Who breaks the seal?

Colorado Motor Carrier Services Division issued emergency rules for issuance of special revocable permits that authorize motor carriers to operate without meeting state port clearance requirements. The rule is designed to address the economic impact of increased fuel use during processing of revocable permit applications. For more information, go to this site.

Five defendants were sentenced in U.S. District Court in Fresno, Calif., for keeping false driver’s logbooks while employed as truck drivers for Nijjar Brothers Trucking of Madera, Calif., according to the Department of Transportation’s Office of the Inspector General. Baljinder Singh, a driver for Nijjar Brothers, had been driving for at least 19 hours when he caused a four-vehicle collision, killing a father and his 13-year-old son and seriously injuring six others, according to DOT-OIG. Singh later was convicted and sentenced for falsifying his logbook entries and served time in jail.

Santos Alamo and Gustavo Soler were sentenced in U.S. District Court in Tampa, Fla., to 21 months imprisonment, followed by two years’ supervised release, for their involvement in a commercial driver’s license fraud scheme, the Department of Transportation’s Office of the Inspector General said. Both men conspired to pay bribes to a Pinellas County Tax Collectors Office employee, whose responsibility was to monitor applicants and ensure their qualifications before issuing CDLs, according to DOT-OIG.

Q We are a small warehouse that received delivery of a sealed container. The driver refused to break the seal and insisted that we do it. I know of no requirement that we break the seals on inbound loads, but the driver insisted it. What difference does it make who breaks the seal?

A The statutes and regulations governing shipper load and count are silent with respect to which party at destination breaks the seal. But I suspect I know why the driver insisted that you be the one to examine the seal and actually break it at destination.

The delivery of a shipper load-and-count shipment with seal intact is an important factor in resolving cargo claims for shortages. If the shipment is loaded by the consignor and unloaded by the consignee, and marked as shipper load and count or with words of similar import, then the carrier is not liable for the shortage or for upset in transit unless the claimant can prove negligence. (See 49 U.S.C. 8011.) Use of seals is not mentioned in the statute, but in practice, seals are attached and recorded at point of origin and are primary evidence that the load has not been tampered with in transit.

I have encountered repeated cases in which a carrier’s driver has been told to break the seal and back into the dock, only to then have the actual receiver refuse to sign for the shipment with seal intact. This is probably the reason the “snake-bitten” driver now insists that all consignees physically break the seal, and I see no reason for you not to have obliged him by doing so. The problem with seal integrity and shipper load-and-count issues are becoming significant in view of the increase in the draconian practice of many shippers to trash full truckloads of foodstuff shipments when any evidence of a security breach in transit is present.

One major foodstuffs shipper now has started handing drivers its own “additional bill of lading terms and conditions,” including a term that reads “Containers or equipment with broken, missing or unreadable seals … at destination … may be rejected, and carrier will be liable as if there had been a total loss of the shipment.” Under traditional rules of commerce and the Carmack Amendment, the consignee is required to accept broken seal loads and to mitigate damages unless the shipment is “practically worthless.”

While the consignee is free to insist on appropriate testing of the portion of a broken seal load that it fears has become contaminated, a carrier should not be held liable for the destruction of perfectly good boxed, skidded or palletized freight that shows no evidence of contamination or malicious tampering. After all, cargo claims are about cargo “loss or damage” in transit. That is why sophisticated carriers rely on the time-honored uniform or standard bill of lading and make sure their drivers sign nonconforming shipping documents as receipts for goods only.

A mixed ruling in Landstar case
A federal appeals court’s ruling in longstanding litigation between the Owner-Operator Independent Drivers Association and Landstar System has left neither side fully satisfied, and each may seek review or clarification of certain aspects of the decision.

Contrary to Landstar’s arguments and a lower court’s ruling, the U.S. Court of Appeals for the Eleventh Circuit said Landstar had not provided the required disclosure of banking fee charges and document charge-back items in its independent contractor leases. The lower court had determined that Landstar must make such disclosures but had further declared that the carrier had complied with the mandate. In addition, the appeals court said the district court incorrectly granted an injunction sealing the pricing information Qualcomm provided to Landstar.

But OOIDA didn’t get what it wanted, either. The appeals court said OOIDA could seek an injunction to prohibit further violations of the disclosure requirements in the federal truth-in-leasing regulations, but it ruled that OOIDA would have to prove actual damages. Moreover, the appeals court upheld the district court’s ruling decertifying the class as to actual damages.

“Landstar is overall very pleased with this decision,” said Michael Kneller, Landstar vice president and general counsel. “The Eleventh Circuit upheld what we believe are the key elements of the District Court’s ruling, which affirmed the validity of Landstar’s current lease.” Kneller said Landstar is evaluating whether to appeal or seek clarification of the additional disclosure information.

OOIDA may ask for the appeals court to rehear the case, said President Jim Johnston. “If the only remedy is an injunction, which basically means the court says ‘hey guys, don’t do that again,’ then there is no deterrent for other carriers to not violate the regs,” Johnston said. “We feel if they didn’t disclose the charges, then they should have to reimburse the owner-operators what they charged them. That would be a deterrent for other carriers.”