We have to start this month’s Bits and Pieces with a big cheer to Tiana. For those of you who did not hear Tiana got married this month! Mrs. Schowe. We wish her and Ben a wonderful life together!
Short month, short report this month. We report:
BTS STATISTICS – The BTS reports that the Transportation Services Index for freight rose 3% in 2016. That is good news for trucking since 2015 was a down year. The Transportation Statistics Annual Report (TSAR) was released and can be viewed here. Some of the highlights include:
1 – More than 18 billion tons of goods valued at more than $19 trillion were moved in 2015, an increase of 6.5 percent and 8.2 percent from 2012, respectively.
2- Trucks carried more than 60 percent of both the weight and value of 2015 freight.
3 – In 2015, exports and imports made up more than 11 percent of all freight weight and 21.7 percent of the value.
4-Electronics accounted for the highest value, followed by motorized vehicles and mixed freight.
5- NAFTA accounts for nearly 30 percent of international merchandise trade. In 2015, U.S. imports from Canada and Mexico exceeded exports.
6 – Trucks carried 64.3 percent of the NAFTA export/import value and 25.6 percent of the tonnage.
7 – More than 8.3 million “combination trucks” were registered in 2014, up more than 200,000 from the previous year.
8 – Vehicle-miles-traveled by trucks also increased by nearly 1.4 billion miles in 2014.
There is a wealth of data in the report. Give it a glance to see how it impacts your market strategy for the coming years.
CSA ATTACK – A coalition of organizations had requested that the new DOT Chief rescind and delay the proposed carrier safety fitness determination rule which is based on CSA data. The organizations contend that the data is flawed. It requested this delay in light of the study being done by the National Academies of Science, believing that reforms will be coming to the program in the coming year.
REGULATION DELAYED – In light of President Trump’s mandate to delay implementation of proposed rules which were not already effective, the FMCSA postponed the effective date of the entry level driving training rule. It is now delayed until March 21st but will not be enforced for 3 years after its effective date.
BRIDGE REPORT – The ARTBA issued its report on deficient bridges. 1,900 bridges on the interstate shipment are deficient, with an average age of 67 years. A bridge is classified as structurally deficient and in need of repair if its overall rating is four or below. 41% of the bridges have not had major reconstruction work. You can view the report here.
This was a unique and interesting issue. The Fifth Circuit held that a trucker’s claim against a tank wash service was preempted by the Carmack Amendment. The Court concluded that the service of washing the truck, which was done incorrectly and resulted in a cargo loss, was an integral part of the transportation and was related to the interstate transportation. (Heniff Transportation System v. Trimac Transportation Services, Inc., 2017 WL 405626)
The Eastern District in California denied a motion to transfer venue to the forum selected in a broker carrier agreement. The Court rejected the request concluding that the underlying policy of the Carmack Amendment, which provides its own venue options, permitted the action to stay in the pending forum. (Celtic International, LLC v JB Hunt Transport, 2017 WK 696017)
There is a new tariff provision which may impact subrogation recovery for a cargo loss. In a related case to the above decision, the Eastern District held that the plaintiff could not pursue the rail carrier who damaged 3 shipments of wine in a derailment. The rail carrier was hired by JB Hunt (defendant in the case above) to perform the rail transport. Under the terms of the rail carrier’s tariff only the party that engaged and paid the rail carrier was permitted to sue the rail carrier for damage. The Court held that such a provision was not barred by the Carmack Amendment and granted judgment to the rail carrier. (Celtic International, LLC v. BNSF Railway Co., 2017 WL 714379)
The Northern District of Texas allowed a plaintiff to amend its complaint to more properly allege its standing to sue a motor carrier for loss or damage to cargo. At least one of the motor carriers was dismissed when the plaintiff could not support any factual basis for a claim against that carrier. (Miramore Trust v. United Van Lines, 2017 WL661374)
When does transit end and carrier liability change to warehouseman liability? That was the issue addressed in the Southern District in Florida. The shipment was stolen while at the motor carrier’s warehouse. The Court held that the bill of lading indicated that transit was not yet completed and the facts of the loss confirmed that the shipper fully intended the shipment to be held only until such time as the motor carrier could obtain a delivery appointment. The Court dismissed the action, which alleged only state law causes of action against the carrier, concluding that the claims were subject to the preemptive effect of the Carmack Amendment. (Starboard Holdings, LTD v. ABF Freight Systems, 2017 WL 696124)
Figuring out who the correct insurer is can be critically important as one motor carrier found out in the Central District of California. The motor carrier sought to proceed on a bad faith claim under a cargo policy, alleging that the insurer did not do an adequate investigation on whether there was forced entry. However the motor carrier did not sue the issuing company and was denied a right to amend to add the correct party. The parent was not liable on the policy of insurance. (Freedom Transport v. Travelers Companies, 2017 US DIST Lexis 18744)
The District Court in Maryland reconsidered a prior decision exonerating an insurer from liability under the MCS-90 endorsement. The Court held that when determining the applicability of the endorsement the Court should examine the essential character of the shipment from the shipper’s intent at the time of the accident in order to determine whether the shipment was interstate in commerce. In that case, as the shipper asked the motor carrier to travel from its home location in one state to a location in a different state to transport an intra-state shipment, the MCS-90 endorsement applied. (Titan Indemnity v. Gaitan Enterprises, Inc. , 2017 WL 660802)
Unloading material from a trailer is an activity encompassed by the unloading exclusion in a general liability policy. The fact that the trailer may have been defective did not give rise to a separate claim. The 1st Department in New York held against the auto liability carrier who sought contribution under the general liability insurer for a settlement it reached on behalf of the insured. (Country-Wide Ins. C. v. Excelsior Ins. Co., 2017 WL 439730)
The Middle District of Pennsylvania held that a repair facility could be subject to punitive damages when it failed to undertake the proper steps to repair a trailer and train its employees, sending the driver off in a trailer which caught fire. Unfortunately, the driver died trying to put the fire out. The Court held the facts sufficiently egregious to warrant possible punitive damages. (Wilson v. TA operating LLC, 2017 U.S. Dist. LEXIS 18754)
A request for remand was denied to a plaintiff in the Eastern District of Louisiana. The Court held that the defendant was not obligated to remove the case until it received sufficient paper work which supported damages in excess of the jurisdictional requirement. The complaint did not allege a specific sum of damages. The fact that the defendant received paperwork before the suit which indicated excessive damages was insufficient as the statute requires receipt of paperwork after the initial suit is filed. (Wright v. National Interstate Insurance Co., 2017 U.S. Dist. LEXIS 9529)
When does the law of the case apply? The Court of Appeals in Louisiana held that it did not apply to an interlocutory ruling by the Trial Court since they may always change the substance of its ruling. Having made that finding the Court of Appeals went on to support the decision of the Trial Court that the driver was not acting in the business of the motor carrier at the time of the accident, which triggered coverage under the bobtail coverage for the driver. The Court held that while there was presumption that a leased vehicle was in the business of a motor carrier such a presumption applies only when the claim is for an injured party, and not for UM coverage under the policy. (Guidry v. USA Agencies Casualty Ins. Co., 2017 WL 658735)