Shippers Should Know 5 Things About the Carmack Amendment
Scott McDevitt II, MBA, CTB
I help shippers optimize routing freight to meet their supply chain goals.
Top Five Things a Shipper Needs to know About the Carmack Amendment
The Carmack Amendment is a federal law that regulates the liability of carriers (including railroads, trucking companies, and other common carriers) for the loss or damage of goods in interstate commerce.
Here are the top five things a shipper should know about the Carmack Amendment:
1) The Carmack Amendment sets a maximum liability for carriers.
Under the Carmack Amendment, carriers are generally liable for the actual loss or damage to goods, up to a maximum amount of $50/lb for each package or unit. This maximum amount may be increased or decreased by agreement between the carrier and the Logistics Management Company/Shipper.
2) The Carmack Amendment applies to interstate shipments.
The Carmack Amendment applies to shipments that are moving in interstate commerce, which means between two different states or between a state and a foreign country. It does not apply to shipments that are solely within a single state.
3) The Carmack Amendment does not apply to all types of carriers.
The Carmack Amendment only applies to common carriers, which are carriers that offer transportation services to the general public for a fee. It does not apply to private carriers or carriers that are transporting goods for their own use, such as a restaurant sourcing their own ingredients or a school bus driver.
4) The Carmack Amendment does not cover certain types of goods.
There are some exceptions to the Carmack Amendment's coverage, including goods that are shipped by mail, goods that are shipped by air, and goods that are shipped under a government bill of lading.
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5) The Carmack Amendment can be modified by contract.
The terms of the Carmack Amendment can be modified by agreement between the carrier and the LSP/shipper. For example, the shipper and carrier may agree to limit the carrier's liability to a specific amount, or to exclude certain types of damages from the carrier's liability. This typically results in significant improvement in the linehaul pricing as risk is mitigated by the carrier. It is important for shippers to carefully review and understand any such agreements concerning cargo liability before entering into them.
Important note about Carrier Liability
It is important for you as a shipper to know the exceptions for when a common carrier is NOT liable for loss or damage to the goods:
?In order for a common carrier to be excused from liability for loss due to one of these five exceptions, the excepted cause must be the proximate cause of the damage to the goods and, more importantly, the carrier must prove itself free from negligence.
Summary
In summary, the Carmack Amendment is a federal law that sets out the liability of carriers for the loss or damage of goods in interstate commerce. It applies to common carriers, and has some exceptions for certain types of carriers and goods. The terms of the Carmack Amendment can be modified by contract between the carrier and the Shipper’s logistics solutions provider.
Please note:?This blog post is intended for educational purposes and not intended for legal advice.