On today's episode on Veritas Vantage, Supply Chain Leader Brian Hastings sits down with Transportation Attorney Rob Hassman from Burns and Hassman as they discuss some crucial advice on how brokers can avoid common mistakes and handle various legal scenarios. From understanding the importance of documentation and the role of the cargo owner to mitigating losses and resolving claims efficiently, Rob covers everything you need to know to navigate the complexities of cargo claims.

Let's dive into today's episode! 

The Logistics & Leadership Podcast, powered by Veritas Logistics, redefines logistics and personal growth. Hosted by industry veterans and supply chain leaders Brian Hastings and Justin Maines, it shares their journey from humble beginnings to a $50 million company. Discover invaluable lessons in logistics, mental toughness, and embracing the entrepreneurial spirit. The show delves into personal and professional development, routine, and the power of betting on oneself. From inspiring stories to practical insights, this podcast is a must for aspiring entrepreneurs, logistics professionals, and anyone seeking to push limits and achieve success.

Timestamps:

(01:22) - Common Mistakes in Cargo Claims

(05:25) - Proving Cargo Claims: Key Elements

(07:03) - Driver Responsibilities and Legal Implications

(14:52) - Mitigating Losses and Salvaging Goods

(26:40) - Understanding Freight Fees and Legal Duties

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Watch the pod on: YouTube

Brian: 00:00:00

Have you ever signed off on a contract with a client and you didn't read it or have you ever had a legal issue and you really didn't know which way to turn?

Brian: 00:00:18

Today we're sitting here with transportation attorney Rob Hasman from Burns and Hasman, and we're going to go over several different scenarios within the legal realm where brokers make the biggest mistakes and sometimes they don't really know where to turn to or how to handle that.

Brian: 00:00:37

So, Rob, thanks for coming on the show today.

Brian: 00:00:39

Really appreciate it, man.

Rob Hasman: 00:00:41

Thanks, Brian.

Rob Hasman: 00:00:41

Thanks for having me.

Rob Hasman: 00:00:42

Really appreciate it.

Rob Hasman: 00:00:43

And I'm glad to be here.

Brian: 00:00:44

Thank you.

Brian: 00:00:45

Yeah, I think, you know, this is kind of a.

Brian: 00:00:47

We were just talking about this off camera a few minutes ago, but I think there are so many things from the legal side of it where, you know, brokers and shippers, they, they just don't know.

Brian: 00:00:58

Right.

Brian: 00:00:58

And I think there's so many different use cases where if you run into a legal situation or you have a challenge with a cargo claim, you know, what do you do?

Brian: 00:01:10

And so, you know, with that, like, I want to ask you a couple questions around cargo claims and what to look for, how to combat those, if it happens already, then what to do in the back end.

Brian: 00:01:22

So, sure.

Brian: 00:01:23

Cargo claims, man, those are, those are always, you know, high stress.

Brian: 00:01:27

Those are, you know, everybody's pointing fingers at everybody.

Brian: 00:01:31

What are some of the mistakes that brokers make on cargo claims that you would, you know, likely address?

Rob Hasman: 00:01:38

Well, first of all, backing up a minute to the point you made a while ago, it's, you know, I've been practicing in the transportation arena for a long time and I have, you know, many different broker, shipper, transportation clients and it's almost universal, with the exception of some major, majorly large clients that, you know, people new to this industry just, they just don't have really the training or really any knowledge or quite honestly, any, any real grasp of any of the legal issues that, you know, brokers are facing.

Rob Hasman: 00:02:18

Yeah, most people that I represent have worked, you know, at a TQL or something like that and broken off onto their own.

Speaker C: 00:02:25

Yeah.

Rob Hasman: 00:02:26

And, you know, they just go by these policies that they, they thought that were the law but basically were put in place by a former employee or something like that.

Rob Hasman: 00:02:37

And, you know, a lot of times they're not compliant whatsoever when it comes to cargo claims.

Rob Hasman: 00:02:44

I would say, you know, the biggest, the biggest thing is as soon as you find out that there is going to be a claim, whether it's damage, delay, you know, temp issue an accident first and foremost, you know, you need to find out the total extent of what's happened and then you need to be in touch with the cargo owner regarding, you know, all of the issues of what has happened and obtain their specific instructions immediately.

Rob Hasman: 00:03:16

In terms of, you know, how do they want it salvaged if they don't want it salvaged?

Rob Hasman: 00:03:22

You know, do they want it disposed of?

Rob Hasman: 00:03:24

If they want it disposed of, how do they, you know, how do they want that to go?

Rob Hasman: 00:03:27

Do they need a destruction receipt or whatnot?

Brian: 00:03:30

When you say, real quick, when you say cargo owner, what do you mean?

Rob Hasman: 00:03:33

Well, you know, your shipper is not necessarily always the owner.

Speaker C: 00:03:36

Right.

Rob Hasman: 00:03:36

You might have Joe's, Joe's Crab, you know, farm in Alaska that has a truck or, you know, a shipload of.

Rob Hasman: 00:03:47

Of crab.

Speaker C: 00:03:48

Yeah.

Rob Hasman: 00:03:48

But they don't move things, so they might put it in, you know, Acme Storage, cold storage, and Acme Cold Storage is shipping it.

Rob Hasman: 00:03:57

But Acme Cold Storage doesn't own the cargo.

Rob Hasman: 00:03:59

They don't really have any rights to determine what's going to happen with it.

