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 Transport Claim & Liability Prevention Index - For Forwarders & Customs Brokers

1. Use Qualified Carriers - Always Pre-Qualify

2. Use Terms & Conditions of Service

a. CREDIT APPLICATION

b. CUSTOMS BROKER POWER OF ATTORNEY

c. SHIPPERS LETTER OF INSTRUCTION - "SLI"

d. INVOICES

e. OTHER DOCUMENTS

Study Guide >> Understanding & Using "Terms & Conditions of Service"

Study Guide >> The Shipper's Agent - why there is no liability for the forwarder

Study Guide >> U.S. Circuit Court Of Appeals Cases Upholding "Terms & Conditions of Service"

Study Guide >> U.S. Case Holds That Shipper's Agent Forwarder Is Not Liable For Cargo Damage Under U.S. Law - Prima Vs. Panalpina

Study Guide >> U.S. Case example of "Travel Agent" connection to cargo - a pictorial

Study Guide >> The Text of "Terms & Conditions of Service"

3. Advertising & Web Pages

5. The Freight Detective's Cargo Loss Prevention Center

6. International Vessel Casualties & Pirates Database - The Forces of Pirates & Weather on Seaborne Commerce

7. Central Tutorial Index of Cargo Industry Training Guides

8. Cargo Loss Prevention Resource Center

NOTE: Additional Materials Coming Soon To This Page

 Use Qualified Carriers - Always Pre-Qualify

To avoid claims pre-qualify carriers. A qualification check list to "pre-qualify" carriers and other service providers could be helpful to your operations. As you know, many problems can be avoided by asking questions in advance and putting the onus on others to prove to you that they are qualified to do what they claim they can do. Here are some "basic" criteria to selecting carriers. This is not an exhaustive list, but it is a starting point that may help. Create a carrier data base for each mode of transportation, by port

Pre-qualify the carrier by faxing them a letter requiring the following information in advance and requiring them to give you thirty (30) days notice of any changes: The basic qualifications are as follows:

_ Operating authority, DOT, PUC, or other agency (s);

_ Proof of Insurance ( Cargo & Liability ) - Request to be an also named insured, if applicable;

_ Does the amount of insurance fit the value of the goods shipped;

_ Bond # if Customs Bonded Carrier, and date of expiration;

_ Limits of Liability & Terms and Conditions of Service;

_ Tariff, if applicable;

_ Do they own & operate all the used equipment;

_ Do they interline or have partnerships to route freight & to meet service schedules

_ Specialized equipment, such as refrigerated units, lift gate, etc.,

_ Special permits, such as DOT Hazardous Cargo Certificate; and

_ Referrals or recommendations from other shippers / forwarders.

Use Terms & Conditions of Service

"Terms & Conditions of Service" are the standard contractural trading conditions for freight forwarders and customs brokers in the United States. Similar rules are followd by other major trading nations of the world. These Terms & Conditions of Service define a proper understanding of our industry and responsibility for use of selected carriers & handlers. These Terms & Conditions of Service encourage customer involvement and use of marine cargo insurance.

Shippers & importers have notice of and are deemed to accept Terms & Conditions of Service if the freight forwarder or customs broker has used proper contract documents. Use of Terms & Conditions of Service to define the contract with shippers, importers and other customers has been valiated by numerous published opinions of the U.S. Circuit Courts of Appeal.

For a review of Terms & Conditions of Service, and how they are followed by the courts, in such trading nations as France, the UK and Kong Kong, vist our section on this subject at The Transport Law Navigator

To read the full text of Terms & Conditions of Service - CLICK HERE

To read more about Terms & Conditions of Service in the context of transport documentation - CLICK HERE

Notice of Terms & Conditions of Service can be given by various methods, as follows:

CREDIT APPLICATION

This traditional business form should be signed by all of your prospective clients. Sales persons should have no objection to getting a signed a credit application as part of the normal course of business. The following language should be included above the signature line.

"All services and transactions are subject to our Terms and Conditions of Service (NCBFAA 6/94) which are printed on the reverse side of this application and our invoices. Applicant expressly acknowledges receiving a written copy our Terms and Conditions of Service (NCBFAA 6/94). Our liability is limited to the extent provided by law our bills of lading, if issued, or $50.00, whichever is less."

Of course all credit applications should be printed with your Terms and Conditions of Service (NCBFAA 6/94) on the reverse and the reverse side should be sent to the applicant when faxing the application.

CUSTOMS BROKER POWER OF ATTORNEY

U.S. Customs requires that a broker have a signed power of attorney prior to conducting customs business on behalf of an importer. 19 CFR §141.31-.32. The following language should be included above the signature line.

"All services and transactions are subject to our Terms and Conditions of Service (NCBFAA 6/94) which are printed on the reverse side of this power of attorney. Grantor expressly acknowledges receiving a written copy our Terms and Conditions of Service (NCBFAA 6/94). To the extent provided by law, our liability as a customs broker is limited to $50.00 pursuant to19 USC §1641 (f)."

SHIPPERS LETTER OF INSTRUCTION - "SLI"

This traditional international forwarder form eines the contract with shippers, importers & other customers. It should be signed by all of your clients when tendering a shipment. The following language should be included above the signature line.

"All services and transactions are subject to our Terms and Conditions of Service (NCBFAA 6/94). Our liability is limited to the extent provided by law our bills of lading, if issued, or $50.00, whichever is less."

Of course all credit applications should be printed with your Terms & Conditions of Service (NCBFAA 6/94) on the reverse and the reverse side should be sent to the applicant when faxing the application.

INVOICES

Please make sure Terms and Conditions of Service are printed on the reverse side. Also make certain that the front of the invoice clearly states your limit on liability and directs the recipient to refer to the reverse Terms & Conditions of Service. This is best done in at least 10 point font and preferably in bold lettering. This use of Terms & Conditions of Service to define the contract with shippers, importers and other customers has been valiated by numerous published opinions of the U.S. Circuit Courts of Appeal.

OTHER DOCUMENTS

In order to further reduce the risk of litigation, we suggest that you also incorporate the same Terms & Conditions language into footers of fax cover sheets, quotations and proposals sent to your customers. A discrete footer should not interfere with your sales efforts. Frankly, this language is no different than those of other carriers similarly situated.

Advertising & Web Pages

Like any other document provided to your customers, advertising and web pages create prospective legal issues. Before sending advertising or posting a web site we recommend the following: (1) That you post a suitable disclaimer at your Web site which designates the "place of suit" and requires that all disputes be resolved at an agreed location, such as the city in which your corporate headquarters is located; (2) That you post a suitable disclaimer at your Web site which states directly that a particular offer is limited to specific states or countries only; (3) That you specifically exclude any country or state where you do not wish to do business; (4) That you develop an insurance plan to cope with web sites and Internet and E-Commerce operations.

More information on this important subject is available at our The Freight Detective's Electronic Commerce & Internet Center.

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