Understanding the Cargo Claims Process

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Understanding the Cargo Claims Process

• Randall K. Roonan, Esq.

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GRAHAM, MILLER, NEANDROSS, MULLIN ROONAN, L.L.C.
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TRAINS, PLANES AND AUTOMOBILES

• MODES OF TRANSPORTATION
• Air - International and Domestic
• Ocean
• Inland
• Intermodal
• All of the above.

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DUTIES OF THE CARGO OWNER IN THE EVENT OF LOSS OR
DAMAGE

• Take written exceptions
• Record number and condition of seal
• Report the damage
• Mitigate the Loss
• Arrange a survey
• Send prompt written notice of loss.

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NOTICE OF CLAIM TIME REQUIREMENTS

• Airlines - International
• Damage - 7 days
• Delay - 14 Days
• Non-Delivery - 120 Days
• Airlines - Domestic Varies.
  Determined by Air bill and Tariffs

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NOTICE OF CLAIM TIME REQUIREMENTS

• Rail, Truck Surface Freight Forwarders 9
  months from delivery
• Ocean None

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CONTENTS OF NOTICE OF CLAIM

• Claim must be in writing
• Must contain sufficient information to identify
  the shipment
• Must assert liability against the carrier
• Must make claim for a specific or determinable
  amount.

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CLAIM LETTER FORMAT
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DOCUMENTS THAT DO NOT CONSTITUTE NOTICE

• Joint Inspection Reports
• Bad Order Reports
• Appraisal Reports of Damage
• Notations of Damage or Shortage on Freight Bills
  or Delivery Receipts
• Inspection Reports
• Preliminary Notices
• Notice That Insurance Company Will Contact
  Carrier

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DOCUMENTS THAT SHOULD BE SUBMITTED WITH CLAIM

• Bills of Lading From Origin to Final Destination
• Suppliers Invoices
• Packing Lists and Manifests
• Government Inspection Reports
• Monitoring Tapes and Logs
• Delivery Receipts
• TIRs

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TRAILER INTERCHANGE RECEIPT
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DOCUMENTS THAT SHOULD BE SUBMITTED WITH CLAIM

• Exception Reports
• Dock Receipts
• Seal Reports
• O,S D Reports
• Warehouse and CFS receipts
• Cargo Survey Reports
• Joint Survey Requests
• Salvage Bids and Receipts

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Additional Ocean Documents

• Loading Surveys
• Mates Receipts
• Stowage Plan
• Ships bridge, deck, reefer, bilge and engineers
  log
• Hatch Survey
• Discharge Survey

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Create A Paper Trail
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DEADLINES FOR FILING SUIT

• INTERNATIONAL AIR 2 years from date of
  delivery.
• DOMESTIC AIR Varies - Determined by Air bill
  and Tariffs.
• RAIL, TRUCK SURFACE FREIGHT FORWARDERS 2
  years and 1 day from the date of disallowance.

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DEADLINES FOR FILING SUIT

• OCEAN 1 YEAR FROM DATE OF DELIVERY

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CARRIER LIABILITY

• The Concept of Virtual Insurer
• Common Law
• Statutory Modifications

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CARRIERS LIMITS OF LIABILITY

• AIR - INTERNATIONAL
• Old Warsaw - 9.07 or 20.00 per kilo
• Montreal Protocol 4 - 17 SDRs or
  approximately 22.00 per kilo
• AIR - DOMESTIC
• Varies, determined by air bill and tariffs.

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CARRIERS LIMITS OF LIABILITY

• OCEAN 500.00 Per package or customary freight
  unit.
• RAIL, TRUCK SURFACE FREIGHT
• FORWARDER Can limit their liability if proper
  measures are taken.

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SURFACE TRANSPORTATION

• Railroads
• Motor Carriers

• International
• Interstate
• Intrastate

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SURFACE CARRIER STATUS

• Common Carriers
• Contract Carriers
• Freight Forwarders
• Freight Brokers
• http//safer.fmcsa.dot.gov/

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INTERSTATE SHIPMENTS

• Interstate Commerce Act
• The Carmack Amendment of 1906 49U.S.C.11706
• ICC Termination Act of 1995

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HUGHES TEST

• TO LIMIT ITS LIABILITY A CARRIER MUST
• 1. MAINTAIN AN APPROVED TARIFF
• 2. OBTAIN AN AGREEMENT WITH THE SHIPPER BASED
  ON A CHOICE OF LIABILITY
• 3. GIVE THE SHIPPER AN OPPORTUNITY TO CHOOSE
  BETWEEN LEVELS OF LIABILITY AND
• 4. ISSUE A BILL OF LADING PRIOR TO THE SHIPMENT.

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INTRASTATE SHIPMENTS

• Common Law
• Statutory Regulations

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International Considerations
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AIR CARRIAGE

• INTERNATIONAL Governed by The Warsaw Convention
  as amended by the Montreal Protocol.
• DOMESTIC Governed by Federal Common Law.

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THE WARSAW CONVENTION

• What is it?
• When does it apply?
• The Old Convention.
• Montreal Protocol No. 4.

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Montreal Protocol No. 4 Changes

• Old Convention
• Air waybill requirements
• Errors in piloting and navigation defenses
• Intentional Acts.

• Montreal Protocol
• Allows for electronic documentation
• Limits unbreakable
• New limit based upon SDRs

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Further Montreal Changes

• Errors in piloting defense eliminated
• Willful misconduct exception eliminated.

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HAGUE PROTOCOL

• 1929 Warsaw Convention ratified by U.S. in 1934
• 1955 Hague Protocol anticipated to be adopted by
  U.S. in November 2003
• 1975 Montreal Protocol 4 adopted by U.S. in 1999

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THE HAGUE PROTOCOL

• Time Limits extended 14 days for damage 21
  days for delay
• Intentional Acts exception restored

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Domestic Air Shipments

• Airline Deregulation Act of 1978
• Federal Common Law
• Contractual rights
• Rubber flights and deviations

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Ocean Transportation
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Ocean Transportation

• Harter Act
• COGSA

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Harter Act

• Most significant for shipments from mainland
  ports to Hawaii and Puerto Rico
• Applies from pick-up to delivery
• Carrier can set limit of liability, notice
  requirements and suit time

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COGSA

• Carrier can limit its liability to 500 per
  package or customary freight unit
• Applies hook to hook
• One year suit clause
• Enumerated defenses

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COGSA Defenses

• Errors in navigation and management
• Fire
• Perils of the Sea
• Latent defects not discoverable by due diligence
• The Q clause defense

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Brown Water Shipments

• Governed by the Interstate Commerce Code

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WAREHOUSEMANS LIABILITY
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Bill of Lading
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BILL OF LADING
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BILL OF LADING CLAUSES

• Himalaya Clause
• Jurisdiction, Forum Selection and Choice of Laws
  Sky Reefer

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Commercial Invoice
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Packing List