Rob Hasman: 00:04:03

So you need to get with whoever it is that has the authority or the ownership of the actual commodity to determine what they want to have happen.

Rob Hasman: 00:04:12

The first and foremost goal should always be to minimize losses for everyone involved.

Speaker C: 00:04:18

Yeah.

Rob Hasman: 00:04:18

So to the extent that anything is still in good and perfect condition, you know, you might have an accident where one pallets damaged.

Speaker C: 00:04:25

Right.

Brian: 00:04:26

You see that often.

Rob Hasman: 00:04:27

Right.

Rob Hasman: 00:04:28

And oftentimes, you know, shippers or want, or customers will want to reject the whole load when that's not really the way that a claim should go.

Rob Hasman: 00:04:36

But your goal should always be to find a way to make the losses the least they possibly can be for everyone.

Brian: 00:04:43

Try to mitigate the risk or mitigate the loss as much as humanly possible.

Brian: 00:04:47

Now with that, like, if I'm a, if I'm a broker and I'm listening to this show and I've had a couple cargo claims recently and I'm saying shit, Okay.

Brian: 00:04:55

I need to come up with some processes, right, to figure this out.

Brian: 00:04:58

Is it do in a court of law?

Brian: 00:05:01

Is it pictures?

Brian: 00:05:02

Is it documentation?

Brian: 00:05:03

Is it a rejection stamp on the bill of lading?

Brian: 00:05:07

What's kind of the final truth?

Rob Hasman: 00:05:10

I guess that kind of runs the game.

Rob Hasman: 00:05:13

Okay, so there's some nerdy lawyer book, technical.

Brian: 00:05:21

Are we going to read it?

Brian: 00:05:22

Are we going to read it from top to bottom?

Rob Hasman: 00:05:24

I can actually see it out here in real time.

Rob Hasman: 00:05:27

But you know, to prove a cargo claim, you need to prove three things.

Brian: 00:05:30

Okay.

Rob Hasman: 00:05:30

What's that tendered to the, to the motor carrier in good and acceptable condition.

Brian: 00:05:35

Okay.

Rob Hasman: 00:05:35

Delivered with, in damaged condition or, you know, less than full or, you know, out of temperature shortage or something.

Rob Hasman: 00:05:42

And then you need to be able to quantify the extent of your losses.

Rob Hasman: 00:05:47

Now, how you meet all three of those elements can be hundreds of ways.

Brian: 00:05:52

Sure.

Rob Hasman: 00:05:53

But once you meet all three of those elements, it creates a rebuttable presumption that the carrier.

Rob Hasman: 00:05:59

It's almost strict liability.

Speaker C: 00:06:01

Yeah.

Rob Hasman: 00:06:01

You know, when somebody gets in a car accident.

Speaker C: 00:06:03

Yeah.

Rob Hasman: 00:06:04

If they want to recover from the other side, they have to show that the other shot side caused the accident.

Rob Hasman: 00:06:09

Right.

Rob Hasman: 00:06:09

Well, in a cargo claim, when you produce your three elements of the claim, you don't have to prove what the carrier did or that the carrier was negligent or that the carrier, quite frankly, did anything wrong.

Speaker C: 00:06:21

Right.

Rob Hasman: 00:06:21

It's the opposite.

Rob Hasman: 00:06:22

The carrier, if they don't want to pay the claim, has to affirmatively prove that they did not cause it.

Rob Hasman: 00:06:28

We don't have to show.

Rob Hasman: 00:06:29

All we have to show is it was given to you in good condition, it arrived damaged, and the value of our, of our loss.

Brian: 00:06:35

With that, I'm going to back.

Brian: 00:06:36

So number one, good and acceptable condition on loading.

Brian: 00:06:39

What if we run into a situation where, you know, you hear it all the time, drivers not allowed on the dock.

Brian: 00:06:45

So, so what do you do then?

Rob Hasman: 00:06:47

So the first way and easiest way, and this comes from the US Supreme Court on down.

Speaker C: 00:06:53

Yeah.

Rob Hasman: 00:06:53

A carrier signing a bill of lading without noting damages at loading creates a presumption that the commodity was in good and acceptable condition at loading.

Rob Hasman: 00:07:03

However, if the trailer was loaded and sealed before the load is given to the motor carrier, you cannot rely on the bill of lading that creates what's called shipper load count.

Speaker C: 00:07:14

Okay.

Rob Hasman: 00:07:15

If that happens, in order to get over element one, the motor care.

Rob Hasman: 00:07:19

I'm sorry, the shipper has to affirmatively prove the condition that the goods were in.

Rob Hasman: 00:07:25

Now, if the, if the trailer's open or quite frankly, they hand them the seal and say, hey, look at it if you want, and they just slap the seal on it and just fail to look at it.

Rob Hasman: 00:07:33

That's their fault.

Speaker C: 00:07:34

Yeah.

Brian: 00:07:34

So there is responsibility on the driver's side to make sure that this product being loaded on that trailer is in good condition.

Speaker C: 00:07:42

Correct.

Brian: 00:07:42

So it's driver responsibility whether that's getting on a dock or they hand him the bill and the seal that he gets in there, he looks at it.

Brian: 00:07:49

Okay, it looks good.

Brian: 00:07:50

Airbags are good.

Brian: 00:07:50

Load locks are all Set.

Brian: 00:07:52

We're signing off on this.

Rob Hasman: 00:07:54

Correct.

