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Transportation & Logistics Council, Inc. |
Q&A – Archive I |
1) Air Freight - Declared Value and Insurance
2) Air Freight Forwarder - Liability for Theft
4) Bills of Lading - "Straight" vs.
"Order"
5) Brokers -
Withholding Payment for Claim on Prior Load
6) Brokers - Assumption of Liability for Loss
& Damage
7) Brokers - Caught in the Middle
8) Brokers - Liability for Non-Delivery
10) Brokers - Name on Bills of Lading
11) Brokers - Protecting Shippers' Interests
12) Brokers, Agents and Third Party Logistic
Providers
13) Bumping Privilege - NMFC Item 171
14) Bumping Privilege - Limited to Shippers
15) Carmack Amendment - Who is Covered?
16) Carrier Holding Freight "Hostage"
17) Carrier Use of Shipper's Forklift
19) Claims - Mitigation of Damages
20) Claims - Prepaid Freight Charges
21) Claims - Recovering Freight Charges on
Partial Deliveries
22) Claims - Regulations and Procedures
23) Claims - Repackaging Expenses
24) Classification of Shipments
25) Common Control - Shipper and Broker
26) Concealed Damage - Canned Goods
27) Concealed Damage - Clear Delivery Receipt
28) Contracts - Consignee-filed Claims
29) Contracts - Incorporation of Rate Tariffs
30) Contracts - Released Rates on Computers
31) Court Decisions on Carrier Liabilty
32) Cross-Docking for Lower Rates
34) Damages - Missed Delivery Appointment
35) Damages - Special Damages for Rail Service
Failures
36) Definitions - Logistics Company
37) Definitions - Property Broker as Shipper
38) Definitions - Shipper’s Load and Count
40) Discount Rates - Discounted from What?
41) Duty to Accept Damaged Goods
43) FOB Terms vs. Payment Terms
45) Freight Bills - Time Limits
46) Freight Bills Received After 180 Days
47) Freight Charges - Billing to Customers
48) Freight Charges - Broker Out of Business
49) Freight Charges - Shipper Liability to
Subcontractor
50) Freight Charges - Shippers Liability
51) Freight Charges - Shipper's Liability;
"Section 7"
52) Freight Charges - Statute of Limitations
53) Freight Forwarders - Legal Requirements
54) Holding Freight for "Ransom"
55) Household Goods - Estimates
58) Improper Loading - Act of Shipper. 62
59) Insurance Requirements - Courier & Messenger
Services
62) Liability - Carrier’s Liability on Refused
Shipments
63) Liability - Custom Order Goods
64) Liability - Limitation When Broker Involved
65) Liability as a Rate Factor
66) Liability for Stolen Freight - Carrier's
Terminal
67) Liability on Sealed Container Shortage
68) Limitation of Liability - No Bill of Lading
69) Loading and Unloading - Driver Injuries
71) Measure of Damages - Limits &
Consequential Damages
72) Measure of Damages - Released Rate Shipment
73) Measure of Damages - Repair Cost
74) Measure of Damages - Return Shipment
75) Measure of Damages - Return Shipment
76) Notice of Claim - Rail Shipments
77) Notice of Refused or On-Hand Freight
78) NVOCC'S
and Ocean Freight Forwarders
79) Offsetting Claims Against Freight Charges
80) Overcharge Claims - A Solution to the 180-Day
Rule?
81) Refused or Rejected Freight
82) Remedies - Carrier Holding Freight Hostage
83) Responsibility for Consequential Damages
84) Retention of Bills of Lading and Similar
Documents
85) Retention of Shipping Documents
88) Salvage - Food Products Damaged in Transit
89) Salvage - Inspection of Damaged Shrubs
90) Salvage Allowance - Safety Risk
91) Salvage Allowance; Arbitrary Percentage
92) Salvage Value - Returned Damaged Freight
93) Shipper Liability for "Dropped
Trailers"
94) Shipper's Duty - Proper Loading
95) Shipper's Load & Count - Multiple
Stop-off Shipments
96) Shipping Records - Retention
97) Shortages - Rail Shipments
98) Special Damages - Customer Chargebacks
99) Special Damages - Express Freight Charges
101) Storage on Refused Shipments
102) Surface Transportation Board
103) Tariffs - Participation by Carriers
104) Time Limits - Collecting Freight Charges
105) Time Limits - International Air Freight;
Partial Loss
106) Time Limits for Filing Overcharges
107) Time Limits: Exceptions
to "9-Month" Rule for Filing Claims
108) Time Limits; 9-Month Limit for Filing Claims
109) Transportation Contracts - Requirements
111) Unreasonable Rules in Railroad Contracts
112) What's in a Name? - Carrier Mergers and
Shipper Liability
Question: We send shipments out by air freight and will declare a value
of $1,000.00 per shipment, which is the amount of our insurance deductible,
even though the value may be much greater. The question is, have we prejudiced
our ability to collect the invoice value from the insurance company by only
declaring a $1,000.00 value on the air way bill?
Answer: By declaring a lesser value on the air waybill,
you have prejudiced your insurer's ability to recover the full invoice value
from the carrier through subrogation. You would have to review the particular
insurance policy as some policies allow the shipper to ship under a bill of
lading with a released rate or limitation of liability, and some do not.
Is the shipment domestic
or international? The liability differs. Domestic could be 50
cents per lb., 50 cents per lb. per piece, or $9.07 per lb. per piece. International is now 17 SDR's per kilo, or
about $10.41 per lb. per piece.
As to the declaration on the air waybill, if you
declare the value at $1,000, the carrier will assess an excess value charge for
the amount of value that exceeds its tariff limit, whatever that may be. For
example, if a shipment weighs 500 lbs. and has an invoice value of $5,000,
that's $10 per lb. But if the airline's liability is only 50 cents per lb., or
$250, it will charge its excess value charge for $750.00. That could be 35
cents to $1.00 per $100 of excess value, depending on the carrier's tariff.
($26.25 to $75.00)
It may be cheaper to have the insurance
deductible set at the carrier's liability limit. The shipper would file claims
against the carrier for its tariff limit, and the insurer will pick up the
losses over that limit. Insurers' premiums are usually much cheaper than
carriers' excess value charges.
As to your question about the insurer's
subrogation claim against the airlines, the insurer must claim the actual
invoice value of the loss. However, the airline will only pay up to the limit
of its liability unless a higher value has been declared. If you are successful
in changing your insurance policy as suggested above, there will be no need to
file claims against the airline, as you will recover up to the limit of the
airline's liability.