Do you have oversize, high-value freight that needs moving but you’re worried about the confusing plethora of insurance policies and where you stand with liability issues?

Well, if you found yourself answering yes then this blog is perfect for you. Because moving huge wind turbine blades, extremely expensive aviation parts before the next air departure and other oversize and high-value cargo pieces can never be seen as “just another load”. They’re high stake loads in risk, but also financially, legally, operationally, and even reputational.

At PEI, urgent and non-standard freight is our daily bread. We frequently move anything expedited, heavy haul, emergency “drop everything” type of freight that other carriers decline on the daily. With our expertise in this area of truck transportation, we’re frequently asked these sorts of questions by shippers:

FAQ’s ❓

1. Who pays if my oversize, high-value freight hits and brings down a utility line?
2. How much cover do I really have when my freight is worth >$1 million but my carrier’s rate confirmation says $100k cargo protection?
3. If my emergency shipment is delayed, will I be reimbursed for my production line downtime losses?
4. Who files a claim, should anything go wrong?
5. Is damaged freight the shipper or the receivers problem to sort out?

We get it, we would want to know these things too if we were shippers. At the end of the day there’s no such thing as a stupid question especially when it could so severely impact your business. That’s why it’s super important for shippers to understand who’s responsible should things go wrong and how to protect yourself against legal liability. Although carriers in the U.S. are legally required to have cargo liability insurance cover, which is in place to protect them in the event that they need to make a payout. Whether it’s for cargo loss, or damage during transportation, this cover does not always cover total losses, because there’s a ton of limits, exclusions and a LOT of fine print.

So in this blog we’re aiming to help break it all down for you and give you some actionable tips to better prepare yourselves for shipping oversize and high-value freight and give you peace of mind throughout the process.

Carrier Liability 101 🧐

Carrier liability covers losses and damages sustained to freight during transit. Under the U.S. law, the Carmack Amendment, is a governing law that applies to transportation companies when they cross state lines while hauling freight. It’s goal is to tackle negligence causing damages, loss, and delays. It typically names the carrier as liable for freight damage unless they can prove a valid exception like:

• Act of god
• Act of war
• Act of public authority
• Act or omission by the shipper
• Inherent defect in the goods

So what’s the catch, it can’t be that straight forward?

Here’s The Catch & How One Missed Check Box Can Cost You Six Figures & How To Prevent It ❌

As we’re specifically talking about high-value freight in this blog, here is the catch. Standard carrier liability is limited to how much value is actually protected. It typically only stretches to cover $100,000 per load and does not cover freight with a value greater than this. You can try to minimize liability by always checking with your provider what kind of cover they provideand where possible opting for better cover, because it’s not uncommon for a carrier to only cover 50 cents per pound of freight, which doesn’t seem like a lot right?

Let’s put that into perspective, let’s say you’re shipping goods with a total value of $700,000 and the total weight is 100,000 lbs. Now imagine these goods make it to their destination in very poor condition, it actually means that your carrier might only owe you $50,000, that’s a huge $650,000 loss, for any company these kinds of numbers can be detrimental to your bottom line and have knock on effects to your business as a whole. It’s not impossible to claim more back, as long as you can prove that the carrier was at fault and caused the loss or damages, but it is very difficult. You will almost never get back the entire value of the cargo, without additional cover policies.

Other Scenarios When Carrier Liability Doesn’t Cut It ❌

There are a number of other scenarios that carrier liability also does not cover. One example is what they call concealed damages. If your freight is packaged in a box, and the box looks perfectly fine from the outside at delivery, but inside the contents are damaged, this may not be covered. The carrier can simply state that these damages were sustained before loading, this is why we would always recommend taking pictures of the actual freight before it’s fully packaged up and then grab some snaps after too, cover all bases.

Carrier Liability Vs. Freight Insurance 🤔

So, what was the checkbox that could have saved you more of your freights value in the instance of damages or loss? Well, you see carrier liability and freight insurance are two very different things. So opting to add additional cover can help you to re-coup more.

Declare the full value of your cargo on any paperwork, including the BOL (Bill of Lading) and any other shipping documents. Then if the value of your freight greatly out weights the limit of carrier liability, arrange for extra liability cover and / or cargo insurance. The extra cover will come at an additional cost, but it’s usually relatively small and offers you peace of mind. It could also mean the difference between going out of business and maintaining profitability.

Types Of Additional Insurance 📑

Take control of the outcome of damages, by adding the extra layer of insurance to protect your freight. Here’s some insurance options that you might want to take a closer look at:

Cargo Insurance

This insurance can be taken out by either the shipper, the receiver, or third party like a freight broker, it’s the most common type of insurance in the shipping world and covers physical damage and lost cargo.

All-Risk Insurance

This option is the most expensive insurance, but it’s also the most comprehensive and covers a larger range of risks.