Brian: 00:07:54

Is that right?

Rob Hasman: 00:07:55

That's correct.

Speaker C: 00:07:55

Okay.

Rob Hasman: 00:07:55

And quite frankly, I do hear it all the time.

Rob Hasman: 00:07:58

Why wasn't allowed on the dump?

Brian: 00:07:59

Always a lot of finger pointing.

Rob Hasman: 00:08:01

Right.

Rob Hasman: 00:08:01

Yeah, I get it.

Rob Hasman: 00:08:02

In the real world, you know, you might show up to Walmart and they say you can't come on the dock.

Rob Hasman: 00:08:07

But the technically, the motor carrier has the right legally to say, I'm not taking this, then sure, let me in that trailer.

Rob Hasman: 00:08:14

I have a duty to make sure it was loaded in good condition.

Rob Hasman: 00:08:18

Additionally, you know, you'll hear all the time, you'll see a load of widgets show up and they'll be strewn all over the trailer and they'll say, well, the shipper loaded this incorrectly or it was improperly braced or improperly palletized.

Speaker C: 00:08:33

Yeah.

Rob Hasman: 00:08:34

There is law all across the board that says shipper instructions or shipper loading or whatnot.

Rob Hasman: 00:08:40

Unless you sign something that says motor carrier has no responsibility for loading and securing.

Rob Hasman: 00:08:46

If the load was, if the cargo was loaded and secured by someone else, the motor carrier still has the duty.

Speaker C: 00:08:52

Yeah.

Rob Hasman: 00:08:52

From the time they take possession of the time they the deliver it to make sure that it doesn't, you know, that it was loaded correctly, that it was braced correctly.

Rob Hasman: 00:09:00

So just because someone else put it on their trailer and didn't brace it.

Rob Hasman: 00:09:04

Right.

Rob Hasman: 00:09:04

That's not a defense to the carrier.

Speaker C: 00:09:05

Yeah.

Brian: 00:09:06

And I even think, like you said it just a few minutes ago, but I think like even with the driver being responsible and you know, that might come over in a shipper broker agreement or a shipper carrier agreement, which is something we'll talk about here in a few minutes.

Brian: 00:09:21

But I think that's huge where you know, the expectations going in and you know, how they can load it or what the parameters are.

Rob Hasman: 00:09:29

Right.

Brian: 00:09:29

Which you know, we see it all the time.

Brian: 00:09:30

Shriver checks in, he never looks at the load.

Brian: 00:09:34

They might not put.

Brian: 00:09:35

The shipper might be at fault.

Speaker C: 00:09:37

Right.

Brian: 00:09:37

Where you know, when it gets to the receiver and stuff's, you know, for some reason I always think of this, I always think of like watermelons.

Speaker C: 00:09:44

Right.

Brian: 00:09:44

I've had numerous watermelon rejections where they're just all over the place.

Rob Hasman: 00:09:48

Sure.

Brian: 00:09:48

And you know, heavier products or what have you.

Brian: 00:09:52

And you know, 99% of the time the drivers.

Brian: 00:09:55

Oh well, they didn't load it.

Brian: 00:09:56

Right.

Brian: 00:09:57

So even with, you know, watermelons being thrown all across the, you know, the floor of the trailer, we always encourage our drivers to take pictures.

Rob Hasman: 00:10:05

Sure.

Brian: 00:10:05

So it didn't mean to get you off track there, but go ahead.

Rob Hasman: 00:10:08

Well, I mean, if you stick with just the original premise that all you have to do is prove your three elements of the cargo claim.

Speaker C: 00:10:16

Yep.

Rob Hasman: 00:10:17

You know, if you just always keep that in mind.

Rob Hasman: 00:10:21

Unless the trailer was loaded, shut and sealed before the carrier ever showed up and didn't, and the carrier was absolutely prohibited whatsoever from getting in that trailer, if they pick it up, they didn't look at it, they didn't put more braces on it, they didn't make sure that it was stacked correctly.

Rob Hasman: 00:10:41

That's on them.

Brian: 00:10:42

Sure.

Rob Hasman: 00:10:43

Again, unless they sign something specifically in the bill of lading or some other shipping document where the shipper or loader agrees, the carrier has no responsibility for that.

Rob Hasman: 00:10:52

It's their duty.

Rob Hasman: 00:10:53

I mean, they're the ones being hired to take it from A to B.

Rob Hasman: 00:10:56

And if it's not on their trailer.

Rob Hasman: 00:10:58

Right.

Rob Hasman: 00:10:58

Yeah, that's on them.

Rob Hasman: 00:11:00

So you can get over that hurdle by either, you know, if you have a trailer that they were able to get in, if they signed the bill of lading and didn't note any damages, you're over hurdle one.

Rob Hasman: 00:11:11

If the trailer.

Rob Hasman: 00:11:11

And there's a lot more scenarios, but I'm just going to deal with the two.

Rob Hasman: 00:11:14

Love it.

Speaker C: 00:11:15

Love it too.

Rob Hasman: 00:11:15

Most normal.

Speaker C: 00:11:16

Yeah.

Rob Hasman: 00:11:17

If you have a trailer that was sealed and loaded prior to the carrier getting there, your shipper or loader is going to need to overcome hurdle one.

Brian: 00:11:27

Sure.

Rob Hasman: 00:11:27

So hopefully they've taken pictures or they have a loading report or something to show.

Speaker C: 00:11:31

Yeah.

