The potential peril of trailer dropping

Henry Seaton is a lawyer who represents carriers in contract disputes, collection matters, cargo claims and insurance questions. E-mail [email protected].

Q For its convenience, a grocery warehouse encourages us to drop loaded trailers on its unguarded lot. The trailers are later unloaded by an in-house lumping service. Live unloading is discouraged because it interrupts the warehouse’s cross-dock operations. One of our drop trailers was stolen and now the consignee’s broker has withheld freight payments. It claims the risk of loss was ours and that the shipment was our responsibility until it was unloaded in the warehouse. Can this be right?

A Your situation is not an isolated occurrence, and the facts are more complicated than your question suggests. The grocery house in question makes carriers sign draconian agreements with its logistics provider and its in-house lumping service. Thefts from lots are reportedly a common occurrence that can simply be solved by a gate and a guard.

Because of the gap in cargo coverage for theft from an unguarded lot, carriers need to be especially concerned about potential exposure of loaded trailers on drop lots. If your loaded trailer is on the consignor’s or the consignee’s property and not in your driver’s custody and control, you should make clear that the risk of loss by theft has not passed to you.

Be careful when executing agreements with lumping services or spotters who are hired by consignors and consignees to service their facilities. Under the anti-lumping statutes (49 U.S.C. 14101, 14905) you can’t be required or coerced to hire them in the first place. You certainly should not be required to assume liability for theft after you delivered the load because the lumper and the consignee didn’t protect the shipment or timely unload it.

Although the case law is fact intensive, unless anything further is required to be done by the carrier, delivery is deemed to have been accomplished when a shipment is brought to a consignee’s place of business and spotted by the motor carrier – regardless of whether the consignee ultimately accepts or rejects the load. [M Tech, Inc. v. Consolidated Freightways, Inc., 835 F.2d 672, 674 (1st Cir. 1987)] Delivery to a destination stated in the bill of lading is effective delivery, and it is not necessary, unless required by the bill of lading, for the delivery person to obtain a signature acknowledging receipt. [Polygram Group Distribution v. Transus, 990 F. Supp. 1454 (M.D.Ga. 1997)] Unless otherwise agreed, unloading is not normally a part of delivery and is the responsibility of the consignee. There is case law to support discharging a motor carrier from liability when delivery is made to a job site and signed for by an imposter, unknown to the driver as such.

Because of this reoccurring problem, I recommend that carriers modify the pickup and delivery terms in their service conditions. Provide that where trailers are spotted for shippers’ or consignees’ convenience, carrier liability begins when the loaded trailer is actually placed in the carrier’s custody at time of pickup and terminates when the carrier spots the trailer at the consignee’s location for unloading. Prudence dictates, however, that your drivers be instructed to obtain written acknowledgment from the consignor when actual pickup is made and when custody of the trailer is given to the consignee at point of delivery.