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

Ensuring performance and managing risk exposure in the transport and delivery of goods

Recording of a 90-minute CLE video webinar with Q&A


Conducted on Tuesday, May 18, 2021

Recorded event now available

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Course Materials

This CLE course will guide counsel in drafting complex transportation agreements governing containerized commercial goods shipping from manufacturers to distributors to retailers both domestically and internationally. The panel will discuss best practices for negotiating contract terms on behalf of carriers, shippers, and brokers and other intermediaries such as freight forwarders and non-vessel operating common carriers, to ensure contract performance and manage risk exposure.

Description

Supply chain management is a crucial component of every business and the need for a robust and efficient provision of supply chain transport services has never been more evident. The transport of containerized commercial goods faces significant legal risks and potential liability in the event of loss, damage, delay, diversion, or non-delivery of 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.

Negotiating transportation contracts that comply with these myriad rules while effectively allocating risk and reducing liability exposure in ways that are accepted in the market require an understanding of the relationship between traditional contract terms and these risk-shifting mechanisms, including regulatory statutes governing contract terms and establishing liability standards. This is especially so in a market where the companies providing logistics services are continuously evolving and the law is subject to change. 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 and their changing roles in the marketplace 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. The shipper may not be aware of terms negotiated between the intermediary and the carrier. Some intermediaries are willing to take responsibility for the actions of the carriers they engage, while many others are not willing to do so. Some by law have the legal status of carriers themselves, even while acting as an intermediary.

Listen as our authoritative panel of transportation attorneys explains best practices for drafting transportation contracts regarding containerized carriage by sea, 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.

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Outline

  1. Critical provisions in transportation contracts
    1. The role of a written contract
    2. Shipping documents: bills of lading, waybills, receipts
    3. Limitation of liability
      1. Statutory restraints on carrier liability limitations: COGSA, Hague-Visby, and the Carmack Amendment
      2. "Himalaya" clauses extending liability limitations to subcontractors indemnity
    4. Insurance
      1. Additional insured
      2. Waiver of subrogation
    5. Limitation or extension of carrier's possessory lien rights
    6. Damages: limitations and exclusions
    7. Rates and payment terms
    8. Minimum volume commitments
    9. Delay provisions and performance indicators (KPIs)
    10. Disputes resolution, choice of law, and forum
    11. Special arrangements for high-value shipments or for commodities that require special handling
    12. Force majeure
    13. Best efforts
    14. Key regulatory provisions
    15. Claims handling procedures
    16. Carrier safety standards
    17. MAP-21 and the role of the intermediary
    18. International considerations
  2. Contract negotiation considerations and best practices for carriers, shippers, and intermediaries
  3. Historical evolution and transformation of domestic property brokers to today's complex 3PL and 4PL logistics industry
  4. Evolution and transformation of international 3PLs such as NVOCCs and their ability to offer and enter into contracts

Benefits

The panel will review these and other priority issues:

  • What federal, state, and international laws and conventions govern transportation contracts?
  • What are the critical provisions that counsel should carefully negotiate when drafting transportation agreements?
  • What are some common contracting pitfalls with transportation contracts, and how can they be avoided or overcome?

Faculty

Danas, Andrew
Andrew M. Danas

Partner
Grove Jaskiewicz & Cobert

Mr. Danas represents clients on a wide variety of general commercial and regulatory issues. He has a specialized...  |  Read More

Kolesar, Andrew B.
Andrew B. Kolesar, III

Partner
Slover & Loftus

Mr. Kolesar represents clients in a wide variety of disputes pertaining to railroad transportation, intermodal...  |  Read More

Rice, Jameson
Jameson B. Rice

Partner
Holland & Knight

Mr. Rice focuses his practice primarily on matters pertaining to the transportation industry, with experience in rail,...  |  Read More

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