No Seal, Raw Deal

Q: We’re a broker who had a customer move a shipment from a U.S. origin to a Canadian destination, using a Canadian motor carrier for the through movement.

On arrival, the shipment was badly damaged. It consisted of drums of a chemical that were to be dispensed by pumps built into the packaging, and while the contents were uninjured, the packaging was dinged up badly enough that the pumps wouldn’t work.

Because the unit was loaded by the shipper, the carrier is declining the claim based on bad loading and bracing. But the bill of lading doesn’t say “shipper load and count,” and the shipper says it has sent out many shipments loaded the same way without damage. Can the carrier do this?

There’s more. The goods had to clear customs at the border crossing, and we aren’t sure whether customs opened the unit or moved things inside during the inspection. Does this affect the situation?

Also, the shipper sealed the load at origin. When it arrived at destination, there was no seal.

And, finally, I know Canadian law isn’t the same as that of the U.S. If our customer has to take this to court against the carrier, will that make a difference?

A: Well, for openers, forget about Canadian law. Because this shipment originated in the U.S., it moved under a through U.S. bill of lading even though the carrier that hauled it was Canadian. If your customer sues, he’ll sue in the U.S., not Canada, and U.S. law will apply.

For the rest of it, I was on the carrier’s side right up to your afterthought about the seal. I mean, apparently, nobody’s arguing about the fact that the shipper did actually load, and its contention that it has often loaded the same way in the past without problems carries little or no evidentiary weight.

As to the absence of any “shipper load and count” notation on the B/L, who cares? Such notations are of value only to the extent that they reflect the actual facts. That is, if the notation is present, it has legal importance only if the shipper really did load and count; if the carrier did those things, it’s meaningless. By the same token, absence of the notation is also legally inconsequential if in fact the shipper did the work.

I suppose one might make an issue of whether the driver was allowed to observe the loading, and therefore might have noted any deficiencies in bracing before the doors were closed and sealed, but in court that would be an uphill fight at best. And there seems to be no other likely cause of the damage other than the packages banging around back there.

As for customs having possibly messed up the loading during the border inspection, yeah, I guess it’s possible, but it only alters the reason for the carrier’s declination. If that happened, it would be an act of a governmental agency, also exempted from carrier liability. Either way, the carrier’s declination seemed proper.

My thinking along these lines came to a screeching halt, though, when you tossed in that tidbit about the seal having gone missing. Sure, customs might have breached the seal at the border, but in that case it would have applied its own seal. Either way, there should have been a seal in place when the unit arrived, so why wasn’t there?

Lots of possible scenarios come to mind, but every last one of them involves the carrier having breached the seal for some reason of its own. Top-loading? Re-arrangement of the load? Simple curiosity? I have no idea.

Nor do I care a lot why. The only salient point is that it did — and in that moment gave up its act-of-the-shipper/government agency defense against liability. Either it messed with the load configuration or, at least, was able to take note of that configuration. Because its defense depends on it not having touched the load as well as its ignorance of the stowage, it’s not viable.

I’d say the carrier is clearly liable for the damage here.

But you tell me that, although the load is valued in the mid-five figures, the shipper is willing to settle for a few thousand bucks to repackage the chemicals. The latter is all a court likely would award, making it uneconomical to sue. Your customer is best off threatening a lawsuit and harping on the missing seal; that should get the carrier to pay up.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

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