Contracts

ShawnR said:
@martinetav - WHAT?!?! No I was giving you some advice, not telling you what to do. My comment had nothing to do with what you do or don't control as carriers.

We review many contracts, and we also see many issues where people weren't careful and they got caught (either between broker & carrier or shipper & broker/carrier).

How could you possibly have taken my comment in a negative manner?!?

And @Canadian Bacon - this has nothing to do with being a carrier or a broker, it's simple business, you don't send out pre-signed contracts and you don't work with someone who doesn't send back their signed part of the contract... it has absolutely nothing to do with the transport industry...
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Sorry ShawnR You misunderstood my response. I appreciate your comeback. I was making reference to the fact that if we waited for a signed copy we would not be able to work at all if we only worked with companies that return signed contracts. It's only ever happened once in my lifetime... not even CHR , TQL and other very prominent companies... I used to ask for a copy signed by them. Never, ever got one. I do keep a copy of what I sign though.
 
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martinetav said:
Sorry ShawnR You misunderstood my response. I appreciate your comeback. I was making reference to the fact that if we waited for a signed copy we would not be able to work at all if we only worked with companies that return signed contracts. It's only ever happened once in my lifetime... not even CHR , TQL and other very prominent companies... I used to ask for a copy signed by them. Never, ever got one. I do keep a copy of what I sign though.
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oh ok yeah that makes sense now sorry lol
 
It is not often that I would question or disagree with Michael Ludwig, but this is a case where I must. I too, was under the assumption that a carrier did not have to entertain a freight claim unless the freight bill was paid. That is incorrect. The freight bill and the freight claim are 2 separate issues. The carrier is obligated to respond to a freight claim, as part of the contract of carriage, regardless if the freight bill has been paid or not. The freight charges are a different matter, not somehow linked to the freight claim and if they go unpaid, the carrier is certainly able to pursue legal action to collect them. As a member, I receive the monthly newsletter from the National Transportation and Logistics Council in the US and recently there were comments about this. I will research further and provide the link for fellow members of this site.
 
Freight claims have nothing to do with payments for services rendered. Nonpayment for services does not excuse the carrier from dealing with the claim.
 
If the transaction for the freight carriage is not paid, why would the claim be paid by the carrier or their insurance? I would have to say that until freight is paid your claim can be "excused" until freight charges have been paid in full. Think of the fraud that could happen if freight claims were paid before freight charges (a receiver gets paid for freight they claimed against a carrier and didn't have to pay the freight charge cost associated with the freight movement and the receiver gets the benefit from insurance of the lost goods, yeah right) ...unless some can prove otherwise I am still under the impression and have been told by our insurance agent in the past that all freight charges should be paid prior to paying out a claim whether direct from the carrier paying or the insurance company representing them depending on the value. I think if you go to a carriers insurance company direct they would verify that with the carrier (their customer) as well they were paid for the freight movement transaction first before paying out to the receiver....my 2 cents for the day
 
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Still trying to dig it up and I need a young staff member to show me how to get it from an e-mail onto this site. It has been and continues to be industry standard, for carriers to request a copy of the paid freight invoice to accompany any claim for freight damages. Just as a shipper or broker is legally obligated to pay legitimate freight charges regardless if there is a claim or not, a carrier is legally obligated to respond to a legitimate freight claim regardless if the freight charges have been paid or not. Connected yes, but still 2 different matters with different means of resolution. Bear with me, and remember like all things legal, there will always be room for interpretation.
 
I know that all the big boys have in their terms and conditions that all freight charges must be paid before they even begin to process a claim. I believe that the claimant can then add those freight charges in their claim and the carrier will re-reimburse those charges if the carrier feels it is valid once the claim is satisfied. We try to set the same policy but for some of our "nicer" customers where we know they are good for it, we don't put them through the headaches.
 
I and most carriers take the position that the charge (or premium) for standard cargo insurance is included in the cost of moving the freight. If the freight bill is not paid, then neither is your insurance premium. And just like your car or house insurance, if the premium is not paid before you submit the claim you are out of luck.
Yes, claimant can include the cost (or partial cost) of the freight in their claim.
Why should full freight charges be withheld over damage or loss to a few cartons?
If it is small claim with a big customer you may decide to waive and keep your customer happy.
If it is a huge claim, then your insurance company will deal with it and not be afraid to upset your customer over a legal technicality.
Different rules and time frames apply to either full or partial loss. When in doubt talk to your insurance agent.
 
