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Sales Meeting Presentation



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  • 1.  
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  • 10.
    • NTC’s Tariff is our guide to our business practices and regulations that we employ in our regular day to day operations and special circumstances.
    • One of the specific topics in the tariff is the addressing of Released Value and Liability Limitations.
    • Let’s dig down a bit for specifics on Released Value and Liability Limitations.
    • Carmack Amendment-
      • Governs motor carriers, freight forwarders and RR’s.
  • 11.
    • Carmack Amendment (cont)
      • I.C.C. Termination Act of 1995 enacted- divided Carmack into 2 parts.
        • 49 U.S.C. 14706 – motor carriers and freight forwarders
        • 49 U.S.C. 11706 – railroads
    • Carmack’s original purposes:
      • Adopt a uniform standard of liability for interstate surface transportation as stated in Adams Express Co. v. Croninger, 226 U.S. 491 (1932)
  • 12.
    • Adams Express v. Croninger (cont)
      • Carmack was amended by the First Cummins Amendment which stated, a carrier must issue a bill of lading or receipt and be liable for loss, damage or injury to such property.
    • Codify the common law liability of common carriers liable for “actual loss” of goods sustained while in their possession.
    • Created joint and several liability for originating and delivering carriers, thus ending the inconvience of shippers bringing actions against multiple connecting carriers.
  • 13.
    • Carmack’s orig. purposes (cont)
    • Require the issuance of a uniform contract of carriage and apply its terms regardless if one was issued by the carrier to the shipper.
    • Put and end to the conflict in state courts over the extent of originating carrier liability.
    • Prohibit limitations of liability unless approved by the Interstate Commerce Commission prior to their publication.
  • 14.
    • Carmack’s orig. purposes (cont)
    • Provide uniform time limits for the filing of claims and lawsuits.
    • Prescribe the place where carriers may be sued (venue)
    • Apply the laws governing water carriers when the loss occurred while in the water carrier’s possession.
    • Apply these liability provisions to re-consigned shipments
  • 15.
    • Carmack’s orig. purposes (cont)
    • Exclude switching carriers from these provisions
    • Provide for the use of freight forwarder bills of lading and delivery receipts by motor carriers when delivering goods for freight forwarders.
    • Enable the originating or delivering carrier that was required to pay for a loss; to be indemnified by the connecting carrier over whose line the loss occurred.
  • 16.
    • Released rates-
      • Although the Carmack Amendment requires railroads to assume liability for the full value of goods transported, railroads may limit their liability by providing a released rate or more clearly stated, a rate under which the goods are released at a “value established by a written declaration of the shipper or by a written agreement between the shipper and the carrier.”
      • This critical provision was interpreted by the United States Supreme Court in Adams Express v. Croninger, to mean that a carrier could under the Carmack Amendment-
  • 17.
    • Released rates (cont)-
    • …… by a fair, open, just and reasonable agreement limit the amount recoverable by a shipper in cases of loss or damage to an agreed value made for the purpose of obtaining the lower of two or more rates or charges proportioned to the amount of risk…….
  • 18.
    • When the I.C.C. Termination Act was enacted in 1995- this divided Carmack Amendment into 2 parts. One governing R.R.’s and one for motor carriers and freight forwarders.
    • Both modes must have a bill of lading or receipt for liability and actual damages.
    • No uniform limit of liability for motor carriers in Carmack.
    • No B/L issued- no reference to a carrier’s tarriff. Carrier will be held to FULL VALUE LIABILITY!
  • 19.
    • Carmack Amendment allows 5 ways to get out of a claim.
      • Act of God
      • Public Enemy
      • Authority of Law
      • Act or default of shipper or owner
      • Inherent Vise
    • Courts have held a carrier is bound by provisions in Carmack
  • 20.
    • Since the previous 5 are sometimes very difficult to prove, carriers rely on 49 U.S.C. sub section 10730 of Carmack
    • 49 U.S.C. sub section 10730- requires the shipper’s written agreement to a carrier’s offer to reduce its rate in return for the shipper’s declaration of a lower value on a shipment
  • 21.
    • What Released Value means to me?
      • NTC’s tariff and bills of lading explicitly address released value and liability limitations.
    • First lets take a look at the NTC bill of lading.
      • Basics first- what is a bill of lading and what does it do?
