TRANSPORTATION LAW – THE CARMACK AMENDMENT

TRANSPORTATION LAW – THE CARMACK AMENDMENT

The following information enables companies to hold carriers accountable for lost packages under a federal law known as the Carmack Amendment. You can recover an additional 3-5% of your spend by knowing how to use this law.

LOSS OF PROPERTY

The starting point for cargo claims in the United States is the Carmack Amendment to the Interstate Commerce Act. There is a section in this entitled ‘Liability of Carriers Under Receipts and Bills of Lading’.

The liability imposed by the Carmack Amendment for any carrier involved in the movement of goods, is for the “actual loss or injury to the property”. The carrier therefore, is responsible for lost and damaged parcels and shipments.

The Prima Facie Case Against a Carrier - (Prima facie is a Latin expression meaning on its first appearance, or at first sight. The literal translation would be "at first face")

The general rule is that a receiving or delivering carrier is liable for the actual loss or damage to a shipment upon proof by a claimant of (1) delivery to the carrier in good condition, (2) arrival at destination in damaged condition and (3) the amount of the damages. The carrier's defenses to the claimant's cause of action are very narrow. Basically, the carrier must first prove freedom from negligence, and then, that the loss or damage was caused by one of five specific exceptions:

1. An act of God
2. An inherent nature or vice of the goods
3. An act of the shipper
4. An act of the public enemy
5. The authority of law

Unless the carrier is able to establish first, freedom from negligence, and second, one of these five exceptions to liability, the claimant will win.

Notice that the claimant is not required to prove that the carrier is negligent. As long as the claimant is able to prove non-delivery in good condition, arrival in damaged condition and the amount of damages, the prima facie case has been established and the burden then shifts to the carrier to prove itself free from negligence and to bring itself within one of the five common law exceptions to liability.

A surprising number of large companies are not taking advantage of this law, simply due to not knowing this information, or in the mistaken belief that someone is already taking care of it.

It is a proof of delivery issue.

If your freight payment company only audits the bill when it arrives, your company is missing out on recovering 3-5% of your annual spend.

Why is that? Simply because not enough time has elapsed to allow the carrier to make the deliveries! That makes it impossible to audit for and get the refunds you are owed for lost shipments.

We get refunds for these by auditing 3-4 weeks AFTER the bill has arrived. If your current freight provider does not do that, you are missing out on this.

Don’t change anything though, because there is a lot that they are doing.

We will complement their effort with our contingency fee based audit and recover that additional 3-5%.

Cost Recovery can help you get back 3-5% of your annual parcel shipping spend and take all the work off your plate. Don’t get into the tedious detail of claims filing, and don’t miss the refunds you can get back. Contact us to learn more.