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February 17 2020

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44 The Journal of Commerce | Februar y 17 2020 By Colin Barrett Q&A A Q Lost and found We tendered a one-pallet shipment to a less- than-truckload (LTL) carrier to deliver to one of our customers. For this particular carrier, the transit time is two days. Aer seven days, the customer notified us that the ship- ment had not yet been delivered. We then contacted the LTL carrier, advising them of the shortage. The carrier had no idea where it had gone. We are a "just-in-time" producer, and many of our products are unique to our customers. We happened to have another order in production for this customer and shipped that to satisfy its needs. Claim for loss had not yet been filed when, two and a half months later, the pallet arrived back at the original shipping facility. Our quality department is inspecting the goods to determine the condition of the product. I've since found out that while the shipment was missing, the customer ceased using this particular product. Even if the return is found to be in good condition, I have lost the poten- tial of sale for it. Shippers have nine months from the date of delivery to file a claim, but in this instance do I have grounds for a claim? I'M READING BETWEEN the lines of your letter a little, but if my hypotheses are correct, you may be able to claim the full sales price. You're not entirely clear on this, but my understand- ing of what you wrote is that the product in question was unique to this customer — that is, nobody else (to your knowledge) would be interested in buying it — and the customer no longer uses the product. If those suppo- sitions are correct, you have a product on your hands for which you ordinarily would have received your invoice price had the carrier timely delivered it, but which now, even if it's in good shape, is economically worthless to you, save for whatever salvage value it might fetch. That's a classic case of a delay claim, and the amount of that claim is what you lost because of the delay — i.e., what the customer would have paid you, minus any salvage. I will virtually guarantee that your carrier is going to squawk like a plucked chicken when you file your claim; at least, that's the response of most carriers when they get such claims. They'll take note that you replaced the shipment to your customer and therefore didn't lose the original sale and contend that they're not liable if the product is still in good condition. But this isn't the way the law works. First, by what you write, the delay rendered the product economically valueless. Second, as to the replacement you shipped, the courts note that "no duty rest[s] on [the buyer] to or- der another shipment to replace the lost [or, in this case, delayed] goods" (Nashville, C. & St. L. Ry. v. W. L. Halsey Grocery Co., 121 So. 16. See also Gore Products, Inc. v. T. & N. O. R. Co., 34 So.2d 418). And, as I wrote in my Manager's Guide to Freight Loss and Damage Claims (Fort Valley, VA: Loft Press, 3rd ed., 2003, pp. 181–182), "Another, and simpler, explanation… is based on the self-evident thesis that a carrier's liability should not be variable depending on such extraneous factors as the identity of the claimant. If goods are shipped f.o.b. origin, so that the consignee takes title when they are dispatched and is therefore their owner at the time of [their non-delivery], obviously the carrier will be liable for the vendor's/shipper's invoice price…, which the consignee is obliged to pay notwithstanding the in-transit calamity. How can it be proper for the carrier to be liable for less merely because terms of sale are such that the shipper owned the goods in transit and therefore it is he, not the consignee, who files the claim?" In other words, the value of your claim should be what your customer would have paid you for timely delivery of the delayed shipment, and it's immaterial — and, frankly, none of the carrier's business — whether you replaced that shipment and thereby preserved the original sale. The carrier is entitled only to whatever offset the goods' present value may afford, which by your letter is considerably less than what your customer would have paid. So file your claim for that amount. By the way, the nine months begins as of the date the carrier returned the shipment to you, notwithstanding the lengthy delay between that date and when you tendered the shipment to the carrier. JOC Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, SC 29455, phone (843) 559-1277, email For compiled past columns and other transportation-related publications visit Your carrier is going to squawk like a plucked chicken when you file your claim.

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