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-
…… 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…….
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)
“ 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.
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).
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 .
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.