigerated transporter. A number of the people that inhabit this forum were instrumental in my gaining knowledge to effectively execute that transition. Thanks Donkey :)
The same when I transitioned from reefers to dry vans. I reached out to my friends, made new friends, learned the way dry vans operate, and became successful at that too.

I would think that for most of us here, our first educational program was the School of Hard Knocks.
Ask lots of questions of your vendors, and listen intently to the answers.
I learned most of what I know about insurance and claims from the insurance brokers I have dealt with over the years. I listen to, and ask questions of, my lawyers and accountants. I purchase fuel, trucks, trailers, parts, and services differently now than I did back in the day because of the relationships I have with those vendors. The list goes on.
Keep your ear to the ground. Know what the world situation is and how it relates to the products you move.
Continuing education is a must. Think in terms of administration, finance, and economics.
Something I found incredibly useful was to take CITT courses. I expect P.Log is the same ... at least it seemed to be when I looked into it. You don't need to graduate. The information alone is worth the price of admission.
Read, and study, everything you can get your hands on that relates to this industry, regardless of what country the information comes from.
Remember, knowledge is power.

Lastly, respect the industry.
If you're in this just for the money, you will win short term, but in the long run it will eat you alive, and in the end you will lose everything you gained.
On the other hand, if you're in this for the long haul (no pun intended), you will start a winner and stay a winner. Just look at the tenures of some of this country's most prestigious carriers. Erb. Robert, Day & Ross, Eassons, Bison, Transforce, and so on. Look where they came from, and it's easy to see where they are going. All of them are where they are today for one basic reason ... they respect the industry.

Just my humble two cents worth for the day :)
 

TRKINSURE

Active Member
15
Thanks for the thoughts everyone. Claims are bad for all of us, no one is generating any revenue while they work on them and they seem to take way too long to settle. Packaging can be an issue and we generally follow a similar protocol to what bellcity outlined when these situations arise.

I have had specific issues with 2 different carriers breaking seals on loads of food grade product, although instructed not to do so in writing on the load tender and being told verbally at the time of booking that the seal had to remain intact. In both instances the claim was rejected by the carrier out of hand and we were forced to process the claim through our own insurance, leaving our insurer to try and recover the payout.

Have any of you had experience with clear well documented claims flat out refused by a carrier? How do you handle it, are you able to register a claim with the involved carriers insurer without the carriers support or do you end up putting it through your own insurance and leaving your insurer to battle it out with the carriers insurer to recover costs? Just curious to know if we are all facing the same types of issues or if it's just me.
You usually have the certificate of insurance for the carrier. Nothing wrong with submitting a third party claim and advising your customer that it is in the hands of the insurer.
I often see a lack of cooperation with carriers and sometimes with shippers who think they can bully people are to paying.
there are only a couple of defences for freight claims if you’re the carrier. Make sure you know what they are and how to use them!!
For load brokers, sometimes it’s worth buying the extra first party insurance (inland marine), on a per shipment basis for those vip clients or vip loads, then you’ll have more control and communication on the claims handling process.

not all adjusters are well versed in freight claims, it’s one of the most complex areas of insurance.

make sure you have a broker or a TPA who you can lean on for advice.
I am also happy to lend my voice for anyone on the forum who has a claim they feel is being handled inappropriately.
 

loaders

Site Supporter
30
We all purchase different types of insurance depending on what our operations might be, asset based carrier, non asset freight broker, freight forwarder, etc. etc. Regardless of the type of insurance, when you do have a problem, question or concern, why not use the service for which you have paid? It seems there is a culture of “ OMG, don’t call the insurance company, our rates will go up”. Well if you have an at fault situation, then yes, that is probably true. However, a legitimate question or need for some advice should not prevent you from reaching out to the “experts” you hire every year through the premiums you pay. It can be a valuable resource, why not use it?
 
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TRKINSURE

Active Member
15
We all purchase different types of insurance depending on what our operations might be, asset based carrier, non asset freight broker, freight forwarder, etc. etc. Regardless of the type of insurance, when you do have a problem, question or concern, why not use the service for which you have paid? It seems there is a culture of “ OMG, don’t call the insurance company, our rates will go up”. Well if you have an at fault situation, then yes, that is probably true. However, a legitimate question or need for some advice should not prevent you from reaching out to the “experts” you hire every year through the premiums you pay. It can be a valuable resource, why not use it?
... and that's the lesson many have learned in hiring a sh*tty broker :).. Stay vigilante and when shopping for a new broker, test them like you would a driver or new employee.
 

bellcitytransport

Active Member
15
^^^ I wish I could "Thumbs-Up" that post like a zillion times !!!
Vet them like they were going to date your daughter !!!
Isn't that the truth.. call around to other carriers who use the broker, get references. Insurance is such a large expense why wouldn't you take the time to listen, get educated and vet them. If you have a fear of picking up the phone and talking to your broker about a claim or a potential claim, then you might have the wrong broker. A good broker, will provide the guidance and information you need.
 

loaders

Site Supporter
30
Exactly, claims are an “accident”, an unfortunate event that in spite of your best efforts, occurs occasionally in our industry. A good insurance broker will understand that concept and although he or she might not be an expert themselves in handling freight claims, they will have the resources and people readily available to do so.
 
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