Rob Hasman: 00:11:31

All this.

Rob Hasman: 00:11:32

And if it's food, that it was pulping at the right temperature camera when it went on the trailer, this is how it was.

Rob Hasman: 00:11:38

And then you can get over hurdle one.

Speaker C: 00:11:39

Yep.

Rob Hasman: 00:11:40

Hurdle two is usually pretty easy.

Speaker C: 00:11:42

Okay.

Rob Hasman: 00:11:43

There's hundreds of ways to per.

Rob Hasman: 00:11:44

To prove element 02.

Speaker C: 00:12:01

Yep.

Rob Hasman: 00:12:01

Notation of damage on bill of lading.

Brian: 00:12:04

It's pretty important.

Brian: 00:12:05

Right.

Rob Hasman: 00:12:05

It would be the best way.

Rob Hasman: 00:12:07

And I hear all the time from insurance companies and motor carriers, I have a clean bill.

Rob Hasman: 00:12:11

Yeah, well, a clean bill isn't the be all end all.

Rob Hasman: 00:12:15

If I take photos at the very second you arrive, that's the same thing.

Speaker C: 00:12:19

Yeah.

Rob Hasman: 00:12:20

If I have a USDA inspection before you leave, that's the same thing.

Brian: 00:12:23

Right.

Rob Hasman: 00:12:24

Quite honestly, if I can prove 10 days later that there is damage and I can also prove that that damage existed when you got there.

Speaker C: 00:12:31

Right.

Rob Hasman: 00:12:32

I don't care if your bill of lading was signed clean.

Rob Hasman: 00:12:36

The easiest way, though is to have right on your bill of lading.

Rob Hasman: 00:12:40

Look, it was damaged.

Brian: 00:12:40

Yeah.

Brian: 00:12:41

I think I've dealt with you on this scenario a couple times where driver picks up, or driver is supposed to pick up on Monday, deliver to Nashville on Wednesday.

Brian: 00:12:51

Well, he picks up on Monday.

Brian: 00:12:52

His truck breaks down Tuesday.

Brian: 00:12:54

He doesn't deliver that load until it's supposed to be due.

Brian: 00:12:57

It's fresh goods.

Brian: 00:12:57

It's 34 degrees.

Brian: 00:12:59

His original delivery date's Wednesday.

Brian: 00:13:01

Now, he's not gonna be able to make it there till Saturday.

Brian: 00:13:04

Right now the customer says, well, you know what?

Brian: 00:13:07

We're just gonna claim this product.

Brian: 00:13:08

It's not good anymore.

Brian: 00:13:09

It's three days late.

Brian: 00:13:11

Technically, they can't do that.

Brian: 00:13:12

Is that.

Brian: 00:13:13

Is that accurate or.

Rob Hasman: 00:13:15

So the standard is delivered within reasonable dispatch, and that's a moving target.

Speaker C: 00:13:20

Yeah, yeah.

Rob Hasman: 00:13:21

You know, that can.

Rob Hasman: 00:13:21

You know, a load of metal moving from Arkansas to California might be reasonable dispatch, given the weather conditions a month.

Rob Hasman: 00:13:29

I don't know, a load of, you know, watermelons.

Rob Hasman: 00:13:34

Watermelons might need to go from Ohio to Indiana in a matter of hours.

Rob Hasman: 00:13:38

It's a moving target.

Brian: 00:13:39

Okay, okay.

Rob Hasman: 00:13:39

But to your point, unless there is a guaranteed delivery date in some shipping document, which a lot of times we don't see, and this goes to all claims, by the way.

Speaker C: 00:13:53

Yeah.

Rob Hasman: 00:13:53

A customer doesn't just arbitrarily have the right to decide I'm claiming something.

Speaker C: 00:13:57

Right.

Rob Hasman: 00:13:58

As I said, element two is proving damage.

Rob Hasman: 00:14:01

So recently I had a load of, let's just call them widgets, where one pallet of 15 pallets was damaged and they showed pictures of that.

Rob Hasman: 00:14:12

There was 14 pallets that looked perfect.

Rob Hasman: 00:14:15

And quite frankly, the widgets within the boxes were perfect.

Rob Hasman: 00:14:19

They tried to claim the whole load and they rejected the whole load.

Rob Hasman: 00:14:23

Not only can a customer technically not make a claim for something they can't prove is damaged by law, they're technically, quite honestly, supposed to and required to accept anything that is undamaged.

Rob Hasman: 00:14:34

So they can't just arbitrarily say that, I'm not accepting this.

Rob Hasman: 00:14:38

So if something's going to be late or if it's potentially a food quality issue, you're going to want to get an inspection before the driver leaves, before the customer, you know, decides it's going.

Brian: 00:14:49

To make a claim inspection from usda.

Speaker C: 00:14:52

Correct.

Rob Hasman: 00:14:52

That would be great.

Rob Hasman: 00:14:53

On food, it can be anyone.

Rob Hasman: 00:14:54

It can be local health department.

Brian: 00:14:56

Okay.

Brian: 00:14:56

So local health department, usda.

Brian: 00:14:59

A lot of major cities, a lot of major produce markets have those literally on site.

Rob Hasman: 00:15:03

You're gonna have them almost within 60 miles of anywhere in the country.

Speaker C: 00:15:07

Right.

Brian: 00:15:07

So you would rather pay the 3, $400 to get the report done, pay for that, whatever that is.

