In UPS v Megatrux Trans, Inc., (May 8, 2014), the Cou
In UPS v Megatrux Trans, Inc., (May 8, 2014), the Court held that a broker may contract with a shipper to limit the broker’s liability for cargo loss/damage, AND, may contract with a carrier for indemnification in an amount over the limitation of liability in their contract with the shipper.
In short, the Court did not allow the carrier to have the benefit of the limitation of liability in the contract between UPS and the shipper, AND, allowed UPS to subrogate on their settlement with the shipper, sue the carrier for a much larger amount and collect all damages.
Net effect, is that carriers shoul
rt held that a broker may contract with a shipper to limit the broker’s liability for cargo loss/damage, AND, may contract with a carrier for indemnification in an amount over the limitation of liability in their contract with the shipper.
In short, the Court did not allow the carrier to have the benefit of the limitation of liability in the contract between UPS and the shipper, AND, allowed UPS to subrogate on their settlement with the shipper, sue the carrier for a much larger amount and collect all damages.
Net effect, is that carriers should not agree to indemnification of broker or shipper for full cargo loss amount where there is available a limitation of liability between broker and shipper.
But from broker’s perspective, they should always seek limitation of liability from shipper as well as indemnity from carrier. Thereafter, it becomes a matter of leverage…or carpe diem for the party with the most leverage.