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International Transportation & Logistics Despite the significant amount of goods transported in international commerce, surprisingly, very little attention is paid to such issues as risk of loss while the goods are in transit. The proper use of short-hand terms that purport to allocate the risk of loss between buyers and sellers on international shipments eludes many who have become accustomed to using the terms established by local or state statute for domestic shipments. And, even very large manufacturers, distributors, and others who either receive or ship large volumes of freight sometimes know very little about the limits of liability that attach to the various modes of transportation, either under international treaties, U.S. Federal law, or the common law of the state in which the contract of carriage is made or the incident of loss or damage occurs. It is not always easy to determine which law applies to a particular shipment. This is particularly difficult in the case of international shipments involving carriers of different countries. Under certain circumstances, a shipper may be shocked to learn that the laws that protect the carriers of a foreign country may spill over to protect the U.S. carrier with whom the shipper contracted. This may be the case for shipments originating at a plant in Mexico, for example, which are destined to a distribution center in Austin, Texas, and moving by rail or motor common carrier pursuant to through bills of lading. The applicable laws in Mexico would limit recovery for loss or damage to the cargo to a mere six or eight cents per pound. In addition to applicable laws, transportation service consumers need to be aware of the content of the carrier's tariffs which may be incorporated by reference into the contract of carriage. A tariff may contain limitations in the section containing its rates or in the section containing the rules applicable to the carrier's services. These limitations may act to limit the liability or measure of damages for which the carrier will have to respond in the event of loss or damage to goods or baggage — even beyond the standards established in the applicable laws, provided the carrier has given the proper notices, provided an opportunity to the shipper to elect a higher level of liability (usually for a higher transportation rate) and issued the proper documentation. The key to eliminating unsavory surprises of this nature is to
carefully review the contract of carriage, ask the carrier for a copy of
its applicable tariff — by law, they are required to provide
it — and carefully review the tariff, bill of lading and
other documentation (such as rate quotes and confirmations) issued
by the carrier. Transportation IntermediariesIn some cases, intermediaries used by shippers or receivers of freight (such as freight forwarders) can avail themselves of the limits of liability that apply to carriers. Therefore, careful attention should be paid to the documentation issued by these intermediaries and any purported incorporation of statutes, treaties or tariffs should be examined closely.
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