Wednesday, January 17, 2007, 01:12 PM
America’s estimated 1,000,000 business establishments who purchase transportation, listen up. The Supreme Court of New Jersey ruled that the estate of the deceased from a truck/car accident involving the cargo of the shipper “Allied Waste/Browning Ferris” can seek to hold the shipper liable in the deaths of Kevin and Alicia Puckrein, as the shipper ordered transportation service from an unqualified (incompetent) motor carrier (inadequate brakes and no insurance and not DOT registered). The Court held that “a non-delegable duty on the principle (shipper-BFI-NY/Allied Waste) to assure safe transport of its goods on the public highways” exists.
The net effect for Shippers is that they must check the Motor Carrier “Authority” the Public and Cargo Liability “Insurances”, and the “Safety Rating” of the motor carrier before contracting for transportation service . Failure to make the effort could be a costly exposure.
Shippers will be insulated from this exposure by working with a qualified Licensed Brokers, who will provide a test of motor carrier competency before hire, just as working with brokers shielded them in the past from “undercharges”
Throughout transportation history shippers have been immune from consideration of negligence in their for hire purchase of motor carriage. Prior to this case, shippers and manufacturers largely engaged in purchasing trucking services over Americas highway enjoyed certain immunity as argued by defendants lawyers(“common law negligence principles applicable to hiring an incompetent independent contractor”). Shippers were beyond reach for assignment of negligence in truck accidents involving their cargoes, until the “Puckrein” case.
Shippers have been completely misguided by the United States Government since 1/1/1981, the first day of trucking deregulation, in their relationship with for-hire motor carriage. Deregulation began with the adoption of a new national transportation policy, calling for complete hands off approach to the shipper –motor carrier interaction. But due to incapable executive leadership, bureaucrats left in place the so called “Filed Rate Doctrine” that lead to over $75 Billions in “Undercharge Claims” by bankrupt motor carriers against the shipping public. Now the court system is getting into the act in that the “Puckrein decision” makes the shipper liable for the “Public Safety” in the tender of their cargoes to motor carriers. The court is making “new law” according to the law firm who successfully argued Puckrein case for the plaintiffs.
Brokers are considered “shippers” by the Negotiated Rates Acts of 1993 and 1995, laws requiring written contract between shippers and motor carriers. Prior to these Acts, Brokers, in general were using simple contracts and checking motor qualification in contracting for motor carrier service. The new laws initially required a “written contract“ between a shipper and motor carrier for every load. The 1995 Act emasculated the 1993 requirement for a written contract by changing the word “must have” to the “may have a written contract”.
In the process of this Contracting the Broker(shipper) obtained and verified the Motor Carriers “competence” by reviewing and verifying the motor carriers “fitness” often using devices such as “safer system” found on DOT website. It would seem then that shippers, who are not brokers, should be doing the same thing, or are they now required by this “New Law” in order to avoid possible liabilities?
Today the written broker/motor carrier contracts have ballooned to as many as 30 pages. These typical extensive agreements have generally been at the expense of motor carrier rights and for the broker’s assumption of liability (both public and cargo), whether they know it or not.
Broker consider themselves immune from public or cargo liability because they have a “License” . Under certain and very select criteria they may be immune. The truth as found in common practice is that 90% of brokered transactions that occur, (estimated at $350 Billions in 2005) , the Broker, with his extensive Contract, create several liabilities for public and cargo loss. Example, the Broker Contract that requires motor carrier “Driver” to call in to the Broker before 9 AM or pay a fine” broker is definitely controlling the actions of the motor carrier person liable for Public Safety. Why a Broker, who is in the transportation contract for 15 to 20% commission, make themselves 100% liable for loss, I will never understand.
As the US Government got out of the business of enforcing motor carrier tariffs, fuel surcharges, and the other forms of economic regulation, they left open the door for laissez faire shipper-motor carrier interaction. In fact, under the Clinton Administration this hands-off government policy reached its zenith, only to settle back into a pro active hands-on safety interaction with new motor carriers by the Bush administration. Obviously, government regulations will not extend government regulatory oversight to shippers and their motor carrier relationships, making them easy prey for lawyers in the over 5,000 annual fatal truck accidents.
Shippers beware hiring an unqualified broker or motor carrier. Your new exposures to this liability may be insurable. Shippers can very quickly and easily require all motor carriers who bump their, or their vendors docks, to prove “fitness” to haul their cargo. They can with a few “clicks” access www.fmcsa.dot.gov and enter the motor carrier MC or DOT number to get a clear verifiable picture of the tendered motor carrier qualifications and “Fitness”. The mere act of doing this will protect them, something the shipper in this case should be deeply involved in. Or the Shipper can tender their loads through a qualified licensed property broker, who will provide this service for their own protection as well as that of the shipper.
Here are some suggestions to help shippers avoid hidden liabilities of purchasing transportation:
First obtain and verify (1) Motor Carrier DOT Authority, (Grant from US Government to cross State lines with your freight in possession).(2) Motor Carrierr’s Insurance Acord Form, or visit fmcsa.dot.gov using motor carriers MC number and verify Motor Carriers fitness in safety to haul your goods, (3) collect the obligatory W-9 for the IRS 1099 report for any motor carrier you intend to vend more than $600/year,
Second, require a written Contract signed by the motor carrier specifying the following simple declarations that they have represented themselves as qualified within the meaning of the law.
a) Motor Carrier represents they are an Independent Contractor who is competent to haul freight and is one hundred percent liable and responsible for and insuring the public and cargo against loss,
b) Motor carrier is entitled to engage the services of another motor carrier or broker to another motor carrier, but remains one hundred percent liable for public safety or cargo loss, as this Contract may not be assigned or construed to be otherwise.
For a free sample of a one page Shipper/Motor Carrier Contract.
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( 3 / 1922 )Monday, August 28, 2006, 10:28 AM
Read his interview at the link below.http://www.sfgate.com/cgi-bin/article.c ... amp;sc=749
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( 2.9 / 2992 )Monday, July 31, 2006, 01:42 PM
Hi, I’m David G. Dwinell, entrepreneur, businessman and Master Broker. Since 1987 I’ve built and sold several thriving transportation businesses, authoring/creating training facilities for those getting into the worlds largest business. And now I want to share my knowledge and experience with you. So check back frequently to see what I have to say on the subject of trucking, brokering, business and transportation. | [ 0 trackbacks ] | permalink |
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