United States: El Camino Non Curat Internet: The Internet Will Not Fix Your Truck

Isn’t everybody getting in on this Internet "e-commerce" phenomenon? Even so, there are some areas of transportation law which, for now, will remain the same. Both "e-commerce" shippers and "e-commerce" carriers in all modes of transportation need to know what they are getting into these days. There are still some things the Internet and the current state of transportation law will not do.

1. Cargo damage to freight moving by way of motor carrier in interstate commerce is governed by the Carmack Amendment to the Interstate Commerce Act. Cargo damage to freight moving by air is generally governed by the Warsaw Convention. Cargo damage to freight moving by sea is governed by the Carrier of Goods by Sea Act, also called COGSA.
2. Stripped of all the long names and fancy acronyms, the statutes are fairly straightforward. It’s usually the facts of the particular case that cause lawyers and judges to scratch their heads and say "well, that’s a different story".
3. In the regular case, cargo damage statutes make carriers responsible for damage to freight in the possession of the carrier. But carriers are generally not responsible for anything other than the "actual loss or injury to the property". That generally means that the carrier is protected from punitive damage claims, attorneys fees claims, lost profits claims and the like. As in everything else, there are exceptions here. If the carrier and the shipper engaged in "precontractual dealings" which the parties understood would, if not followed to the "T", cause the shipper lost profits and the like, the carrier may be responsible for such damages.
4. Under the cargo damage statutes, carriers may limit their liability for the "actual loss or injury to the property". Under the Warsaw Convention, liability is capped at $9.07 per pound. Under COGSA, $500.00 per shipment. Under Carmack, whatever the parties agreed would be, he declared value or release rate for the movement of goods.
5. Here’s where it can get tricky. For motor carriers, many recent decisions from federal courts have enforced limit-ations of liability only in those situations in which the shipper had a "fair opportun-ity" to choose a different level of liability. If the shipper is only given one release rate for the shipment of the cargo, the odds are against the enforcement of the liability limitation. For Warsaw, the Convention requires a carrier to comply with many procedural and substantive provisions which must be incorporated into the air waybill and also requires that the carrier not be found to have engaged in "willful misconduct". COGSA has requirements that are similar to Carmack.

Like the advent of e-commerce, trans-portation law is evolving. All of the above can be eliminated, or perhaps negotiated, by way of written contracts between ship-pers, carriers, consignees, freight forward-ers, brokers and others. Shippers now seek to waive the application of Carmack in written contracts and carriers then negotiate back into the contract "Carmack-like" remedies or at least limit their liability via a declared value or a tariff provision.

Carriers and shippers will need to draft carefully all air waybills, tariffs, bills of lading and any contractual provisions in order to effectively limit liability or to agree that freight will move at full value.

In today’s e-conomy, the sky is truly the limit.