Volume 2, Issue 6 - March 31st, 2014

If you offer interstate trucking services and want to limit your cargo liability you should take note of a recent court finding in favor of a shipper due to an incomplete bill of lading.

Although the case involved a rail shipper and CSX Transportation, the statutory requirements are nearly identical to trucking. As a result, if you are an interstate truck operator and you’re not careful, a $25,000 liability could turn into a $550,000 liability, which is exactly what happened in this case.

CSX had damaged an electrical transformer worth about $1.3 million for the shipper, ABB Inc., which said the damage amounted to more than $550,000. The railroad contended its liability was limited to a maximum of $25,000 under the bill of lading because it had incorporated a reference to a $25,000 liability limitation in a separate price list.

However, the court decided that the bill of lading was silent regarding the extent of CSX’s liability. The space on the BOL labeled “rate authority,” where a notation regarding rate and liability normally would be listed, was left blank.

Moreover, the BOL did not contain any references to an identifiable classification, a rate authority code, a price list, or any other indication that the carrier assumed only limited liability.

According to the court, it is not enough to rely solely on the boilerplate language contained in the uniform straight bill of lading, which reads: “Shipper hereby certifies that he is familiar with all the terms and conditions of the said bill of lading, including those on the back thereof, set forth in the classification or tariff which governs the transportation of this shipment.”

The court decision shows that it also doesn’t matter if the shipper drafted the bill of lading. It’s the carrier who must make sure the BOL expressly states the liability limitation.