Flaster Greenberg shareholders Eric Palombo and Chris Merrick, co-leads of the firm's Transportation, Logistics & Supply Chain Practice, recently discussed the complex legal frameworks governing damaged freight claims during an In-House Connect webinar, “Managing Supply Chain Risk: Five Critical Issues for In-House Counsel.”
Their presentation emphasized a critical point that is often overlooked by companies evaluating cargo loss or damage claims: state negligence law is rarely the governing standard. Instead, liability is typically determined by a patchwork of federal statutes, international conventions, bills of lading, tariffs, and private transportation contracts.
Using the example of an international shipment of Parmesan cheese moving from Italy to the United States, Palombo explained that identifying liability requires first determining where in the supply chain the damage occurred. A single shipment may involve multiple transportation providers, custody transfers, and legal regimes, each carrying different liability standards and limitations.
As Merrick noted, transportation laws frequently preempt state law claims, including negligence standards, statutes of limitation, and venue provisions. Depending on the mode of transportation, liability may be governed by the Carmack Amendment, maritime law, the Montreal Convention, or other specialized legal frameworks.
The speakers also highlighted the risks that arise when legal and contractual regimes are not aligned across different segments of a shipment. These gaps can create unexpected exposure, including uninsured losses and limitations on recovery that companies may not anticipate.
For in-house counsel and risk managers, understanding which legal framework applies before a dispute arises is essential to effective contracting, insurance planning, and supply chain risk management. As global supply chains become increasingly complex, identifying the governing liability regime at the outset can make a significant difference in the outcome of a claim.
For more information about Flaster Greenberg's Transportation, Logistics & Supply Chain Practice, contact Eric Palombo or Chris Merrick.
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