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April 16 2018

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68 The Journal of Commerce | April 16 2018 Q&A By Colin Barrett Q A No evidence? No claim I was wondering if you could help me. My company is a transportation brokerage. We recently hauled a load for a customer of ours that was rejected because the driver showed up to deliver with a broken seal. My customer, the shipper, wants to be paid for the load, and the trucking company that hauled it refuses to pay anything. I am stuck in the middle. I filed a claim with the trucking company's insurance and of course they denied it because they claim nothing is wrong with the product. Would I have any leg to stand on if I were to go aer the trucking company who broke the seal? Please let me know if you can help me or lead me in the direction of someone who might be able to assist me with this matter. I GET QUESTIONS like yours with disturbing frequency — disturbing because they display a complete misunder- standing of the basic law that underlies freight claims. The law holds carriers liable for any loss of or damage to the goods the carrier is hauling, save in certain very limited cases. The carrier doesn't have to be at fault; indeed, it may be completely blameless. It's enough that the shipment suffered the loss or damage while it was in the carrier's custody. There are many who feel that this rigid liability regime is unfair to carriers, and, objectively, there's a pretty good argument for this view. Neverthe- less, in this country, that's how the law reads. But a pretty obvious corollary to this legal principle is that a precondition to application of this strict standard of liability is that there must be some actual loss or damage to a shipment before the carrier is obliged to pay. And I mean that the loss or damage has to be proved to an impartial adjudicator — a judge or a jury — and can't merely be suspected or worried about by the claimant; the carrier isn't liable for the unsupported whims of the shipper or receiver. To be sure, not every claim (or even the majority of them) will wind up in court for resolution, and thus come before that judge or jury. But if it did, this is the standard that would be applied. Accordingly, in evaluating the validi- ty of claims, this is the measure that should be used by the parties in deciding, first, whether a claim should be filed, and second, whether that claim warrants payment. Now, when the shipper takes the trouble of sealing a load before dispatching it, delivery with a breached seal certainly sets off a concern that the contents of the sealed unit may have sustained some injury. But it's up to the claimant to transform that concern into reality by showing that the suspected injury did in fact occur. In your case, you do have the breached seal. This seems undisputed. But you tell me the carrier contends that "nothing is wrong with the product," and, from what you say, nobody seems to be arguing otherwise. Certainly, you've given me nothing even resembling evidence to the contrary. So for what do you expect the carrier to pay? The busted seal, which in any case would have been destroyed at the time of delivery? Now, I acknowledge the fact that the seal no longer intact when the goods were tendered for delivery opens up a lot of possibilities that may warrant the consignee's con- cern. Was the seal broken by someone in order to deliber- ately introduce harmful contaminants? Even if the breach was accidental, could it be that the goods became contami- nated inadvertently? Depending on the product involved, a number of such questions come readily to mind. But that's all they are — questions, not facts. If the goods are indeed contaminated or in some other way rendered of diminished value by virtue of the fact that they made some portion of their journey without what- ever protection the seal was intended to provide, that is indeed an injury for which the carrier could be held liable; but where's the evidence that such is the case? Apparently, your customer's consignee has a policy of not accepting unsealed loads, and for that reason rejected this one. That's all well and good, but its policy is binding only on it, not anyone else. If the shipment arrived undamaged, then its rejection was legally unsup- portable, and your customer should insist on payment from it. You can't lay this one on 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, S.C. 29455; phone, 843 559 1277; email, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010. The loss or damage has to be proved to an impartial adjudicator and can't merely be suspected or worried about by the claimant; the carrier isn't liable for the unsupported whims of the shipper or receiver.

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