Digital Edition

November 11 2019

Issue link:

Contents of this Issue


Page 43 of 47

44 The Journal of Commerce | November 11 2019 By Colin Barrett Q&A Q A Hazardous liabilities We are acting as a freight forwarder. And the $64 question is: What is our exposure in case of an accident? We receive intermediate bulk container (IBC) totes with hazmat chemicals (corrosive liquid Class 8) from the Mid- west to Brownsville, Texas, on 53-foot dry vans. Within two weeks, we turn around and ship those same totes to the interior of Mexico on Mexican 53-foot dry vans. We act as agent of the Midwest shipper/owner of the goods. We prepare an EEI, or shippers export declara- tion. We load the dry van and the Mexican driver comes to secure the load by locking and bracing with straps, bars, and 2x4s. The Mexican carrier that picks up at our facility provides a hazmat driver with a TWIC/FAST card, and the carrier has the minimum liability insurance, probably $1 million. We only have general liability for the office/ware- house space we lease and worker's comp insurance for our employees. In the case of an accident, are we liable, or is the liability for the trucking company only? Also, how much insurance should the Mexican trucker have? On the US side, he travels 15 miles from our location to the international bridge, then 1,000 miles within Mexico. Should we ask the Mexican trucker to provide us a certificate of insurance, or any other docu- ments to indemnify us? Further, on the bill of lading (B/L), should we put the Midwest owner as the shipper even though the totes leave from our warehouse, sign the B/L as shipper, or leave it blank? I ASSUME IT'S you who selects the Mexican carrier, meaning there's a possibility that you'd be included as a defendant in any lawsuit should there be an accident. US lawyers are taught early to take what I call the "Big Daddy Lipscomb" approach to litigation. I name it after the (especially large and strong) late pro footballer's approach to defense. He used to say, "I just wrap my arms around the whole backfield and peel 'em off until I get to the one who has the ball." Lawyers learn to sue everybody in sight in search of deep pockets to pay their clients if they prevail. Let's take your remaining questions in inverse order. First, from the carrier's perspective, you are the shipper, not your Midwest client, so that's how you should prepare the B/L. Leaving that line blank won't conceal your identity, if that's what you're hoping for, and naming your client is a subterfuge that won't help you and could hurt your client by adding another name to the roster of potential defendants, although a diligent lawyer will probably uncover the name anyway and include it in the lawsuit. Moreover, doing either will give the impression that you're trying to hide something and won't put you in good standing should you land in court. Second, you absolutely should ask the Mexican carrier to give you a certificate of insurance, unless you have a fetish for self-inflicted pain. That certificate should show at least the minimum liability coverage legally required given the cargo you're shipping, and you're allowed to de- mand more than that if you can find carriers who'll agree to it. Whether the carrier moves 15 miles or 15 feet in the US makes no differrence; if it's hauling the goods within this country, it must obey US requirements. You can run into trouble if you fail to adequately vet the carrier you select, including assuring yourself that it's properly insured. Even if the carrier falsifies its insur- ance proof, a persistent lawyer can argue that you should have uncovered the fraud by due diligence and, as such, were negligent in selecting this carrier, making you liable to whoever's suing you for damages he or she can't recover from the uninsured or under-insured carrier. For that reason, among others, you should add some kind of contingency insurance to your coverage. I'd tell you this even if you were merely a broker, and as such largely immunized from liability for accidents. But you're acting as a forwarder, meaning you take physical custody of the shipments, which adds considerably to your liabili- ty exposure. For example, you're potentially liable if dam- ages are shown to have resulted from defects in the IBC totes or other loading, handling or packaging problems. I know this probably isn't what you wanted to hear, but better to hear it from me now than from a judge or jury after there's been a problem. JOC Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455, phone (843) 559-1277, e-mail For compiled past columns and other transportation-related publications visit Lawyers learn to sue everybody in sight in search of deep pockets to pay their clients if they prevail.

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - November 11 2019