Parcel - July 2008 - (Page 8)

what would augello say? by Brent Wm. Primus, J.D. Staying Out of Trouble William J. Augello was one of the country’s foremost transportation lawyers and a champion of shippers’ rights. In this column, we attempt to answer readers’ questions as we believe he would. Previous columns, including Bill Augello’s, may be found in the “Content Library” on the Parcel website (www.PARCELindustry.com). In previous columns, we have examined issues and problems involved in shipper-carrier transactions. In this issue, we will be shifting our focus to concerns for parcel shippers that, although related to the movement of products through the supply chain, arise separately from the shipper-carrier relationship. This is part one of a two-part series. As used here, the term “shipper” may mean either or both a “consignor,” the person tendering the goods to the carrier, and a “consignee,” the person receiving the goods from the carrier. The duties and exposures to lawsuits for consignors and consignees fall into ﬁve broad categories. These duties and exposures may arise from contractual obligations or federal and state statutes and regulations or decisions of the courts or a combination of these. The ﬁve categories are (1) packaging, (2) marking and describing, (3) terms of sale, (4) duty to accept goods on delivery and mitigate loss, and (5) liability for personal injury and wrongful death. Before getting into the details of this topic, I would like to take this opportunity to let you know that I will be presenting an all-day pre-conference workshop on Monday, October 6 at the PARCEL Forum. This special course is designed to provide a basic working knowledge of the laws and regulations affecting the supply chain, with a special emphasis on parcel shipping. The details may be found at www.PARCELforum.com. Attendees will receive a copy of William J. Augello’s Transportation, Logistics and the Law, and those registering by July 11 will receive a $200 discount. I am really looking forward to this event as it will provide me with an opportunity to meet the readers of this column and to better understand the unique concerns of the parcel shipper. Packaging. A consignor’s duty to properly package the products being shipped typically arises from a carrier’s packaging requirements, which are “incorporated by reference” by the bill of lading or other shipping document issued by the carrier when receiving the goods. Parcel carriers such as UPS, FedEx and DHL all have detailed requirements set forth in their own service guides. Many less-than-truckload (LTL) carriers participate in the National Motor Freight Classiﬁcation (NMFC) which also has packaging requirements. When a consignor fails to adhere to those requirements, no law is being broken; however, the consignor (or its consignee customer) may not be able to recover a damage claim as a carrier would in all likelihood deny the claim for “insufﬁcient packaging.” Failure to comply with a carrier’s packaging requirements can also lead to increased freight charges. For example, Item 687 of the NMFC imposes a 20% surcharge for non-compliance with the NMFC’s packaging requirements. Indeed, if the shipments are not packaged at all, so as to be considered “loose articles,” the provisions of Item 423 of the NMFC call for increased freight charges nearly triple those if the article was packaged! Also, consignors and consignees have additional duties imposed upon them by various federal and state laws. For instance, the regulations of the Food & Drug Administration (FDA) include provisions relating to food products that were contaminated or may have been contaminated during transit. The United States Department of Transportation (DOT) administers the Hazardous Materials Regulations relating to “hazmat” shipping. The ﬁrst step for a shipper to comply with these laws is to determine whether the products it ships are subject to them. With respect to hazardous materials this is not always obvious or intuitive. It should be kept in mind that many products are subject to more than one category of these regulations, e.g. a drug item, which could also be considered “hazardous material” if shipped in certain quantities. Marking and Describing. Shippers can also get into trouble by failure to properly mark or identify the goods being shipped. In addition to packaging requirements, the NMFC contains requirements relating to certain pictorial symbols to be placed on the outside of the package which, if not followed, would be considered to be “insufﬁcient packaging” in the context of a loss or damage claim. The consignor also has the duty to properly describe the goods on the bill of lading. At least one case has held that where a shipper had intentionally mis-described the goods to obtain a lower rate, the shipper was unable to recover the full value of a lost shipment. When shipping hazardous materials, the requirements for proper marking and identiﬁcation become extremely important. Failure to follow them can result in both civil and criminal penalties extending to not only the corporate entity but also to an individual. To be continued in the next issue …. Brent Wm. Primus, J.D., currently serves as the General Counsel for the Freight Transportation Consultants Association and is the CEO of transportlawtexts, inc. and Primus Law Ofﬁce, P.A. Your questions are welcome at brent@transportlawtexts.com. 8 July 2008 www.PARCELindustry.com http://www.PARCELindustry.com http://www.PARCELforum.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - July 2008

Parcel - July 2008 Contents Editor's Note What Would Augello Say? Arriving in One Piece Women in Logistics & Delivery Services Turning U-Turns into No Returns On the Mark New Products and Services Advertiser Index Wrap Up AFMS Best Way Technologies Blue Water Consolidators Cass Information Systems Distribution Management Group, Inc. Eastern Connection Endicia enVista Zsolt Design Engineering Genco Green Mountain Consulting Hasler Intravex NPI Parascript Precision Software Scancode Systems Inc. Vitronic

Parcel - July 2008

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