Levels Of Insurance 📊

Basic Cover

This offers a minimal level of protection against accidental damage and natural disasters. This level of cover would not be recommended to the types of freight we’re focusing on in this blog. Any oversize and high-value freight would be better suited with a better cover than the basic option.

Broad Cover

This option covers more bases, and includes theft, non delivery and more. This is a better option for wider cover, and we would recommend paying the extra for this insurance over the basic cover.

All-Risk Cover

This one is the most expensive, but for good reason. It offers the highest level of protection against all risks, except for those that are specified. When shipping oversize and high-value freight this is the level of cover that we would recommend to be worth the extra cost.

Liability Of Damaged Goods 💥

You’d think this one is simple right? Your freight gets damaged during transit so it’s the carriers fault. Well, it’s not quite that simple. Sure, the carrier is liable and will be held responsible when damages are caused by their negligence, but this is only when there is proof. If the carrier can prove that proper packaging wasn’t provided then the liability falls back onto you, the shipper. Our advice, well document everything and like we mentioned earlier, snap some pictures of all of your shipments, these will serve as crucial proof in case any issues arise.

Liability Of Delayed Shipments ⏰

Now, this is a tricky one with a lot of blurred lines. Carriers can be held responsible and liable for delayed shipments if the delay was preventable, while in their care. However, if the delay was caused by things like severe weather conditions, natural disaster, road closures, or routine law enforcement stops then carriers will not be held to it. Again, like we mentioned earlier on about the Carmack Amendment. But delays can be very destructive, especially when speaking of the types of oversize, high-value cargo we frequently ship. They tend to have tight deadlines, and costly downtime, so not only costing you money, but also costing you your reputation when things don’t go right.

When Does Carrier Liability Start & End ⏱

Liability must have a defined start and end point for each group involved in the shipping of freight. The carrier’s liability begins as soon as your freight is loaded onto the truck and it’s ready for shipping, because at that point you and the carrier would have already agreed on terms, including liability conditions and would have a contract drawn up and signed, making the carrier now liable for the cargo.

Then, it’s as straight forward as the liability ending with the carrier once the freight reaches it’s final destination. The consignee will sign off on a POD (proof of delivery) stating the condition of the freight, including damages, etc. Then the carrier’s work is done and it’s down to the sole responsibility of the receiver.

Contractual Clauses 📃

Always triple check your carrier or logistics partners terms and conditions. Check thoroughly through fine print for:

• Limits of liability
• Force majeure clauses – this removes liability and excuses performance of the contract
• Claims deadlines – some carriers have shorter claim windows than others, don’t get caught out
• Exclusions of liability

Who’s Responsible For Filing A Claim? 🗄📝

Now that we’ve outlined when the carrier is liable. What this doesn’t tell us though is who is responsible for filing a claim should the consignee find damages or if the freight is delayed. Is it the original shipper? or the receiver? So, there is a simple term, FOB “Free On Board” that’s applied to a bill of sales so that all involved know who takes ownership of the shipment, liability, and chases claims and it also clearly outlines at what point in the process this switch up happens.

The two FOB categories are: FOB Origin and FOB Destination.

FOB Origin

FOB origin omits liability and responsibility from the shipper at the point of origin. Meaning the receiver or buyer takes on liability, and is responsible for filing lost, damaged, stolen or delayed freight.

FOB Destination

FOB destination is the polar opposite, this means that the shipper has ownership of the freight in transit right up until the point it is received by the consignee. Which in turn, makes them responsible for filing for any lost, damaged, stolen or delayed shipments. It’s important to have a good communication channel between the shipper and the consignee, so the consignee can relay the condition of the cargo when delivered, what time the freight arrives and if some pieces are missing. This way the shipper can file a claim with the correct information.

How To Reduce Liability Exposure 🔻

✅ Work with a specialist freight broker or carrier

✅ Add on the right insurance

✅ Declare the entire freight value

✅ Use appropriate packaging

✅ Document everything

✅ Distinguish loading and unloading responsibilities

Conclusion 💭

When you understand your exposure to liability, then you realize how important it is to partner with an expert logistics provider and take the right precautions to not only make sure you’ve covered yourself but also your business and customers. Liability should not be treated as an after thought. Instead it should be spoken about thoroughly with terms written out clearly in contracts. Use the checklist above to keep ahead of complex liability disputes.

Need Help With Your Oversize And High-Value Freight? 😊

At PEI we’ve helped thousands of business in all kinds of industries with their oversize and high-value freight shipments. Let us handle your tough shipments, we can help with: liability, planning, insurance, route planning, permit management, safe loading, unloading and full door to door co-ordination. Get in touch using the link below or call us on: 888-SHIP-911

Need help with any of your specialized oversize and high-value domestic shipments?

Today can be the day you stop struggling with your logistics problems.

At PEI we’re experts in dealing with specialized freight and can handle yours with any custom requirements.