The global supply chain crisis, paired with the continuing challenges of the pandemic, means motor carriers, cargo brokers, freight forwarders, and shippers are experiencing a significant increase in claims related to delay and cargo damage as well as a slowdown in the payment of freight charges, yet the demands for payment have generally increased.

In the current environment, force majeure clauses have taken on increased importance because they can help transportation providers protect themselves from claims when circumstances beyond their control preclude performance or delay performance. The traditional force majeure defenses of an “act of God” and “act of government” may not be enough to mitigate the unforeseen consequences of the supply chain logjam or COVID-related delivery rejections and losses, so tailored contract provisions may be needed to provide the appropriate protections. Transportation providers should be aware that market shifts and increased operating costs generally do not protect against non-performance. Likewise, the proper documentation is a prerequisite to asserting certain defenses to cargo claims, such as time limitations and limitations of liability, and for recouping the cost of collecting freight charges.

With COVID-related financial difficulties on the rise, transportation providers should endeavor to quickly identify those shippers or intermediaries that may be prone to a bankruptcy or company shutdown. Further, providers should be careful to minimize their losses when customers are unable to pay and reduce their (and their customers’) potential exposure to collection claims for charges not paid by the responsible intermediaries by promptly pursing payment and recovery.

The Firm’s Cargo Claim & Freight Charge group, led by Kathleen Jeffries, Thomas Gonzalez, Christopher McNatt, Andrew Marquis, Nathaniel Saylor, and Michael Tauscher, regularly assists clients with addressing cargo claim and freight charge issues. Equally important, the team can help mitigate exposure before issues arise.