Brian: 00:15:14

Out of pocket versus paying for a $40,000 load of watermelons.

Rob Hasman: 00:15:18

Correct.

Rob Hasman: 00:15:19

Because it does a few things.

Rob Hasman: 00:15:21

If your customer's trying to reject something that's perfect, you have a document to where you don't look like the bad guy.

Rob Hasman: 00:15:27

Hey, you know, I wanna work with you, but you really put me in a bad spot.

Rob Hasman: 00:15:32

I can't win a claim.

Rob Hasman: 00:15:33

And by the way, the government says this is good.

Speaker C: 00:15:35

Yeah.

Rob Hasman: 00:15:35

On the other hand, the client relationships.

Brian: 00:15:37

I mean that's, that's like the hard part.

Brian: 00:15:39

And it's like so much validity in that client relationship.

Brian: 00:15:43

Like, are they that good of a client if they're kicking lows all the time and you know, pitting them against you?

Brian: 00:15:48

Like.

Rob Hasman: 00:15:48

Right, well and then, you know the old adage, he who holds the gold makes the rules.

Brian: 00:15:52

Right, Right.

Rob Hasman: 00:15:53

Customers know even though they have no legal right to do so, that when they owe you a bunch of ar for sure, they'll just set it offset.

Speaker C: 00:15:59

Yeah.

Rob Hasman: 00:16:00

And if, if not, you know, you don't make a claim.

Rob Hasman: 00:16:02

Right.

Rob Hasman: 00:16:03

They may just not pay you.

Rob Hasman: 00:16:04

Because there is general law in claims other than food claims.

Speaker C: 00:16:09

Right.

Rob Hasman: 00:16:09

That a broker is just, is not liable for damage to widgets on the road.

Speaker C: 00:16:13

Yeah.

Rob Hasman: 00:16:13

But you know, if you get the inspection and it does show damage, it's pretty much, you know, a silver bullet to prove.

Rob Hasman: 00:16:22

Element two.

Rob Hasman: 00:16:23

The other thing is the USDA will be able to help you.

Rob Hasman: 00:16:26

You know, you're always going to fight a battle with insurance and motor carriers, even if you have a claim.

Brian: 00:16:32

Sure.

Rob Hasman: 00:16:33

That again, let's say you have.

Brian: 00:16:34

Why is that?

Brian: 00:16:35

So let me ask you a question, why is that?

Rob Hasman: 00:16:37

You said, well, I'm going to say I was going to get to an issue with the claim.

Speaker C: 00:16:40

Yeah.

Rob Hasman: 00:16:41

You know, when I said a while ago, you always want to make the claim dollar wise, the least it can be, you know, if you have a, if you have a load of berries or let's just say you had a load of frozen chicken or fresh chicken.

Rob Hasman: 00:16:53

Yeah, fresh chicken was worth $12 a pound or whatever it was.

Speaker C: 00:16:57

Yeah, yeah.

Rob Hasman: 00:16:58

And now it's frozen because they ran it wrong.

Rob Hasman: 00:17:01

Well, you know, your customer sometimes will say, well, it's not fit for human consumption.

Rob Hasman: 00:17:06

Dump it.

Rob Hasman: 00:17:06

The motor carrier and its insurance is going to say, we need to sell this.

Rob Hasman: 00:17:10

You know, if we could get $6 a pound, that reduces our claim in half.

Rob Hasman: 00:17:13

So if you have a document that says completely unfit.

Rob Hasman: 00:17:17

Hey, insurance.

Rob Hasman: 00:17:18

Hey, motor carrier.

Rob Hasman: 00:17:19

The government's saying we have to that takes that off the table and you don't have to fight that battle.

Rob Hasman: 00:17:24

On the other hand, if your customer is trying to tell you that it needs to be dumped, you can say, well, it doesn't.

Rob Hasman: 00:17:29

And that, you know, it just is.

Rob Hasman: 00:17:30

There's just a lot of help and utility in that kind of document.

Brian: 00:17:33

So say the load is $30,000.

Brian: 00:17:35

Example you just used with the chicken.

Speaker C: 00:17:37

Right.

Brian: 00:17:37

I have fresh chicken.

Brian: 00:17:38

It's supposed to be raining at 26 degrees.

Brian: 00:17:40

It shows up at 10 degrees.

Brian: 00:17:43

The reefer malfunctioned or what have you.

Brian: 00:17:47

Now we need to go back, like as a broker, I need to go back to the customer and say, listen, we got this inspection.

Brian: 00:17:52

We can salvage this.

Brian: 00:17:54

And by salvage, I mean we can get some sort of return.

Brian: 00:17:57

So now I can go to a secondary market.

Rob Hasman: 00:17:59

Right.

Brian: 00:17:59

And say, you know what?

Brian: 00:18:00

I can sell this for 15 grand.

Brian: 00:18:02

Right.

Brian: 00:18:02

So we have a $30,000 load.

Brian: 00:18:04

We're taking the loss, some of that loss away by selling it for 15 grand to some.

Brian: 00:18:10

A market or a different wholesaler.

Brian: 00:18:13

Is that kind of the route that it is?

Rob Hasman: 00:18:16

Obviously, that's the best case scenario because first of all, it reduces the claim right off the top, which is a good thing.

Speaker C: 00:18:23

Yeah.

Rob Hasman: 00:18:24

Second of all, if insurance doesn't pay the claim for whatever reason, you're not.

