Minimize Risks in Shipping
Understanding supplier liability in loading, transport and delivery
November 20, 2017
Transportation of goods in interstate or international commerce is heavily regulated. There are laws and treaties governing who, what and how products are moved, allowing standard cargo claims to be resolved quickly. Less regulated, however, are claims brought against the shipper for accidents and injuries relating to securement and loading/unloading of cargo. Our office is beginning to see these claims more regularly. However, these actions find themselves in areas where the structural rules governing cargo and transportation are murkier.
Many shippers feel protected from risk once the trailer or truck is loaded. This is not so. Accidents and injury from load-shifting during transport are frequent. Clearly, if there is an accident involving a company-owned and loaded truck, that company retains the risk. But where a third-party hauler is used, legal theories have evolved that try to balance the responsibility for loading between the shipper and carrier.
The Savage doctrine is one such theory. It comes from a decision of the Fourth Circuit Court of Appeals in the mid-1950s. Generally, the doctrine says that the carrier has the ultimate responsibility for safety of the loads it hauls. When a shipper loads goods on its own premises, however, that shipper can be responsible for any hidden conditions of the load. A shipper can also be responsible when it tells the carrier that the load is secure, and the carrier reasonably relies on that representation.
Savage has helped define the responsibilities of the shipper and carrier for decades. It can even be used to shield a shipper from injury claims brought by third-parties. More recently, however, lawyers have succeeded in bypassing Savage by filing non-transportation claims against shippers. For example, a lawsuit where the shipper was alleged to have improperly hired a carrier resulted in a verdict of more than $4 million. A Pennsylvania court also recently refused to apply the Savage doctrine because the shipper failed to provide securement devices that it “regularly” provided.
Shippers are also exposed to claims by those handling their products. Injuries to carrier or third-party employees remain a risk. And while worker’s compensation can protect the direct employer, the injured party may still seek relief against the shipper for claims relating to the nature of the load, its securement or packaging. These claims all have the potential to bypass cargo laws and shipper protections like Savage.
How does a shipper protect itself if the rules are not clear? By being able to document the consistent enforcement of reasonable policies and contracts. And, while specific facts make each claim unique, attention to a single shipment can inform a broader policy.
Start with the loading.
Evaluate the nature of what is being shipped. Attention to packaging and ease of loading can protect workers. Evaluate requirements for personal protective equipment and mechanical assistance devices to ensure employees are safe, and consider whether special warnings for those offloading are advisable. Ensure that employees are loading securely and can document that procedure. High-volume shippers may consider directed loading policies, and documenting each individual load’s securement device or devices and condition prior to sealing the trailer.
Do some due diligence regarding the carrier.
Ensure proper compliance with, and documentation of, applicable Federal Motor Carrier Safety regulations. Confirm necessary cargo insurance to protect against loss of the products, and necessary general liability and auto-related insurance so that time on-the-road and in-the-dock is covered from risk of loss. Consider whether an independent hauler agreement is needed with carriers. Bills of lading can speak to responsibility for the goods, but will not necessarily clarify who is entitled to indemnity for a product-handling injury.
Do not lose sight of the unloading.
Once goods arrive, and the carrier has brought them to their destination, those offloading the products are generally in control over the means and methods of that process. Regardless, a shipper should consider whether to advise, warn or even recommend certain procedures to those receiving the goods. While the shipper cannot control another company’s employees, warnings and contracts that address offloading can help clarify this murky legal area.