Transportation and Logistics Law: Who Pays for Your Cargo Loss?

Cargo damage, loss, and delivery failures create legal claims against the carrier, freight forwarder, or logistics provider depending on which party had custody of the goods when the loss occurred. A shipper that discovers cargo damage or loss must document the condition of the goods and submit a written freight claim within the time period required by the bill of lading or applicable statute.

Logistics transport and shipping dispute counsel can advise on the specific cargo damage and delivery failure issues and develop the freight claim and carrier liability strategy.

Domestic transportation disruptions can delay delivery of time-sensitive cargo and create carrier liability if the delay was caused by carrier negligence rather than an excused event. International shipping disruptions are more complex because they can involve multiple carriers and customs agencies, and the applicable liability framework varies depending on the mode of transport.

Logistics contracts and commercial contracts counsel can advise on the specific freight liability category and develop the transportation and logistics risk management strategy.

International shipping and supply chain disruptions counsel can advise on the specific shipping disruption issues and develop the shipping liability strategy.

A bill of lading is both a receipt for the goods and a contract of carriage that defines the carrier's obligations and liability limits, and its terms control the rights and remedies of the shipper unless superseded by mandatory statute or international convention. Freight agreements typically include limitation of liability clauses that cap the carrier's liability at a per-unit amount far less than the actual value of the cargo.

Logistics contracts and commercial contracts counsel can advise on the specific freight contract terms and develop the freight responsibility allocation strategy.

The Carmack Amendment establishes the framework for domestic truck and rail carrier liability and provides that a carrier is liable for the actual loss or damage to goods, with the burden on the carrier to prove that the loss resulted from an excepted cause. For ocean cargo, the carrier's liability is limited to five hundred dollars per package, and for air cargo the carrier's liability is limited to approximately nineteen special drawing rights per kilogram.

Admiralty and maritime law and maritime litigation counsel can advise on the specific legal rules applicable to the loss, damage, and delay claims and develop the freight claim and carrier liability strategy.

A freight claim for cargo loss or damage must be filed in writing with the carrier within the time period specified in the bill of lading or applicable statute, and a claim that is not timely filed may be barred even if the carrier is clearly at fault. The claim must specify the amount of the loss and provide supporting documentation including the commercial invoice, packing list, and evidence of the damage.

Claims for monetary damages and shipping dispute counsel can advise on the specific cargo loss and freight damage claim elements and develop the freight claim filing and recovery strategy.

Transportation and logistics contract disputes most frequently arise from disagreements about which party bears responsibility for a loss, and these disputes can be resolved through negotiation, mediation, arbitration, or litigation. A shipper that cannot resolve a freight claim through negotiation can file suit under the Carmack Amendment in federal court, which preempts state law.

Commercial litigation and business dispute counsel can advise on the specific contractual and liability dispute resolution options and develop the transportation dispute resolution strategy.

An effective freight agreement should define the carrier's liability limits, require the carrier to maintain adequate cargo insurance, specify the claim filing requirements, and include favorable dispute resolution provisions. A well-drafted freight agreement can also include indemnity provisions that require each party to indemnify the other for losses caused by its own negligence.

Logistics contracts and freight forwarding counsel can advise on the specific freight and shipping agreement requirements and develop the freight contract drafting strategy.

Transportation companies operating across multiple jurisdictions must comply with the licensing and insurance requirements of the Federal Motor Carrier Safety Administration, the customs compliance requirements of Customs and Border Protection, and the sanctions compliance requirements of the Office of Foreign Assets Control. Failure to comply can result in civil penalties, loss of operating authority, and seizure of cargo.

Import and trade compliance and customs compliance and enforcement counsel can advise on the specific cross-jurisdictional regulatory compliance requirements and develop the transportation regulatory compliance strategy.