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Freight Intermediaries – Who Are They and What is Their Liability?. Henry E. Seaton - Seaton & Husk L.P. Mark Yunker – RJ Ahmann Company Inland Marine Underwriters Association May 18, 2010 This presentation and accompanying bibliography are also available at www.transportationlaw.net.
Henry E. Seaton - Seaton & Husk L.P.
Mark Yunker – RJ Ahmann Company
Inland Marine Underwriters Association
May 18, 2010
This presentation and accompanying
bibliography are also available at
Deregulation changed the role of the intermediary, created regulatory chaos and frustrates proper claim resolution.
B. Contracts basically trump established precedent and case law.
C. Traditional intermediaries have become “quasi-carriers” particularly in truckload segments.
Traditionally governed by the Carmack Amendment (49 U.S.C. 14706), full actual value subject to release rate declaration
Freight Forwarder. Regulated freight forwarder accepts cargo liability under Carmack
Property Broker - arranges for transportation and then hires authorized carrier (49 C.F.R. 371):
Truck Broker – arranges for transportation of exempt produce, typically accepts cargo liability by offset
Legal liability and risk exposure varies greatly by mode, the identity of the intermediary and its holding out and, in a deregulated world, the contractual liability which the intermediary accepts by written contract or by its course of dealing.
Landair Transport, Inc. v. Schneider National Carriers, Inc., 2009 U.S. Dist. LEXIS 103495, 2009 WL 3423037 (N.D. Tex.)
“Pigs get fat,
Hogs get slaughtered.”
A. Hornbook Law - Brokers are not liable where their status is clear
2. Broker insists on right of setoff
3. Reject it, crush it, and dump it
“Hire me a jet plane to Mexico”
Carrier in possession and control may have no insurance or specific vehicle endorsement (Dupre)
Homer provision freight resolution forces broker to forum where carrier may not be found (Alabama broker example)
Wetness, flatbed, tarp endorsement doesn’t fix
Temperature damage, refrigerated foodstuffs, reefer breakdown doesn’t fix
Not “in transit” argument
Unattached trailer not covered
No claim made by insured
Replacement value / not file actual value
Shipment not on specified vehicle
Failure to mitigate
No duty to defend / double suit requiredUndisclosed Policy Loopholes Which Frustrate Broker Recourse to Carrier Cargo Insurance
So what does a truckload broker actually need to be assured that the retained carrier’s insurance contains no exclusion term or condition which would preclude recovery?
to review every contract?
Question and comments can be directed to Henry Seaton at [email protected]