The Complexity of Cargo

CLM’s Subrogation Community recently held a webinar entitled, “Introduction to Cargo Subrogation,” which discussed how cargo is transported around the world and within the U.S., the laws and regulations involved, the process of determining who is responsible when cargo is damaged, and the key documents and coverages at play. Below are a few takeaways from the presentation.

12:00:00pm

THE SPEAKERS

Ashton Kirsch, Shareholder/Attorney, Matthiesen, Wickert & Lehrer, S.C.

Valorie Steinbeck, Team Manager – Inland Marine/Cargo, Crawford & Company

12:05:17pm

Ashton Kirsch

“Cargo subrogation is important to all of us. …Everything comes in through trucks. Everything we touch today…it’s all being transported. Cargo claims exist every day. It’s one of the most extensive types of claims we see…. And it’s a complex area of law.”

12:06:55pm

Valorie Steinbeck

“Quite often, when you get subrogation demands, there’s usually a cargo element to those demands, so if you don’t understand how the damages will affect that demand, what you’re looking for, how to find the information, it tends to create difficulties for that claim.”

12:11:15pm

Valorie Steinbeck

“We had a shipment come out of Nepal. …[I]t came into the Georgia ports. Unfortunately, the shipper didn’t take any photographs to validate how that cargo looked when it shipped. …It gets to Georgia, and it sits and gets delayed. It gets to the end user, and now we have a bug-infested product, and we have mildew. …Who’s at fault?”

12:11:50pm

Valorie Steinbeck

“[I]t was determined it was not properly secured and packaged at origin, which allowed for moisture to get in. …[A]nd there was further delay caused by the Georgia terminal…. So, naturally, we were able to look at shipper’s load and count. You have to look at every element...to see which parties apply to what part of that transport to see where liability lies.”

12:13:34pm

Ashton Kirsch

“It’s like putting a puzzle together. But these legal regimes we’re going to get into simplify the process a little bit so at least there’s some clarity over how the claims occur when they’re within the United States or bound by Carmack and various rules.” 

12:14:10pm

Ashton Kirsch

“Every state had different rules prior to the codification of the Carmack Amendment. …[T]here was a whole process where the way the claims played out was totally different [depending on which state an interstate transportation incident took place in], which encouraged the U.S. government to pass…reform—interstate regulation for commerce that creates this strict liability regime through Carmack.”

12:17:00pm

Valorie Steinbeck

“That bill of lading has to show you the outline of what’s taking place from pickup to delivery. That is your contract of carriage, and that’s what’s going to trigger coverage under your motor truck cargo policy. If the proper information isn’t illustrated…it may not fit the bill, and it may not actually trigger coverage.” 

12:18:25pm

Ashton Kirsch

“When we’re working our way back through to figure out which motor carrier is ultimately going to be responsible…on the subrogation end, that’s what we’re looking for: markings [on the bill of lading]. Because if there is damage, they have a duty to inspect, and they’re marking, ‘Several boxes of these widgets are damaged.’ …Whatever it could be, it should be marked on there. That’s not always the case; that’s why litigation occurs.”