Rob Hasman: 00:18:28

You know, a lot of motor carriers don't have the ability to pay an $80,000 claim.

Rob Hasman: 00:18:32

So if you get 45 of it back, it helps.

Rob Hasman: 00:18:34

Sure, that helps.

Rob Hasman: 00:18:36

And the third thing, probably the most important thing, not only is that a good course of action, quite honestly, the law requires that.

Rob Hasman: 00:18:44

The law.

Brian: 00:18:45

The law requires.

Rob Hasman: 00:18:46

No, the law requires when any claim, all parties involved being the shipper, consignee, consignor, broker, and motor carrier, to mitigate the loss.

Speaker C: 00:18:58

Yeah.

Rob Hasman: 00:18:58

And what that means is make the claim the absolute least amount it can be.

Speaker C: 00:19:02

Okay.

Rob Hasman: 00:19:02

So when your customers say, well, you know, I don't want to be involved and helping, I don't, I don't, you know, I don't want to salvage this, which never happened.

Brian: 00:19:10

It's never happened, obviously.

Rob Hasman: 00:19:11

But, well, quite honestly, there's a.

Rob Hasman: 00:19:13

There's a legal duty to do so.

Brian: 00:19:15

Okay.

Rob Hasman: 00:19:15

And a lot of, you know, these things end up in court sometimes, but sure.

Rob Hasman: 00:19:19

Not the kind of court case that's going to create actual law we follow.

Rob Hasman: 00:19:22

That's going to be $1 million claim.

Speaker C: 00:19:24

Yeah.

Rob Hasman: 00:19:25

But you know, there are.

Rob Hasman: 00:19:26

There's definitely.

Rob Hasman: 00:19:27

There would be case laws out there.

Rob Hasman: 00:19:28

Say an entire ocean liner of Michael Jordan's, for example.

Brian: 00:19:33

Yeah.

Rob Hasman: 00:19:34

Worth 50 million.

Speaker C: 00:19:35

Yeah.

Brian: 00:19:35

Pretty value, you know, value there, you.

Rob Hasman: 00:19:37

Know, you might have, they might not be perfect condition when they, because something happened, but you could sell them for 80 cents on the dollar.

Rob Hasman: 00:19:45

Shippers will be like, you deal with it.

Rob Hasman: 00:19:48

They actually have an affirmative duty to help in that.

Rob Hasman: 00:19:51

And if they don't, the court or the insurance company has the right to say tough.

Rob Hasman: 00:19:56

We're taking that off the top.

Brian: 00:19:57

Yeah, that's, I mean that's a good thing to know like, especially for those who are listening today to understand the law.

Brian: 00:20:03

And obviously you hear this man talking like he is extremely detailed.

Brian: 00:20:06

He knows what he's talking about.

Brian: 00:20:08

You know, having somebody in your corner like this that can walk you along the process, I think is, sets you apart from the other brokers out there.

Brian: 00:20:16

And actually knowing and having those, you know, which I think are hard conversations to have with customers.

Brian: 00:20:22

Right.

Brian: 00:20:22

The people that pay your bills today, I need to have a hard conversation with you and help them understand what the law actually states.

Rob Hasman: 00:20:30

Right.

Rob Hasman: 00:20:31

You know, two little dovetails from this, from this claim issue.

Rob Hasman: 00:20:36

You know, there's a thousand different scenarios I run across that we won't get into today.

Brian: 00:20:42

We could talk for hours.

Brian: 00:20:43

This is like a three part episode.

Rob Hasman: 00:20:45

But you know, there's thousands of things that happen in real time.

Rob Hasman: 00:20:49

You know, hostage situations.

Rob Hasman: 00:20:51

Oh yeah, what can I pay and not pay to get, you know, my customers requiring me to take its label off?

Rob Hasman: 00:20:58

Well, there's so many things, but these are the main down the middle things, you know, down the fairway issues that come into claims.

Rob Hasman: 00:21:06

But the other, I think another thing that is very important to know when it, when you're dealing with claims is, you know, at the end of the day your job should be in your industry to make the customer happy, but they also have to work with you.

Speaker C: 00:21:25

Yeah.

Rob Hasman: 00:21:25

And you are going to need to get lots of information and documentation from the customer.

Rob Hasman: 00:21:32

And if they're not willing to provide that to you, not only on this claim, but over and over and over and over and you're gonna keep getting claims with this one customer.

Rob Hasman: 00:21:40

It might be time to look at that relationship because you know, at the end of the day, as I said the word relationship, both sides need to work together to resolve things.

Brian: 00:21:49

We had, God, this was years ago, but we had a melon customer.

Brian: 00:21:52

And that's probably why it's so like ingrained in my mind.

Brian: 00:21:55

But like a lot of their loads were getting tipped over.

Speaker C: 00:21:58

Right.

Brian: 00:21:59

And then there were like four or five in a row and we're like, hold on A second like, this doesn't seem right.

Rob Hasman: 00:22:04

Right.

Brian: 00:22:04

What are your, like, what are your packing processes and how do you wrap the product?

Brian: 00:22:08

And what do you do for airbags?

Brian: 00:22:09

And how, like, what kind of material are you using, you know, for this?

Brian: 00:22:13

You know, I think it was, yeah, it was a melon customer, but we had like four or five in a row.

Brian: 00:22:18

And those are things to.

Brian: 00:22:19

Okay, how do we go back to the customer and how do we have that conversation?

Brian: 00:22:23

So, you know, a couple things that you mentioned and I'll.

