Claim: Damaged Gas Main
Freight Forwarder
A domestic freight forwarder was asked by its customer to arrange for transportation of a full container load across the state of New Jersey. The forwarder made the necessary arrangements with a known, licensed and reputable drayage company. The carrier then dispatched its driver, picked up the container and the shipment went on its way.
During transit, the driver hit a bridge and damaged a gas main owned by a local utility company. The carrier and its driver failed to pay the utility company for the damages; therefore, they filed suit against the trucking company, the driver AND against the forwarder. According to the utility company, the forwarder should have told the driver that the full container he had hooked to his tractor trailer was allegedly "out of gauge" (non-standard dimensions).
Status:The suit was filed last August and as of February 17, 2012 no settlement has been reached. The trucking company is refusing to pay anything more than half of the damages and Roanoke is still defending the forwarder under their E&O policy.
The utility company appears to have unlimited resources to pursue this suit, mediation efforts failed...and we are now going to trial. The forwarder has an E&O policy with a $0 deductible (First Dollar Defense) so they have no out-of-pocket expenses to date. |
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This case is unusual in that the claiming party is unrelated to the shipping transaction. However, the following practices should be considered to minimize exposure in similar situations:
- Truckers should read the bill of lading and visually inspect the freight prior to the move. However, the forwarder may wish to confirm details regarding over size and out of gauge loads to the trucker in a separate communication.
- While it may not have helped in this particular instance since the claiming company was not a party to the shipment, the role of the forwarder should be clearly defined on any documents related to the transaction. Specifically, it should be noted that the forwarder is NOT acting as a carrier. Forwarders may consider becoming licensed property brokers in order to better define their role and limitations of liability in such transactions.
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Without the necessary protection, even an obscure 3rd party claim could have a devastating effect on your business. |
