Cargo goes missing, arrives crushed, thaws in a failed reefer, or is delivered to a warehouse that turns out not to exist. What follows is a claim, and cargo claims do not work like ordinary property damage cases. Interstate motor carriage is governed by a federal statute that replaces state law, imposes something close to strict liability on the carrier, and then lets the carrier limit that liability and enforce deadlines that are shorter than any statute of limitations most business owners expect.
The Law Offices of Albert Goodwin handles cargo loss and damage matters in New York City for shippers pursuing recovery and for carriers, brokers, and warehouses defending claims.
The Carmack Amendment in Practice
The Carmack Amendment, codified at 49 U.S.C. § 14706, governs liability for loss or damage to goods moving in interstate commerce under a bill of lading. Two consequences follow immediately.
First, Carmack preempts state law claims for cargo loss. A shipper who sues a motor carrier for negligence, breach of contract, or consumer protection violations arising from damaged freight will generally find those claims dismissed as preempted, leaving only the Carmack claim. Pleading the case correctly from the start avoids losing months to that motion.
Second, the liability standard favors the claimant. A shipper establishes a prima facie case by proving three elements:
- The goods were delivered to the carrier in good condition;
- They arrived damaged, short, or not at all; and
- The amount of damages.
A clean bill of lading is ordinarily sufficient proof of the first element for goods whose condition is visible at tender. Once the prima facie case is made, the burden shifts to the carrier to prove both that it was free from negligence and that the loss falls within one of five recognized exceptions: an act of God, an act of the public enemy, an act of the shipper, an act of the public authority, or the inherent vice or nature of the goods. The carrier must prove both halves. Establishing that the shipper loaded and blocked the freight, for example, does not excuse the carrier if its own driving contributed to the shift.
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The Common Carrier Defenses in Real Cases
- Act of the shipper. Shipper load and count, defective packaging, improper blocking and bracing, and incorrect temperature instructions on the bill of lading are the defenses raised most often, and they succeed when the carrier can show it had no reasonable opportunity to inspect and that the fault caused the loss.
- Inherent vice. Produce that was already past its useful life, chemically unstable goods, and moisture-sensitive commodities shipped without protective packaging.
- Act of God. Narrower than clients expect. Ordinary winter weather in the Northeast is foreseeable and rarely qualifies.
- Act of the public authority. Seizure, quarantine, or condemnation, frequently seen with food and pharmaceutical shipments rejected by an inspecting agency.
Limitations of Liability and Released Rates
Carriers may lawfully limit liability to a value agreed with the shipper, commonly expressed as a released rate of a stated amount per pound. To enforce a limitation, the carrier generally must have given the shipper a reasonable opportunity to choose between two or more levels of liability at differing rates, and the agreement must be reflected in the bill of lading or the governing contract. Limitations buried in a tariff that the shipper never saw, or applied to a shipment moving under a negotiated transportation agreement that says otherwise, are frequently defeated.
This is where most cargo cases are actually decided. A $180,000 electronics loss becomes a $12,000 case if a $0.50 per pound limitation applies, and stays a $180,000 case if it does not. We examine the tender documents, the rate confirmation, the carrier's tariff and how it was incorporated, the shipper's transportation agreement, and the history of the parties' dealings to determine which controls.
Deadlines That End Cases Before They Start
Bills of lading and contracts routinely require that a claim be filed in writing within a stated period and that suit be brought within another. Under 49 U.S.C. § 14706(e), a carrier may not provide a period shorter than nine months for filing a claim, nor shorter than two years from the date the carrier gives written notice disallowing the claim for bringing a civil action. Those minimums are, in practice, the actual terms in most bills of lading.
What counts as a proper claim is governed by 49 C.F.R. Part 370: written or electronic communication, filed with the proper carrier, identifying the shipment with reasonable certainty, asserting liability for a specified or determinable amount of money, and making a claim for payment. A note in a portal, a phone call to a dispatcher, or a deduction taken from an invoice is not necessarily a claim. Shippers lose valid claims on this point every year.
Worked example. A shipper discovers concealed damage two weeks after delivery, emails photographs to the carrier's claims address, and hears nothing. Eleven months later, having replaced the goods, it sends a formal demand for $96,000. The carrier denies the claim as untimely. Whether the earlier email satisfied Part 370, whether the carrier's conduct waived the requirement, and whether the concealed damage rule extends the period are the questions the case turns on, and they are far easier to answer favorably if counsel is involved in month one rather than month eleven.
Who Is Liable: Carrier, Broker, or Warehouse
Carmack applies to motor carriers and freight forwarders, not to brokers. A shipper that thought it hired a carrier, but actually hired a broker, may find that its Carmack claim fails against the party it sued while the deadline to sue the actual carrier has run. Determining a party's role requires looking past the name on the invoice to the operating authority, the contract, and how the transaction was actually conducted. Where a broker held itself out as a carrier, courts have permitted Carmack claims to proceed against it.
Delivering carriers, originating carriers, and connecting carriers each have potential exposure, which matters in interline and intermodal movements. Storage in transit can shift a loss into warehouse law under Article 7 of the Uniform Commercial Code instead of Carmack, with a different liability standard and different limitation rules. See our pages on freight broker liability and warehouse and 3PL claims.
What Damages Are Recoverable
The ordinary measure is the actual loss or injury to the property, generally the difference between the market value of the goods at destination in the condition they should have arrived and their value as delivered, plus freight charges where appropriate. Special or consequential damages, including lost profits and downstream customer penalties, are recoverable only where the carrier had notice of the special circumstances at the time of contracting, a demanding standard. Attorney fees are generally not recoverable in a non-household goods Carmack case absent a contractual provision, which makes fee shifting language in a transportation agreement worth negotiating.
Salvage, Mitigation, and Insurance
A claimant must mitigate. Destroying rejected freight without offering the carrier salvage rights, or refusing a reasonable salvage bid, reduces recovery by the salvage value. Food, pharmaceutical, and cosmetic shipments raise the additional problem that a claimant may be legally barred from reselling adulterated product, which strengthens a full-value claim if documented properly at the time.
Cargo insurance and the carrier's liability are different things. A cargo policy may exclude the very loss at issue, unattended vehicle theft and reefer breakdown exclusions being the most common traps. Where a carrier's insurer denies coverage but the carrier remains liable, the practical recovery question becomes collection against the carrier. See breach of warranty and commercial collection.
Ocean, Air, and Cross-Border Shipments
Carmack does not govern the ocean or air legs of an international movement. Ocean carriage into and out of United States ports is generally subject to the Carriage of Goods by Sea Act, with its own one-year suit deadline and a package limitation of $500 per package or customary freight unit absent a declared higher value. International air carriage is governed by the Montreal Convention, with its own weight-based limits and notice periods. Shipments moving under a through bill of lading can produce genuinely difficult questions about which regime applies to a loss discovered at the end of the journey. See freight forwarders and NVOCCs.
Bring Us the Bill of Lading
Cargo claims are document cases. The bill of lading, the rate confirmation, the delivery receipt with its exceptions, the temperature download, the photographs, and the claim correspondence determine the outcome more than anything a witness will say two years later. We evaluate claims for shippers and defend them for carriers, brokers, and warehouses, in New York state and federal court. If you have received a claim, a denial, or a lawsuit, or if you are sitting on a loss and are unsure whether you have preserved it, contact us before the next deadline passes.
Call the Law Offices of Albert Goodwin at 212-233-1233 for a consultation.
You can contact us by phone at 212-233-1233 or by email at [email protected].
