The Carmack Amendment was a 1906 revision to the Commerce Act of 1877, which addresses the liability of shipping carriers. This amendment determined that instead of making a shipper prove the carrier negligent in case of damaged goods during transit. The damaged or destroyed goods themselves were enough to satisfy the shipper’s burden of proof. Basically, the law made the carrier the one to prove it wasn’t responsible for any damaged cargo under its care.
Although the Carmack Amendment has been around for over a hundred years, there are still some misunderstandings often associated with it. To help clear them up, we’ve highlighted some of the most common misconceptions and provided clarifications below.
Misconception: The carrier is always held responsible, regardless of how the shipment was damaged.
The carrier is responsible for damages unless they meet one of the exceptions outlined in the legislation. For instance, a carrier is not liable for damages that occur due to an act of God, such as floods or strong winds, or government interferences like a product recall or quarantine. Even the “inherent vices” of the goods are taken into account, such as if the cargo was extremely flammable or prone to decay or defects.
Furthermore, if the carrier can prove it was not negligent, it won’t be held liable either. For example, if the carrier can provide evidence that the shipper was at fault for packaging the cargo poorly or loading it incorrectly, the carrier could avoid liability.
Misconception: This amendment pertains to any and all carriers transporting goods.
There are a few exceptions when it comes to this kind of coverage. For starters, this amendment only applies to interstate freight forwarders and motor carriers. That is, carriers that are transporting goods across state lines or between the U.S. and a foreign country. This means the statute doesn’t cover intrastate operations (those that stay within the same state).
Misconception: There are no time limits for filing claims and bringing about lawsuits.
There are actually a couple of time limits set forth under this amendment. The first is that a carrier must allow at least nine months for a shipper to file a claim, which means a carrier can’t require them to file any sooner. And the second is that the shipper has at least two years to initiate legal action.
Misconception: This law covers all types of goods in transportation.
Not every piece of cargo is protected under this law. Some of the exceptions include commodities shipped by mail and those shipped by air. Goods shipped by fishermen and farmers, such as fruits and vegetables, are exempt under this statute, too.
Making sense of legal jargon can be tricky at times, but it’s pertinent to know the ins and outs of cargo legislation and insurance regulations that impact the shipping industry. To learn more, contact Falvey Insurance Group today.
