Paul Stewart BBA, MA, JD
Logistics and Transportation Law/Commercial Transactions- Representing National Logistics Companies, Shippers and Carriers; Mergers and Acquisitions; General Corporate Counsel
1. First, and foremost, if you are a broker of transportation (truck, intermodal, etc) you cannot leave any doubt with your shipper as to whether you will accept ultimate liability for cargo loss or damage. Courts have held that such doubt is sufficient to hold the broker responsible, based upon past practice.
2. If you “process” claims, make sure your shipper understands that limited role, and the party who has responsibility for properly and timely filing the claims. Recent decisions have held broker liable for insufficient filing information, failing to file claim timely and failure to advise shipper of the limitations period on filing suit, should the claim be denied.
3. Understand that you as a broker have no legal/ownership interest in the claim, without a written assignment of the claim from the owner of the cargo.
4. If you do not have an assignment of the claim, the claim form should reflect that the claim is being filed on behalf of the owner of the cargo…and not in your name as the broker.
5. If your shipper expects to recover the full invoice value of all claims, you should be careful in your broker-carrier agreement to hold the carrier responsible for the value of the cargo and not just the limit on carrier’s cargo insurance.
Much more could be said about the many intricacies of cargo claims “processed” by brokers/3PLs, but in a nutshell, the duties and responsibilities for cargo loss or damage must be clearly indicated in the shipper/broker and broker/carrier agreements and practices.