Preventing, Mitigating, and Defending Cargo Loss Claims

Description

The global supply chain crisis, paired with the continuing challenges of the pandemic, means motor carriers, cargo brokers, freight forwarders, and shippers are experiencing a significant increase in claims related to delay and cargo damage.

Loss, damage, and delays cost shippers millions of dollars every year including loss of sales and profits, supply chain interruptions, and damage to customer relations, so shipper (and broker) contracts typically focus on being fully compensated and reimbursed for their losses. Carriers naturally want to limit their exposure and liability for claims to protect their own interests.

Certain provisions of transportation agreements should be carefully considered in light of these issues. Force majeure clauses have increased importance because they can help transportation providers protect themselves from claims when circumstances beyond their control preclude performance or delay performance. The traditional force majeure defenses of an "act of God" and "act of government" may not be enough to mitigate the unforeseen consequences of the supply chain logjam or COVID-related delivery rejections and losses. Carrier counsel must tailor contract provisions to provide the appropriate protections.

Transportation providers should know that market shifts and increased operating costs do not protect against non-performance. Likewise, the proper documentation is a prerequisite to asserting certain defenses to cargo claims, such as time limitations and limitations of liability, and for recouping the cost of collecting freight charges.

Maintaining federal preemption is critical to the protection of motor carriers in cases involving cargo loss or damage, and several recent decisions have preserved that right.

Listen as our authoritative panel discusses the best practices for addressing carrier and transportation agreement concerns and amending those agreements to ensure coverage of cargo loss claims.