Brian: 00:22:27

I'm gonna go over these real quick with the cargo claims.

Brian: 00:22:31

Good and acceptable loading condition, signed bill of lading.

Brian: 00:22:36

Right.

Rob Hasman: 00:22:36

That's the good and acceptable condition at origin.

Speaker C: 00:22:39

Okay.

Rob Hasman: 00:22:40

And your easiest way to prove that is signed bill of lading with no notation of damage at origin, provided the trailer was available to be inspected.

Speaker C: 00:22:49

Okay.

Brian: 00:22:49

Second piece is having some p.

Brian: 00:22:51

Or having some form of rejection at the.

Rob Hasman: 00:22:54

Receiver, proof of damages at the time it.

Rob Hasman: 00:22:58

It reached receiver.

Brian: 00:22:59

Okay.

Brian: 00:22:59

And I think even, you know, brokers listening to this show or claims managers that are listening to the show.

Brian: 00:23:07

I highly encourage pictures, pictures of the product.

Brian: 00:23:11

Pictures.

Brian: 00:23:12

Like everybody has an iPhone or everybody has a camera phone these days.

Brian: 00:23:16

Take.

Brian: 00:23:17

Have the drivers take pictures.

Brian: 00:23:19

It reduces so much finger pointing.

Rob Hasman: 00:23:21

Correct.

Rob Hasman: 00:23:21

And ideally with a timestamp on that.

Rob Hasman: 00:23:23

Because to the point we were talking about a while ago, when you have this clean bill of lading and insurance and your murder carrier says it was clean when I dropped it off.

Brian: 00:23:31

Sure.

Rob Hasman: 00:23:31

,: 1152

Rob Hasman: 00:23:35

That's when you were there.

Brian: 00:23:36

Right.

Rob Hasman: 00:23:37

That helps a ton.

Brian: 00:23:38

Hold on.

Brian: 00:23:39

And then the last piece that you mentioned on the cargo claim is the cost of loss.

Brian: 00:23:43

Okay.

Brian: 00:23:44

So what is the value of this load and what is the value that's being damaged?

Brian: 00:23:49

Just like you mentioned with the 15 pallets of widget widgets, one pallet was damaged.

Brian: 00:23:54

Now they would just want to go and say, oh, this is a $20,000 claim.

Brian: 00:23:57

Well, hold on a second.

Brian: 00:23:59

and one pallet at, you know,: 1200

Brian: 00:24:04

Right.

Brian: 00:24:05

That's an easier loss to stomach than a, you know, $20,000 claim overall.

Rob Hasman: 00:24:10

Absolutely.

Rob Hasman: 00:24:11

And there's so many tentacles of proving damage.

Speaker C: 00:24:15

Yeah.

Rob Hasman: 00:24:15

But the 50,000 foot view is generally the motor carrier will be liable for destination retail value.

Brian: 00:24:26

Okay.

Rob Hasman: 00:24:26

That doesn't mean the insurance policy will pay for that, because insurance policy, some say we only pay wholesale.

Speaker C: 00:24:31

Yeah.

Rob Hasman: 00:24:33

The idea is you want to put the shipper in the same position it would have been in had there not been A claim.

Rob Hasman: 00:24:39

So had there not been a claim, it would have sold its product for X dollars.

Rob Hasman: 00:24:43

So therefore that's what it should be entitled to receive right now.

Rob Hasman: 00:24:46

With that said again, sometimes insurance policies don't pay that.

Rob Hasman: 00:24:49

That doesn't mean the carrier is not still liable for it because insurance policies just, they kick in for only what the policy covers.

Brian: 00:24:56

We can have a separate episode only on the insurance side of it.

Speaker C: 00:24:59

Right?

Rob Hasman: 00:24:59

Right.

Rob Hasman: 00:24:59

If there's a replacement load sent.

Speaker C: 00:25:02

Yeah.

Rob Hasman: 00:25:02

Then you drop the wholesale because they, if you paid retail, it'd be like they had two sales.

Brian: 00:25:07

Sure.

Rob Hasman: 00:25:08

And to prove your damages, you actually need an original PO or invoice pre shipment or at the time of shipment.

Rob Hasman: 00:25:18

To the extent you're trying to get replacement value or sale value or let's say it's damage to a backhoe.

Speaker C: 00:25:25

Yeah.

Rob Hasman: 00:25:26

You need a repair estimate quote from a third party or repair invoice.

Rob Hasman: 00:25:30

So you have to have bona fide valuation documentation.

Rob Hasman: 00:25:34

I see all the time.

Rob Hasman: 00:25:36

Here's my screenshot from my customer's computer.

Rob Hasman: 00:25:39

That's not gonna fly.

Rob Hasman: 00:25:41

And you'll never get a check.

Brian: 00:25:42

So what I'm hearing correctly.

Brian: 00:25:43

So I'm gonna try to lay this out in layman's terms on the broker side because you know, brokers like myself, we're not the smartest.

Brian: 00:25:51

Okay.

Brian: 00:25:51

So you get, you know John Deere, they sell a full size tractor to a dealer or a local Moline in Illinois.

Speaker C: 00:26:03

Right.

Brian: 00:26:03

John Deere, they're sending a tractor out that's valued at $50,000.

Brian: 00:26:07

They might be selling it to that dealer at $60,000.

Rob Hasman: 00:26:11

Correct.

Brian: 00:26:12

What the claim is originally for is that original $50,000 a product.

