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February
2006
FAILURE TO SPECIFY THE
PROPER RELEASE VALUATIONS IF PROVIDED FOR IN THE
TARIFF OR CLASSIFICATION DESCRIPTION
While articles of extraordinary value are prohibited
for shipment via motor carrier, there are many
articles that have differing ratings related to the
amount of value declared for the product on the bill
of lading. Item 99400 of the National Motor Freight
Classification, lists a value of less than $1.50/lb
@ class 100, a released value of $1.50 but less than
$5.00 is classified at class 250, and value in
excess of $5.00 but less than $7.50 at class 300. If
the shipper fails to execute the released valuation,
charges will be assessed on the basis of the class
for the highest value, or on the basis of class 300
in place of a possible class 100 or 250! Proof of
the actual value must be provided before an
adjustment will be made. This is as opposed to a
simple value declaration on the original bill of
lading. This is only an example of a product with
this potential for excess costs. There are of
products subject to a released valuation class
rating in the classification. These sorts of
restrictions can also appear in carrier rate
tariffs, rules tariffs, or specifically included in
contracts.
Small package shipment carriers like UPS and Fed all
have a value restriction and offer to provide at an
additional cost whatever additional insurance you
may wish in order to cover excess valuation
liability. Are you sure, your product isn’t in one
of these categories? It is critically important to
know for sure and to take appropriate action to
protect your products the very best possible
protection. You can even establish that you do not
wish to pay for excess insurance coverage to a
carrier, go to an Independent Insurance Company such
as a Parcel Insurance Provider or establish an
internal self insurance coverage which is usually
less than the insurance offerings by most carriers.
Finally, carriers are not liable for consequential
damages unless negotiated and in a special contract
or reference in the quoted rates. Consequential
losses are such costs as shutting down a production
line or missing a sales promotion. The logistics
group should have primary responsibility of assuring
the proper execution of a bill of lading to insure
against unknown magnitude of losses in the event of
a catastrophic failure on the part of the carriers.
A recent tunnel explosion in an important connector
sector of a rail carrier in Baltimore has resulted
in catastrophic losses including the cancellation of
several scheduled major league baseball games, an
inconvenience to motorists and incalculable costs to
repair the physical damage. It would be soothing to
know that if you had a product that was involved in
any way in that situation that your liability is
covered by appropriate level of insurance
protection. Of course there are others in the
corporation who would have a keen interest in the
manner of handling this contingency but the
“Logistics Team B” would be the candidate for a
joint knowledge of the effort to properly protect
your products while in transit or at rest in a
distribution center.
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