CARGO LIABILITY OF MEXICAN MOTOR CARRIERS

by George Carl Pezold

            Many U.S. companies are doing business in Mexico and questions frequently arise about the liability of Mexican motor carriers for cargo loss or damage.
            Motor transportation services in Mexico are regulated by the Law of Roads, Bridges and Federal Motor Transportation (“Ley de Caminos, Puentes y Autotransporte Federal”). This law, which was enacted 1993, deregulated the industry allowing more competition and freedom for shippers and carriers to contract under their own terms.
            Article 66 of this Law provides that: “…When the user of the service does not declare the value of the goods, liability will be limited to an amount equivalent to 15 days of the minimum daily wage then current in the Federal District per ton, or the corresponding proportionate part of a metric ton that is damaged or lost...” At the current U.S. Dollar/Mexican Peso exchange rates, this amount is the equivalent of about USD $0.07 per pound. Obviously, shippers should be concerned about such a low liability limitation in the event of damage, theft, pilferage or hijacking of trucks carrying their goods.
            Under the Law of Roads, Bridges and Federal Motor Transportation, if the shipper chooses to declare the value of the goods, it must agree to pay an additional charge so that the carrier may secure insurance coverage for the goods. If the shipper exercises the option to declare the value of the goods (and pays the higher rate), the carrier will be liable for the loss or damage up to the value declared, even when the cause is due to force majeure or fortuitous cause. Article 67 establishes the value declaration requirement, but it does not specify where or how the declaration needs to be made. Although some carriers take the position that the value of goods must be declared on the bill of lading itself, a blanket declaration of value in a contract between the parties is sufficient to hold a carrier liable for the higher amount. Thus, one suggestion is to negotiate a transportation agreement with the Mexican carrier that provides either for full liability or a more acceptable limitation related to the value of the goods, such as $25 per pound or $100,000 per trailer or container.
            Another alternative is for the shipper to obtain its own inland marine (cargo) insurance. Most U.S. policies do not cover transit loss or damage in Mexico, but it is possible to obtain an endorsement for this coverage.