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

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 transportation of freight and other 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 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 requires 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 the 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.