Carrier Liability

Carrier liability defines the extent to which a motor carrier is financially responsible when freight in its custody is lost, damaged, or destroyed. In the United States, the foundation is the Carmack Amendment, which establishes that carriers are presumptively liable for loss or damage from the moment they take possession at pickup until delivery is complete. The shipper doesn't need to prove the carrier was negligent – only that the goods were tendered in good condition and arrived damaged or didn't arrive at all.

However, carrier liability has limits. Carriers can defend themselves by proving the loss was caused by an act of God, an act of the shipper (such as improper packaging), a public authority, the inherent nature of the goods, or a public enemy. More practically, many carriers negotiate released value rates into their tariffs or contracts, capping their maximum liability per pound or per shipment. A released value of $0.50 per pound, for example, means a carrier's maximum exposure on a 40,000-pound load is $20,000 – regardless of whether the actual cargo value was $200,000.

Understanding carrier liability is essential for managing financial risk in your supply chain. Shippers who don't review the liability terms in their carrier contracts or tariffs may be unknowingly accepting far less protection than they assume. This is especially critical for high-value or perishable freight where a single loss event can represent a significant financial hit. When carrier liability caps fall short of cargo value, the gap should be addressed through cargo insurance or by negotiating full-value liability terms – usually at a higher freight rate.

On the claims side, carrier liability determines the ceiling of what you can recover through a freight claim. A well-documented claim with a clean bill of lading, notated POD, and itemized damage report gives you the strongest position – but recovery is still bounded by the liability terms in effect for that shipment.