Transportation companies provide the specialized labor, heavy equipment and logistics necessary to transport goods and services over large distances. Transportation businesses may provide over-land options for domestic manufacturers or even international maritime transportation.
Commercial carriers negotiate contracts with clients that ensure they receive appropriate compensation for the services they provide. They may also need to include provisions in their agreements that address the company’s operational liability. Even with the best equipment and safest professionals on staff, commercial carriers must acknowledge the possibility of lost or damaged cargo.
Damage can be out of the carrier’s control
Providing workers with proper training can go a long way toward reducing cargo losses and damage. So can the maintenance of equipment. However, even the most proactive company can face costly claims from clients due to circumstances outside of the company’s control.
Many situations can lead to the loss of valuable client cargo. In scenarios involving maritime transportation on the ocean or navigable waterways, storms are a concern. Vessels might sink or take on water, both of which could result in damage to client cargo or a total loss.
There is also the constant threat of theft to consider. Piracy is an issue on the open ocean. Criminals may also target semi-trucks or even take crates and barrels from idling trains. Outside parties could steal cargo, resulting in client complaints. The failure of temperature controls or incidents that result in physical damage to cargo are also all risks that cargo carriers have to address.
Contracts help limit liability
Many transportation companies specifically require that clients disclose the items they want transported and an estimate of their value. Carriers often limit their liability based on those disclosures. They may also carry insurance to protect against losses. In some cases, carriers may even require that clients carry cargo insurance to prevent large losses and expensive claims.
When a cargo damage scenario does arise, negotiating with a client can also help limit organizational liability. Client contracts could include provisions that require alternative dispute resolution before a client attempts to initiate litigation over the matter.
The right support can often make a significant difference for commercial carriers concerned about the risk of a client cargo claim. Proactively addressing the possibility of organizational liability and being ready to respond when an incident arises can help optimize company profits while minimizing exposure.