Server: Netscape-Enterprise/2.01 Date: Wed, 31 Dec 1997 20:57:04 GMT Content-type: text/html Notice of Loss and Damage Claims in Domestic Air Transport Notice of Loss and Damage Claims in Domestic Air Transport By Charles Veigel, Esq. And Michael McDaniel, Esq. For the Cargo Letter

Seattle, Jan. 3rd. As we learned in our last article, "Written Notice of Loss and Damage Claims in Ocean Transport," [please visit the Cargo Letter on the World Wide Web at Edition 303] pointed out that only written notice of loss (not actual claim) is required by law under ocean rules of the Carriage of Goods by Sea Act (Title 46 U.S. Code). In domestic air cargo transport, however, there is no legal requirement for written notice of claims for loss and damage. Nevertheless, domestic air cargo carriers generally follow rules which dictate the WRITTEN notice of claim requirements.

U.S. Domestic Airline Deregulation
Prior to airline deregulation, the Civil Aeronautics Board (CAB) reviewed filed tariffs of direct air cargo carriers. Shipper was deemed to have constructive notice of the contents of the tariff, as well as the notice of claim rules for loss and damage. CAB had indicated that most airlines required claims for loss and damage to be filed within 9 months and 9 days from the date of shipment.

The Airline Deregulation Act of 1978 (Pub.L. No. 95-504, 92 Stat. 1705) brought a phased end to the CAB in 1985 as well as the notice of claims rules. Consequently, direct air carriers & indirect air carriers (air forwarders) have been free to mandate rules for loss and damage claims, which often differ from carrier to carrier. Because each carrier may have different rules for air cargo claims, the claimant/transportation practitioner must be familiar with the performing air carrier.

U.S. Domestic Air Cargo Damage Limit
This is usually US $.50 per pound unless the shipper declares the cargoís value and pays a higher shipping rate.

The Sources of Domestic Air Carrier's Claim Rules
To locate the claimants cargo carrier's rule for loss and damage claims, the claimant should look to three sources:

1. air way bill of lading;
2. air service guides;
3. air cargo tariff (procedural manual).

The air way bill of lading (AWB) is usually issued to the shipper; however, the service guides and tariffs should be requested directly from the direct/indirect air carrier. They often contain valuable information not set forth on the air way bill. (Several domestic air carriers have now posted their claim rules on the world wide web.)

These same rules apply for the house air waybill (HAWB) of the indirect air carrier, i.e. the airfreight forwarder/air forwarder. Remember, to the actual carrier air carrier, the indirect air carrier (airfreight forwarder) is the shipper and receives its AWB when cargo is tendered. The actual shipper receives the HAWB of the indirect air carrier/air forwarder. When an HAWB has been issued by the air forwarder, the direct carrierís bill becomes known as an MAWB, or master air way bill.

Filing Written notice of claims for Domestic air cargo loss and damage.
Although this article cannot begin to outline the various rules each domestic air carrier prescribes for cargo loss and damage claims, you can certainly benefit by exercising the following guidelines:

1. WRITTEN NOTICE. All notices of claims and its supporting documentation must be WRITTEN. Any WRITTEN notice of claim should be sent by either certified or registered mail, return receipt requested or via courier to the carrier. Notice given to an air carrier by telefax was upheld in a recent case, see Royal Ins. Co. v. Emery Air Freight Corp., 834 F.Supp. 633,635 (S.D.N.Y. 1993). If by telefax keep the confirmation sheet from your machine.

2. CONTENTS OF WRITTEN NOTICE OF CLAIM. There are no statutory requirements for written notices of claims. Nevertheless, a claimantís notice should include: (1) the name of shipper; (2) the name of consignee; (3) AWB or HAWB number; (4) the flight number and name of carrier; (5) the date shipment was delivered to the air carrier; (6) the place where the shipment was delivered; (7) the port of loading (airport); (8) the destination port (airport); (9) the description of goods; (10) a description of the goods lost or damaged, consisting of a brief statement of loss and damage as well as its value, if known.

3. CONTENTS OF CLAIM. Following written notice of claim to the carrier, a formal written claim with supporting documentation must be provided. Certainly the notice and claim can be combined. The domestic air carrier (or indirect air carrier/FF) will require verifiable documentation supporting the claim, such as a survey/inspection, commercial invoices, etc. Please visit the Cargo Letter on the World Wide Web at Edition 301 and 303 where we outline documentation necessary to support a cargo claim.

4. TIME LIMITS. The domestic air carrier will require the claimant to provide a WRITTEN notice of claim and a formal WRITTEN claim with supporting documentation within a time period mandated by the AWB/HAWB, etc.. For example, for domestic moves, Federal Express requires claimants to submit a WRITTEN notice of claim within 15 days from the delivery in the case of cargo damage, delay or shortage. Federal Express also requires the claimant to submit verifiable documentation supporting a written claim of loss and damage within 90 days after written notice of the claim was received, differing significantly from the old notification period once indicated by CAB before deregulation. Today, if a claimant misses the deadline for filing loss and damage claims in domestic air carrier moves, the carrier may move under contractual provisions of its AWB (or HAWB of the indirect air carrier/air forwarder) to deny the claim.

WRITTEN NOTICE TO CARGO INSURANCE UNDERWRITER. If the shipment was covered by air cargo insurance, you must notify the cargo insurance underwriter of the claim IMMEDIATELY. If you are to recover under the subject policy of insurance, the underwriter requires that YOU take ALL required steps to preserve claim against the carrier/indirect carrier. In order to protect its rights of subrogation.

Following deregulation many shippers became disgruntled, arguing that the shorter time limits were overly burdensome and one-sided. Since deregulation, shippers have to argue in court that rules for cargo loss & damage were either unconscionable and contrary to public policy under federal common law. These efforts are largely in vain. Still do not forget that the domestic air carrier's rules are not statutorily prescribed and therefore may be subject to negotiation. Larger volume shippers often negotiate with domestic air carrierís to obtain more favorable claim notice periods and other concessions. The SAFEST COURSE: Purchase quality air cargo insurance from you air forwarder professional and avoid uncertainty.

Next time ... international air cargo claims -- The Warsaw Convention

[Michael McDaniel, Esq. practices transportation law at the Law Offices of Countryman & McDaniel, Los Angeles, California.]

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