In our business, it is incumbent to take as many measures as possible to ensure we insulate ourselves against any and all repercussions. That being said, how do we do so?Some shippers and consignees want to have their cake and eat it too....
In our business, it is incumbent to take as many measures as possible to ensure we insulate ourselves against any and all repercussions. That being said, how do we do so?
Some shippers and consignees want to have their cake and eat it too. Everyone wants to run by contract these days. But is the contract fair and equitable or does it have so many ambiguous clauses that it takes months to decipher what it really says before signing?
This time of year, of course, is busy shipping produce, such as fruit and vegetables. All the big names are players in importing produce. How else do the grocery stores get the goods to their shelves every day? Yet one wonders how a truck driver being paid to drive a truck is requested to pulp a load of fruit or vegetables. This puts the transportation company at risk for any mistake whatsoever. The dispatch tells the driver set the reefer at the temperature the shipper tells you. Talk about setting yourself up for disaster and possible claims. Even a cheap claim can be $20,000 or $40,000 depending on the commodity or it can be more than $100,000. Yet we want a driver to pulp the product being shipped, set the temptale, check the temperature on the reefer, open the vents, stop every four hours and check the reefer to ensure it is running, fill the reefer with fuel to keep it running, clear Customs, deliver the goods, all without any problems? Who are we kidding?
Recently, we heard of a major grocery chain in North America deducting money for claims off of freight charges owing to the transportation company. Has any good transportation lawyer explained to them this practice is illegal? Many years ago, when I first became interested in this business, I remember learning a very important fact about a bill of lading. It represents three things: transfer of title to the goods being shipped, proof of ownership to the goods being shipped, and lastly, contract for carriage.
Until the freight charges have been paid for, there is no transfer of title of the cargo from shipper to consignee. Therefore, it is illegal to deduct money for a claim from any freight charges that may be owed to the transportation company. What were the buying and selling terms? What was stated on the bill of lading? At what point did transfer of title occur? Yet the consignee, in this particular case, deducted more than $24,000 for a cargo claim for produce that arrived at a warmer temperature than it was supposed to.
Interestingly enough, the goods did get resold, mitigated the loss factor, yet, by strict definition of law, there was no claim. Yes, the goods arrived at a temperature warmer in some spots after pulping than requested and at the correct temperature in other spots after pulping. The cargo was produce and since it was not damaged in transit, was not bad upon inspection, had not rotted in transit, by strict definition of the law, a claim does not exist.
Yet this major grocery chain deducted more than $24,000 from the shipping company, because it pulped warm. This practice is not only illegal as far as settling claims, it is illegal as to what, where, and how the damage, if any, occurred. There has not been any proof the goods were damaged in any way shape or form while in transit. The freight charges were not paid, the grocery chain deducted a cargo claim (not yet proven) from previous freight charges owing, they included the amount of freight to ship this particular shipment, and had not even been invoiced for the freight charges yet.
Legally, they do not own the goods. How do we as carriers protect ourselves?
1. Ensure every contract we sign is read in full. If there is anything you do not understand, give it to a lawyer. Do not save pennies here; remember once you sign a contract you are bound by the terms and conditions.
2. Carriers should ensure the illegal practice of deducting claims, against previous freight amounts owing is not allowed.
3. Ensure the drivers are aware of what they have to do every step of the way.
Our industry is now rampant with 3PLs and 4PLs. Some are great, some are not so great, some are just so deceitful they should never have been allowed to open their doors in the first place. Both US and Canadian Customs have to realize that even with all of the security requirements in place, we as the transporting carrier must know our responsibility. We have had to prove we are aware of our responsibility, through audits performed. Yet even some of the biggest 3PLs in the world haven’t got a clue how to ship across the Canada-US border. Shipments get stuck and they leave it to the carrier to fix. By definition, we as the carrier are being paid to move the goods, not clear them, not sit and wait for them, not leave at 5 p.m. and wash our hands clean of them.
Everyone in this industry needs to be better trained; not just push responsibility off onto the carriers, run and hide when there is a problem; not just stick a carrier on a blacklist due to your own incompetence
Work together, train together, learn together, move forward together. New people in this industry need all the guidance, help, knowledge, support we can give them. It is up to the “senior citizens” in our industry to provide all of this to them.
Kevin Snobel is the general manager of Caravan Logistics.