Carmack Amedment and freight originating in the US

Pablo

Pablo

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Jan 25, 2008
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Mississauga, Ontario
www.igosalesandmarketing.com
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I have a situation where I have a high value claim. Here are the facts:

1. Freight orginated in US and travelled on US Bol.
2. Carrier is Canadian.
3. There is a claim on the freight.
4. Shipper did not declare a value on the BOL

Carrier is stating that because the shipper did not declare a value they will only cover 50 cents a pound.

It's my understanding that freight originating in the US is subject to the Carmack Amendment which specifically says that freight is insured for the full value unless shipper declares a lower value, or agrees in writing or by electronic means with the carrier for a lower valuation in exchange for a discount.

There have been no such agreements.

Has something changed, or am I right that the carrier is liable for the full value of the shipment?
 
Pablo you are correct the carrier is on the hook for the full amount, talk to their insurance company directly.
 
Would or could a declared value on a "customs invoice" not be considered a declared value if the document had been given to the carrier and/or their representative/driver?
 
Pablo, why is the carrier accepting liability for only 50 cents per pound? Are the goods "used machinery"? Regardless, if the freight originated in the US and the Bill of Lading was prepared there, the carrier should be responsible for the full amount. The value of the shipment will be indicated on the Canada Customs Invoice. If you have contingency cargo insurance, perhaps the provider of that policy could assist you. Good luck!
 
thanks everyone

I don't know where this 50 cents a pound came from. Thanks for the tip about the customs invoice though, I'm sure that will help my case.

The carrier is difficult to deal with at the best of times. If I said their name you would probably all know what I'm up against. I'm not trying to slag them though, just make sure I'm on as firm ground as I think I am with this claim.
 
I actually believe the standard is $2.00 per lb. and if the freight is worth more it would have to be disclosed, or the carrier is limited to that.

Chances are the carrier doesn't have more than $100K cargo insurance anyway.
 
This has been proven over and over again .....as mentioned by lowmiler...shipments INTO Canada are covered by the Carmack Amendment. Carrier is responsible for the full value of the goods as noted on the Customs documents.


Promptly file the claim directly against the Carrier's Insurance Company. Sounds like your discussion is with someone at the Carrier who does not fully understand this. You sure will get immediate attention to this matter when the Insurance Company gets involved.
 
Just one more thought on this. Based on a past experience I had with a US shipment, yes the carrier's insurance company paid the full value - less - the carrier's deductible. After months of trying to get the $2500.00 (I think it was either 2.5 or 5K), we eventually had to pay it to the shipper ourselves. The insurance company was of no help to us in re-couping the deductible.
 
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Carrier Liability

:cool: Hopefuly this shows more carriers the liability they have coming in from the U.S..... perhaps think twice before moving that $50,000 skid for $250 bucks... just a thought.
 
Response to "theman" posting...

The $2.00 per pound declared value only applies to shipments originating from Canada destined too the United States. Declared value has it's own "rights" ...

Whenever a declared value is noted on a bill of lading, the Carrier is responsible for the full amount of the value of the goods as per the Customs invoice. Majority of Carriers charge 1% as a declared value surcharge for this (note - each Carrier is different) and majority of Carriers contact their Insurance Company when moving a declared value shipment. Remember, if there was a claim, the first thing the Insurance Company looks at is the bill of lading to see if the declared value is noted. If a declared value is noted, the standard $2.00 per pound would not apply.

This is something that is coming up more often and my suggestion is for Carriers to review this with their Insurance Company. I find that "front line" dispatch do not understand declared value versus cargo insurance.

Note - in reviewing cargo insurance....this is also something to review with Dispatch. Remember...carrier has X amount of cargo insurance and if the trailer and goods were completely destroyed..the cargo insurance is per occurence/trailer...so.....let's say there was a load of LTL worth $250,000.00 and Carrier only had $200,000.00 cargo...there is a void of $50,000.00....payout would be pro rated on $200,000.00 versus the actual dollar amount on the trailer.

Remember the days when we had a trailer full of LTL - there was a "consolidation sheet" showing the total value of the goods on the trailer. Now, we never ask the value of the goods........
 
I don't believe the customs docs are any use when filing a claim against a carrier. The BOL takes precedence and whatever is on it rules. I believe the interpretation is that the carrier is liable for full value IF the released value is stipulated on the BOL at no charge. If the value is greater than $25/lb the carrier has the right to add an insurance charge or re-rate based on the high value. If a declared value is not stated on the BOL standard value is $2/lbs....my 2 cents. Stating that....you always get better results fighting (dealing) directly with the insurance company. been my experience anyway.
 
Claim - bill of lading versus customs docs.

What we have found is that Shippers "inflate" the value noted on the bill of lading versus the duty that would be paid as per the customs documents.


As you can see and as Packrat noted, Carriers need to protect their interests and should review this with their Insurance Companies. There is a lot of good information (experienced information) with this thread and Carriers should do their dilgence.

Terrific subject...thanks to everyone's input.
 
Standard B/L

As per our insurance company :

If there is a standard bill of lading that clearly limits the value of the insured goods at the standard $2.00/lb , and there is a location on the bill of lading that clearly allows for the Declared value of the shipment , and this is not filled out. The limit is $2.00/lb.

If there is a flimsy little b/l with nothing noted and you have customs documentation with the actual value, you are responsible for the actual value.
 
As I read it the $2 per pound rule does not apply to shipments originating in the US. However, if the broker has the knowledge that this is a "high dollar" load and fails to inform the carrier as such is that a possible defence for the carrier? There is a clause in the amendment regarding "declared value premium", where a carrier can offer a lower rate for limited liability exposure. If the broker is the one negotiating with the shipper and fails to act on this, can the trucking company still be liable? Hmmmmmmmm?
 
As the carrier still ultimately takes possession of the goods, I believe that falls under "due diligence" and the carrier should be asking that question each and every time before accepting a shipment.
 
Okay, I understand. But how does one find the "true" value of the goods? It sure isn't from the commercial invoice.
 
It was my experience in a past US freight claim, that the insurance company did use the Customs Invoice to determine the "true value" of the goods. The shipper tried to inflate the value initially with the insurance company but once they saw the value declared to customs, that is what was paid out. As a side note, it is very unfortunate that more members of this site did not attend the recent NTBA meeting that dealt exclusively with this exact discussion.
 
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If the value declared on a bill of lading is higher than the value declared on the Commercial Invoice, and if Revenue Canada finds out, then they would be right to assume that the declared value has been artificially lessened to lower duties and taxes. That is called tax evasion and what a mess this could create. What would be the implications for the carrier that got involved in this?
 
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