      • “ The bill of lading is the basic transportation contract between the shipper-consignor and the carrier; its terms and conditions bind the shipper and all connecting carriers”. Southern Pacific Transportation Co v. Commercial Metals Co., 456 U.S. 102 (1982)
  • 22.
    • Bill of lading (cont)
      • “ Additionally, bills of lading are a necessary element of proving a claimant’s prima facie case in a court action” Consolidated Rail Corp v. Uhlmann Co., 1988 Fed. Car. Cas. & Refrigerated Transport Co. Inc v. Hernando Packing Co 1976
    • Liability Limitations on NTC’s bill of lading-
      • There is a liability limitation on our bill of lading and it is up to the shipper to make sure that they understand what he is covered for.
  • 23. Released Value and Liability Limitations
  • 24. Released Value and Liability Limitations
  • 25.
    • Bill of lading (cont)
      • Each of our bills of lading cap our liability at $7.50 per pound per piece.
        • This is why it is important to have every shipment we originate to be on an NTC bill.
    • The actual hard copy of our bill of lading also states, “……..$7.50 per pound per piece, the actual value or NMFC release value, whichever is less.”
      • NMFC has specific items that have specific release values which are either higher or lower than our bill of lading.
  • 26.
    • F.A.K. Pricing
      • Certain shippers have negotiated F.A.K. pricing. NTC’s tariff addresses those liabilities as well.
    • When negotiating a F.A.K. pricing contract-
  • 27.  
  • 28.
    • We have paid several claims to shippers for full replacement on items damaged in a F.A.K. pricing contract.
    • If we address what we are liable for when we sit down with the shipper, there should be no worries when it comes to filing a claim.
    • Here are some examples of contracts that we have with shippers that are F.A.K. pricing.
  • 29.
    • In this tariff the class is addressed under item 10 . “A F.A.K. class 50 will be applied on all items classed in the NMFC on outbound shipments and on inbound shipments from direct service points.” So under our tariff we should be liable for $1.00/cwt (hundredweight).
  • 30.
    • In this tariff the class is addressed under item 8. “F.A.K. 55 (50-550) for all freight.” So under our tariff we should be liable for $2.00/cwt (hundredweight).
    • This is why it is so important that we have to address our liability limitations with our shippers for a couple of reasons. 1) mitigate our losses when/if a claim comes along. 2) to not surprise our customers when they file a claim .
  • 31.
    • Another specific addressed in our tariff is excessive value coverage for a shipper.
      • We will cover, additionally, over $7.50 per pound per piece, provided the shipper declares the shipment excessive in value.
        • In our tariff it is addressed by the following. ITEM 781, #3- Additional coverage for shipments with an actual value, at cost, greater than the limitations set in this item and item 780 can be obtained by contacting the Nebraska Transport Co., Inc. corporate office. The rate for additional coverage will be $0.75 per $100.00 of excess valuation subject to a minimum charge of $40.00.
  • 32.
    • Excessive Value (cont)
      • Lets look at a shipment to show what we can cover for a shipper and make some extra revenue!
    • Shipper has a box that weighs 100 lbs. Nothing marked on the bill of lading or addressed in the contract, so our liability is at $750.
    • Shipper says the box is worth $2,000.
      • Of course knowing your customers business helps you to sell them peace of mind.
  • 33.
    • Excessive Value (cont)
    • Box worth $2,000
    • NTC Liability - $750_
      • Balance $1,250
    • Additional Coverage to the shipper for full value
    • ($.75 per $100 of valuation) $1,250 / 100 = 12.5
    • 12.5 x $.75 = $9.38, would fall under $40 minimum.
  • 34.
    • One very important thing to remember when doing an excessive value shipment.
    • Class rates are paid with ZERO DISCOUNT ! Full class rates and either the minimum for excessive value or $.75 per $100 of valuation.
    • Excessive value is treated the same as freezable shipments. There must be prior notification given to the carrier by the shipper.
  • 35.
    • Hopefully this has shed some light into some of our challenges that we face in the claims dept., when it comes to claims and dealing with our customers and their claims.
    • All quotes are from Freight Claims in Plain English Third Edition & Transportation Logistics and the Law both by William Augello, ESQ and George Carl Pezold, ESQ.
    • Questions? Thank you!