My question pertains to truckload shipments originating in Mexico and delivered into the United States under shipping terms F.O.B. origin.
Our company had several shipments deliver short to destination, yet they delivered with the origin trailer seal still intact. The carrier contends they have no claim responsibility, first because the seals had not been tampered with, secondly because another carrier (drayage) had physically crossed the trailer from Mexico into the United States.
We had no formal transportation contract in place with this carrier at the time of the shipments. Does the carrier have any legal obligation to honor the freight loss claim?
Probably not, I'm afraid.
This isn't the first time I've heard of such a thing on shipments moving in from Mexico. Seals are useful, but they're not perfect proof against theft.
The simplest way to remove articles from a sealed trailer without breaching the seal is to remove the doors from their hinges and carefully lift them out. It can happen with any shipment, of course, but it seems to be a favored method south of the border and could well explain your shortages.
There are, however, other possible explanations, one being that the shipper either inadvertently or intentionally short-loaded. And without a lot more information it's impossible to say which answer is correct.
With adequate proof of the load count you might ordinarily be able to enforce liability against the carrier regardless of the intact seal. It would be a bit of an uphill struggle, but evidence of tampering - with the seal or the hinges - should be discoverable if this is what happened.
But you face a pretty much insurmountable hurdle because the shipments originated across the border.
A carrier's liability extends only to loss or damage occurring on the movement described in the bill of lading. For it to be liable, that is, the entire origin-to-destination service would have had to be covered by a through bill.
And while you don't specify this either, I can pretty well guarantee there was no such through B/L. Because of the mutual restrictions on international service maintained by the United States and Mexico, crossborder movements aren't performed under international through bills.
Rather, the delivering (U.S.) carrier's B/L will almost certainly cover only its segment of the move, from the border crossing to the destination. To hold it liable you'd have to prove the shortage occurred on that leg of the journey.
Not only can't you present such proof, but it's pretty likely that this isn't the case.
Nor would it help you a great deal even if there were a through bill covering the entire movement from the Mexican origin to the U.S. destination. Because the traffic originated in Mexico, such a B/L would be subject to Mexican, not U.S., law. That would leave you high and dry for two reasons.
First, unlike the United States, Mexico doesn't apply the rule of "joint and several" liability on interline traffic. In this country it need only be shown that loss or damage occurred somewhere along an interline through route; the origin and destination carriers are then liable irrespective of whether they had custody at the time of the loss or damage.
This is one of the key provisions of the Carmack Amendment to the Interstate Commerce Act, currently codified (as to motor carriers) at 49 U.S.C. ? 14706. Each participating carrier in a through movement is deemed legal agent of the others, and is "jointly and severally" liable on behalf of the others.
Mexican law, however, holds carriers liable only for what happened when they, individually, had the shipment. And again, you can't prove where along the route this shortage came about.
Furthermore, leaving all this aside, in Mexico carrier liability is laughably low - something like two or three cents a pound. You can buy insurance for more, but since you don't mention that I doubt you did it; and if you had you would have had to buy from a Mexican insurer, and the law there heavily favors the insurer.
So, all things considered, your only real option is to press the shipper for proof the shipments weren't short-loaded to begin with. But your brief inquiry doesn't raise that point at all, so I assume you've already satisfied yourself on that score. And I'm sorry to say that leaves you holding the bag.
It gets worse yet; not only can I offer you no help on these past claims, I also can't even tell you how to avoid the same problem for the future.
There are, of course, some ways to help, in particular by selecting carriers for both U.S. and Mexican legs that are reliable. You can also set up contracts with these carriers, which I recommend.
But there's no way to set up legal protections such as you might enjoy on a domestic U.S. move. Indeed, nowhere else in the world are shippers so heavily protected as they are by the law of this country. It's a reality that those who do business across national borders have to face.
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, BarrettTrn@aol.com. Contact him to order the 536-page compiled edition of past Q&A columns, published in 2001, at $80 plus shipping. Later compilations by request.