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INDEX OF CLAIMS PROCEDURES FOR MOTOR TRUCK CARGO

1. Overview of Motor Cargo

a. Law Prior to ICC Termination Act of 1995

b. Effect of ICC Termination Act of 1995

c. Applicability of Carmack Amendment to Goods in Storage

2. Sources of Motor Cargo Claims Rules

3. Filing a Motor Truck Cargo Claim

4. Motor Cargo Limits of Liability

5. Motor Cargo Notice Requirements

 

Overview of Motor Cargo Law

Law Prior to ICC Termination Act of 1995

The provisions of the Carmack Amendment provided for liability of common carriers under receipts and bills of lading, were applicable only to common carriers subject to the jurisdiction of the former Interstate Commerce Commission. Since the Motor Carrier Act of 1980 removed the words ``other than a motor common carrier'' from the definition of motor contract carriers and since a carrier could carry property in both capacities in the same vehicle, there may have been an issue as to whether a contract carrier was a common carrier for liability purposes under the Carmack Amendment provisions. This depended on the nature of the ``holding out to the public.'' The provisions concerning mixed loads also created an anomaly for liability purposes. Part of the load could be subject to Carmack and part, the exempt property, not subject to Carmack.

Effect of ICC Termination Act of 1995

The Carmack Amendment provisions in the Termination Act are stated separately for motor carriers and freight forwarders. All motor carriers subject to the jurisdiction of the Secretary of Transportation must register with the Secretary. There are no provisions for a permit to be issued to a contract carrier. Motor carriers who are registered may also engage in contract carriage.

In relation to surface carriers, the Termination Act has done away with the term ``common carrier'' in those provisions which concern motor carrier liability for cargo. The act concerns ``motor carriers'' and ``freight forwarders.'' Nevertheless, such ``rail carriers,'' ``motor carriers'' and ``freight forwarders'' who are subject to the jurisdiction of the Secretary of Transportation have the same liability formerly attributed to common carriers.

49 U.S.C. § 14706, Liability of carriers under receipts and bills of lading is applicable to a carrier providing transportation or service subject to jurisdiction under subchapter II (motor carriers) or III (freight forwarders) of Chapter 135. General jurisdiction provisions are contained in 49 U.S.C. § 13501, which grants the Secretary of Transportation and the Board jurisdiction over ``motor carriers.'' A motor private carrier is one other than a ``motor carrier.''

Applicability of Carmack Amendment to Goods Held in Storage Following Transportation

It has been held that the liability of a motor common carrier for loss or damage to goods held in storage following interstate transportation is subject to the Carmack Amendment. The intent of Congress was to legislate limitations on liability with respect to services generally performed by a common carrier and not to limit the legislation to damage incurred while articles were actually being moved.

Furthermore, ``transportation'' is defined in the Interstate Commerce Act to include the use of a ``warehouse'' or instrumentality of any kind related to the movement of property regardless of ownership or an agreement concerning use. Clearly, Congress intended transportation to extend to storage facilities.

Sources of Motor Cargo Claims Rules

Motor carriers and freight forwarders who are subject to jurisdiction under the ICC Termination Act of 1995, and who transport property pursuant to receipts and bills of lading, are liable to the person entitled to recover thereunder for ``the actual loss or injury to the property.'' Look to carriers bill of lading, tariffs, rules and regulations for claim rules.

The Carmack Amendment permits the carrier to limit its liability for loss or injury to property transported ``to a value established by written declaration of the shipper or by a written agreement between the shipper and the carrier. The value may be established additionally by electronic declaration of the shipper and the value established must be reasonable under the circumstances surrounding the transportation.

Filing a Motor Truck Cargo Claim

Make immediate inspection of each package before signing delivery receipt. Take proper exceptions on the delivery receipt in respect to all loss or damage existing at the time of taking delivery. It is most important that exact exceptions be taken in writing on the delivery receipt as to the conditions of the consignment and a copy of the delivery receipt must be retained for your claim file. Take photographs where applicable.

Contact a surveyor to assess the loss/damage immediately. The consignee should promptly notify a surveyor as soon as loss or damage is discovered. The consignee should refer to the back of the original certificate or call the Insurance company for a surveyor in their area. They may also use any surveyor who is approved by Lloyd's of London or the American Institute of Marine Underwriters. Surveyors are neither settling agents nor affiliated with the insurance company. Rather they are independents who report the facts to the insurance company and have the responsibility to determine the amount of loss. Usually the insurance company will pay surveyors directly for their services. However, in situations where a surveyor requires up-front payment, the insurance company will reimburse the claimant. Contact the Insurance Company immediately. In addition, a letter notifying the Insurer of the claim is required.

Verify that the seal numbers on marine containers match the document numbers. Also be alert when a seal is broken to the possibility that cargo may have been pilfered. Retain all products and packing until you are advised otherwise by the Insurance Company.

Notify delivering carrier of any shipment damage immediately and have a representative come out to inspect and write a damage report. Write to all carriers placing them on notice of claim. There are statutes of limitation to notify the carrier of loss, damage, or non-delivery. Retain all copies of the shipping documents. Generally the following documents will be required to settle a claim:

1. Proof of Insurance: Declaration Form or Original Certificate

2. Commercial Invoices

3. Non-negotiable copy of bill of lading or air waybill (front and back)

4. Claim Statement (an itemization of loss/damage claimed).

5. Copy of letter(s) to carrier(s) giving notice of claim.

6. Carrier's reply(s) if any.

7. Delivery receipts with exceptions noted.

8. Photographs (when applicable).

9. Survey report (when applicable).

10. Packing List.

11. Repair estimates (when applicable)

Additional documents may be requested at a later date.

Also, many carriers require that claimant use the "Standard Form".

Always ask the carrier for a copy of their claim claims procedure manual, tariff, and bill of lading.

Motor Cargo Limits of Liability

Liability limits "must be reasonable under the circumstances." A release value based on commodity classification / tariff such as the National Motor Freight Carrier Tariff uses a mixture of "class," weight and value to determine a release rate. Some carriers have elected to use a set rate of $0.50 per lb.

Motor Cargo Notice Requirements

Section 49 U.S.C. § 11707 also prohibits contractual limitations of time to give notice of claim to a period of less than nine months and to commence an action against the carrier to a period less than two years from the date the carrier disallows a claim. It contains indemnity provisions concerning the right of a carrier held liable to recover from the carrier over whose line or route the loss or injury occurred, etc. The ICC Termination Act of 1995 incorporates such changes. See 49 U.S.C. §§ 11706 (rail carriers), 14706 (motor carriers and freight forwarders) (1995).

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