Changes to the Standard Bill of Lading and How They May Affect Your Shipments

Posted by Steve on Sep 22, 2016 9:13:19 AM

 Changes to the Standard Bill of Lading and How They May Affect Your Shipments

Recently, the National Motor Freight Traffic Association made changes to the language on the back of Bills of Lading. The first point to make, and to be sure is understood, is that a Bill of Lading is a legally binding document. The changes address many areas of the Bill of Lading and have the potential to impact anyone using this standard form. We will highlight the changes for you in summary form below to educate and hopefully help you protect your company's interests. 

In July, some modifications that were made significantly changed the terms and conditions that regulate the transportation of goods within the United States, if using the Uniform Standard Bill of Lading. Key changes include: 

Section 1 (a).

The motor carrier responsible for cargo loss or damage is the one shown on the bill of lading, rather than the one in possession of the goods when they are lost or damaged.

This change affects carriers more than shippers, specifically in the case of interline agreements. It is very common, particularly for regional carriers, to accept freight that is outside their primary service area and interline it with a carrier that can more efficiently service that area. The new verbiage keeps the cargo liability with the BOL assigned carrier through to delivery, perhaps inducing heightened observation of freight in transit with their interline partners.

Section 1 (b). 

Under the new terms, the burden of proof to prove the carrier’s negligence for loss, damage or delay, is now on the shipper. Under the old terms, carrier responsibility was presumed when the shipper showed cargo was tendered in good condition, and the burden to prove freedom from negligence was on the carrier or the party in possession. The new supplement also adds “riots or strikes or any related causes” to the list of carrier defenses to a cargo claim.

This change evidently favors the carrier. It is incumbent on a shipper, perhaps now more than ever, to exercise due diligence when selecting a carrier.  Specially, exercising adequate vetting procedures of any carrier by reviewing CSA scores and any reasonably available D.O.T. data.  For high value cargo in particular, it would be a wise exercise to produce picture or video documentation of the loaded shipment just before the carrier leaves the shippers dock.  

Section 2.

Unless arranged or agreed to in writing or electronically, prior to shipment, carrier is not bound to deliver a shipment by a particular schedule or in time for a particular market, but will transport the shipment in the regular course of its providing transportation services. (The previous verbiage was "carrier is responsible to transport with reasonable dispatch.") In the case of physical necessity while in transit, carrier may forward the shipment via another carrier.

Here, the NMFTA has changed the long standing established standard, which defines the carrier's duty to deliver with "reasonable dispatch.”  The change tends to favor the carrier in terms of delivery parameters.  So here is another area where the shipper needs to exercise some care and be as specific as possible on the Bill of Lading regarding expected or required delivery parameters.  

Section 5 (a).

The old language states that limitations of liability may apply if the cargo value has been stated by the shipper or has been agreed upon in writing as the released value. The new language allows a carrier to limit liability simply by publishing the limitation in its tariff. 

This can become particularly expensive to shippers of high value cargo.  Most carriers provide additional cargo insurance options as an accessorial charge.  Be sure you understand the cargo liability limitations of your carrier’s individual tariffs. 

For more information on this or any Transportation topic, please contact Land Link Traffic Systems or call 732.899.4242.

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Topics: Transportation News