Transportation charges have nothing to do with claims. In some cases it makes sense not to pay the carrier anything for transport.. like the time my truck picked up a coil in GA and 50 miles down the road lost it on the side of the road. The coil was a write off and never made it to within 1000 miles of the receiver. And even if it did.. what value is there in the delivery of worthless scrap instead of the pristine coil the receiver was expecting? In some cases it makes sense to pay the carrier anyway.. where damage is minimal, the receiver has accepted the load, and the receiver is able to use the product. Sometimes (as above) the transportation charges go to zero and the carrier remains responsible for the settlement of claims.
 
Please see the following link to the HTA that would seem to suggest that the freight charges must be paid before the claim can be processed.

http://www.ontario.ca/laws/regulation/050643#BK6

Click on Schedule 1 for General Freight

Number 12 "Notice of Claim" states: "The final statement of the claim must be filed within nine months after the date of shipment, together with a copy of the paid freight bill."

Also, I would agree with other members here that, in practice, our insurance company always confirms with us that we have been paid for the freight charges before they will pay out the claim.
 
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I don't think so.. what if we agree on $2000.00 for a load from Cincinnati to Montreal. 50 miles into the trip the truck rolls over and my precious load is all over the interstate, completely damaged and worthless. I should still pay you the 2K ?
 
Freight Broker said:
I don't think so.. what if we agree on $2000.00 for a load from Cincinnati to Montreal. 50 miles into the trip the truck rolls over and my precious load is all over the interstate, completely damaged and worthless. I should still pay you the 2K ?
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Correct sir. I dealt with a similar scenario recently.

We had an accident claim where the cargo was destroyed. Our insurance company specifically checked with me to ensure we had been paid for freight charges before they would process the claim for the damaged cargo.
 
I had a write off October 2010. I didn't pay the carrier for the freight and the claim was paid in full by the insurer within 60 days of the event. Same deal two years earlier with another load. I'm guessing your insurer may simply want to know if any monies were paid to you on the load as that amount would be offset against the claim.
 
That's exactly what I wrote in my last post..part of the claim. So if the broker is dumb enough to pay for services not rendered then that paid amount gets deducted from what the insurer pays out for the claim.
 
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Exactly! Whatever costs that might have been paid previously thereby reducing the total claim, are of the utmost importance to the insurer.
 
so here is an example; carriers loads at shipper, leaves, goes down the first road which is a steep hill and rolls it at the bottom of the hill... what then? you would pay the full rate for Wisconsin to Ontario?
 
ShawnR said:
so here is an example; carriers loads at shipper, leaves, goes down the first road which is a steep hill and rolls it at the bottom of the hill... what then? you would pay the full rate for Wisconsin to Ontario?
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Yes sir, if you want to have the damage to the cargo covered, that is.

Some of you are missing the point. Please click on the link I provided and read it. We live in a society of rules (laws) and in this case the rules are clearly laid out. Although in practice the law may not always be followed, if one of the parties chooses to, they can take the matter to court where the law will prevail...

Ironically, in the example I provided previously: I mentioned that my insurance company checked with me to ensure I was paid for freight. They told me the reason for the question was that "there is no valid claim until the freight has been paid", it is part of the claims process.

Here comes the ironic part... Although the customer in this case had to pay me for the freight charges, the same customer (who owned the freight) was able to claim for "re-delivery" charges, meaning they get the freight charges they have paid back as part of the claim. For the claimant, the freight charges were a wash.
 
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The Law dictates that the CARRIER is legally entitled to their freight invoice being paid regardless of damaged goods. Here it is spelled out:

1) Original freight invoice is Paid to carrier and this total gets added to the total claim filed against the Carrier and their insurance company
2) The replacement shipment is billed AGAIN and this is also paid to the carrier from the customer (beneficial owner of the goods)
3) When/if the claim is paid the customer gets their claim amount which includes the damaged goods AND the 1st freight charge so even though there are "Two" shipments the customer only "Pays" for 1 which they would have had to do anyway.

PS...fastest way to NOT get paid for a freight claim is NOT pay the freight invoice.
 
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