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We would like to thank the following members for their generous gifts for our Holiday Party:

Air France Cargo

Blue Water Consolidators

Global Consolidators International

Mallory Alexander International

Rockford Airport

Superior Logistics/Ablaze Transportation

Transportation Employment Specialists

IACAC BYLAW RATIFICATION

(This is an updated bylaw ratification for all the members to see and vote on later.)

Article 5 Section 1.

To read:  The board of directors shall consist of no more than six (6) members, plus the president of the association.  The board of directors will include at least one member of the Air Carriers or an Airline GSA when possible, Forwarding industry, and Other Related industries.

At each annual business meeting the membership of the president shall be elected for one (1) year term to be followed by a one (1) year term on the board of directors (as set forth in Article 4 Section 9.  Directors will also be elected for two years terms as applicable.

Article 5 Section 5.

A majority of members of the board of directors, voting either in person, by telefax,

SITA, telegraph, e-mail, or in writing upon specific business of the board, shall

Constitute a quorum at any meeting of the board.  The board of directors shall hold meetings during the year, upon the call of the chairperson or upon the call of two (2) directors, or by written notice to the chairperson of the board of directors, and the secretary of the association.  Upon proper call of the directors meeting, the secretary shall give at lease seven (7) days and not more than thirty (30) days notice of such meeting to each director, unless such notice is waived. 

Uninsured Cargo Claims: Best Way to Lose Best Customers

 By Norris L. Beren, Risk Reduction Education, Inc.

             Greetings Shipper:  “We regret to inform you that our investigation indicates that we are not responsible for the full value of the damage to your product….”

Since the last leg of any international shipment in America is always by truck, shippers/consignees should always be wary of their expectation regarding the liability of the final delivering carrier for loss or damage to their cargo. The U.S. Supreme Court in 2010 decided a case that overturned the long-standing practice of how a cargo claim is valued.  The case involved an international shipment moving on a through bill from origin to final destination (Kawasaki Kisen Kaisha LTD. v. Regal-Beloit Corp.) by water but the final domestic portion was by truck. 

The court decided that the terms of a through bill (in this case COGSA) would apply to the domestic portion of an ocean freight movement. Therefore, an ocean bill with a release value of $500 per package would apply and not Carmack (full liability for loss or damage) for the truck portion domestically. If the freight bill ended at a port of entry, then a separate freight bill issued by a motor carrier or railroad could have provided full value. 

However, what about air bills—international or domestic? Does Carmack apply to the domestic truck freight portion or the air bill with its release value?  This is a question that has come up many times and arises so often. This is because of the failure of shippers to communicate and the failure of transportation arrangers (CHB’s, 3PLs, NVO’s, etc) to ask about valuation or to properly fill out the origin document with a value declaration when it is important to do so. 

In a recent case, the shipper’s agent, handling three containers of auto parts from Korea to Atlanta, never declared a value, but there was insurance purchased for the water portion of the transportation.  When the shipment arrived at the container yard in Atlanta, the motor carrier received its normal e-mail with the container numbers to pick up and deliver to the auto plant in Georgia.  On the way to the consignee, one truck was involved in a crash and the entire load (one container) was destroyed.  The motor carrier’s insurer, following the intermodal through bill to point of destination, argued that because there was no declared value on the bill that only the release value applied providing significantly less recovery than the full value of the load. Subsequently, a replacement shipment was tendered by airfreight with a substantial freight charge that was also not covered by insurance.   

The motor carrier was caught up in this claim because it had no documentation, contract, load confirmation or other method to prove that it was responsible for Carmack (full) liability.  That was its customer’s expectation and final demand.  

Naturally, the motor carrier did not want to lose a customer that provided many millions of dollars of transportation annually for the motor carrier so it decided after weeks of agony, dispute, yelling and screaming that the best course of action was to pay all of the uncovered charges including his deductible. 

Our advice to that motor carrier and all parties to these international moves, whether by air or water, is to ask about valuation and document, document and document the transaction. The question of whether Carmack liability applies to air movements for the truck portion in the U.S. is unclear but if you are part of these international transportation transactions, you should check with your insurer to determine your liability under various scenarios. Always ask the shipper or arranger about valuation requirements. 

A final recommendation is to offer training to key employees to become more familiar with the issues involving strategic procedures for cargo loss and damage claims prevention, management and documentation processes.