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May 28 2018

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100 The Journal of Commerce | May 28 2018 www.joc.com JOC Top Importers and Exporters Q&A A I'm a motor carrier. I'm working on a repair claim for a damaged safe. The original cost of the unit was $7,440. The bulk of the claim is for labor totaling $5,251. I've subrogated this claim over to the designated delivery carrier. In its review of the claim, the carrier has requested that we provide it with the actual employee(s) timesheet to prove the time and labor rate. This is the first time I've received this request from a rep- utable carrier. Timecards from a company to justify repairs is beyond what a claimant needs to provide, or am I wrong? YES, YOU'RE WRONG. The request, if I understand your question correctly, is justified. You don't come right out and say this, but from the tenor of your note, I gather that your shipper, the claim- ant, performed the repairs itself rather than farming the work out to a third party who invoiced for the work. I can certainly see no other basis on which the worker('s)(s') time card(s) would be of importance to the carrier responsible for the claim. Had this situation been otherwise with a third party repairing the damaged safe, wouldn't you, as payer of the repair bill, expect that third party to itemize its invoice? For example, when you take your car in for work, doesn't the auto shop break down its bill by parts and labor? Sure, the labor portion is typically a fixed amount in that case, but that's customary for an auto shop whose business is repairing cars, which is a somewhat di†erent matter. In this instance, I assume your shipper/claimant isn't in the business of repairing safes for a living, and is pre- senting this claim to recoup what it says it actually laid out for the repairs. The delivery carrier to whom you've subrogated the claim has the right to assure itself that the amount of the claim accurately represents that sum, which is all it's doing. Now, there's a caveat or two I need to add to this pro- nouncement. In particular, the claimant isn't restricted to the actual direct outlays it incurred in performing the repairs. As I wrote in my Manager's Guide to Freight Loss and Damage Claims (Fort Valley, VA: Loft Press, 3rd ed., 2003, pp. 194-5): "Although carriers will often object, the law is that in such cases a 'reasonable' overhead allowance, in addition to actual time and materials employed in the work, is permitted. See, e.g., Olcovich v. Grand Trunk Ry. of Canada, 176 P. 459; Galveston, H.&S.A. Ry. v. Standard Rice Co., 34 S.W.2d 619; Western Machinery Exch. v. N.P. Ry. Co., 254 P. 248; and others. The owner can scarcely be expected to make facilities and indirect services available for the carrier's benefit (i.e., having the e†ect of reducing the amount of the claim) without compensation. In some circumstances, the claimant may even add a 'profit' element to the cost of repairs he recovers from the carrier. Vacco Industries v. Navajo Freight Lines Inc., 63 Cal.App.3d 262, cert. den. 431 U.S. 916 (1976)." Which is to say that your delivery carrier can't restrict its payment of the claim to a strict multiplier of the time expended by the worker(s) assigned to the repair job and his/her/their hourly pay. But please note my use of the word "reasonable" in the foregoing quota- tion from my book. The carrier is within its rights to ensure that the labor cost included in the claim bears some reasonable relationship to the work performed, and that the claimant isn't taking advantage of the situa- tion to unreasonably enrich itself. Now, I'm not telling you that the delivery carrier may not be readying itself to present the kind of defense that I've just told you would be improper, to wit, trying to limit its payment simply to the actual dollars the ship- per/claimant paid its employee(s) for the time they spent performing the repair work. That's certainly a possibility. But for the moment let's give the carrier the benefit of the doubt. You also might give it a copy of this column to preclude it from taking such a position, which, as I've said, would be contrary to established law. Still, as I wrote in my book, carriers sometimes try to make an issue of anything beyond incremental outlays for labor in such cases. They won't themselves do work for others at cost, but for some reason they seem to expect their claimants to do that on their behalf. 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, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010. Q Show me the timecards BY COLIN BARRETT Had this situation been otherwise with a third party repairing the damaged safe, wouldn't you, as payer of the repair bill, expect that third party to itemize its invoice?

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