Drafting Transportation Contracts: Negotiating Key Terms in Shipper, Carrier, and Broker Agreements

Description

Businesses involved in transporting commercial goods face significant legal risks and liability in the event of loss, damage, delay, diversion or non-delivery of the goods. Counsel advising these carriers, shippers, and intermediaries must understand a wide array of federal, state, and international transportation laws, which vary substantially by mode of transportation, and negotiate transportation contracts that comply with these myriad rules while effectively allocating risk and reducing liability exposure in ways that are accepted in the market.

Indemnification and limitation of liability provisions are key risk-shifting provisions in transportation agreements, as are insurance requirements, which can include specialized insurance provisions to cover reasonably foreseeable losses, coverage of an additional insured, and waiver of subrogation rights. Understanding the relationship between these risk-shifting mechanisms is critical to maximizing coverage and managing risk. Other essential provisions in transportation contracts include service rates, payment terms, performance obligations, damages, best efforts, force majeure, confidentiality, and more.

The expansion of the use of intermediaries adds its own set of complications, because the shipper and carrier are not negotiating with one another. Terms negotiated between the shipper and intermediary may not be passed down to the carrier, and the shipper may not be aware of terms negotiated between the intermediary and the carrier. Some intermediaries are willing to take responsibilities for the actions of the carriers they hire, while many others are not willing to do so.

Listen as our authoritative panel of transportation attorneys explains best practices for drafting transportation contracts pertaining to carriage by ocean, truck and rail. The panel will provide strategies for counsel to carriers, shippers, and intermediaries to avoid common contracting pitfalls when negotiating terms to minimize the risk of loss, damage, or non-delivery of commercial goods.