Rob Hasman: 00:26:17

That's incorrect.

Brian: 00:26:18

It's incorrect.

Brian: 00:26:18

Okay.

Brian: 00:26:18

So it's the 60,000 that they're selling it for had there not been a claim.

Rob Hasman: 00:26:22

So remember, if you keep the premise, the law, and this is not unique to transportation.

Brian: 00:26:27

Yeah.

Rob Hasman: 00:26:28

You're basically looking at what the damages should be for a completed contract.

Speaker C: 00:26:32

Okay.

Rob Hasman: 00:26:32

Okay.

Rob Hasman: 00:26:33

And contract damages, the premise that we learned in nerdy law school is you want to put the party, it's called expectation damages.

Rob Hasman: 00:26:40

You want to put the parties in the same position that they expected to be.

Rob Hasman: 00:26:44

So in your scenario, John Deere sells its tractor and it gets paid 60 grand.

Speaker C: 00:26:50

Okay.

Rob Hasman: 00:26:50

Therefore it expected to receive 60 grand, so it should be paid 60 grand.

Rob Hasman: 00:26:55

Now again, some, as I said five times, sometimes the insurance policy says we only pay costs.

Brian: 00:27:00

Sure.

Rob Hasman: 00:27:01

Now, but this gets into the last thing we should probably talk about on cargo claims before we go to other issue is the freight fees.

Brian: 00:27:08

Okay.

Rob Hasman: 00:27:09

So again, keep in mind, the law wants to put everyone in the same position.

Rob Hasman: 00:27:14

Expected expectation damages.

Rob Hasman: 00:27:16

Your customers will always say, why would I pay you freight?

Speaker C: 00:27:19

Yeah.

Brian: 00:27:19

I paid you $4,000 to move it from Moline, Illinois, and it didn't get there.

Speaker C: 00:27:24

Yeah.

Rob Hasman: 00:27:24

Okay.

Rob Hasman: 00:27:24

So.

Rob Hasman: 00:27:25

So keep this in mind.

Speaker C: 00:27:26

Yeah.

Rob Hasman: 00:27:26

We have a cargo claim.

Rob Hasman: 00:27:27

For your example, the 60 grand insurance writes a check for $58,500.

Rob Hasman: 00:27:35

Motor carrier kicks in, it's $1,500 deductible.

Rob Hasman: 00:27:39

Your customer has received it.

Rob Hasman: 00:27:41

60,000.

Speaker C: 00:27:42

Yeah.

Brian: 00:27:42

Made it.

Rob Hasman: 00:27:43

What did it expect to do?

Brian: 00:27:45

Reduce the freight cost as well.

Rob Hasman: 00:27:47

It's what it thinks it should be.

Speaker C: 00:27:49

Yeah.

Rob Hasman: 00:27:49

But had there not been a claim, what would it have done?

Brian: 00:27:51

Not shipped it.

Rob Hasman: 00:27:52

No.

Rob Hasman: 00:27:52

Had there not been a claim and it arrived, what would it have done?

Rob Hasman: 00:27:55

It had.

Rob Hasman: 00:27:55

Just cut you a check for the four grand.

Brian: 00:27:57

Sure, sure.

Rob Hasman: 00:27:58

Again, so the law should put everyone in the position they expected to be in.

Speaker C: 00:28:02

Yeah.

Rob Hasman: 00:28:02

If they expected to ship it, have no claim, they would have gotten their 60 and given you your four.

Speaker C: 00:28:08

Yeah.

Rob Hasman: 00:28:08

Now that they've gotten their 60, if they don't pay you, they pay you the four.

Rob Hasman: 00:28:12

They're in a better position than they would have been had there been no claim.

Rob Hasman: 00:28:16

And the law does not allow that.

Brian: 00:28:18

I think there's so many scenarios like that, and I hear just different people in our sales teams where the customer never wants to pay for the freight.

Brian: 00:28:23

Right.

Brian: 00:28:24

So that is something to keep in mind, especially, you know, for those brokers out there that even if the there is a claim and we need to, you know, resolve it with insurance, the customer still needs to pay that freight invoice and go ahead.

Rob Hasman: 00:28:37

The reason being, I understand completely the concept of you, the broker, saying, you know what, let's not deal with that because I don't want to rock the boat.

Rob Hasman: 00:28:47

And quite frankly, it's one load.

Rob Hasman: 00:28:49

Depends on the reason you're going to want to try to collect.

Rob Hasman: 00:28:52

That is because, say, you're dealing with Landstar.

Brian: 00:28:55

Sure.

Rob Hasman: 00:28:56

They're going to be saying, give me my money.

Rob Hasman: 00:28:59

And if you don't get paid by your customer, you're writing a check to the motor carrier, who, by the way, is legally entitled to be paid because the claim has been paid.

Rob Hasman: 00:29:07

And then.

Rob Hasman: 00:29:07

u have to pay a motor carrier: 3800

Rob Hasman: 00:29:12

Right.

Rob Hasman: 00:29:13

And you're not getting paid here.

Speaker C: 00:29:14

Yeah.

Rob Hasman: 00:29:14

So again, I understand that.

Rob Hasman: 00:29:16

Let's not ask the customer because there was a claim, but then you're putting yourself at risk, too.

Speaker C: 00:29:21

Yeah.

Brian: 00:29:22

Just do what's right or do what's by the law.

Brian: 00:29:24

We've seen a million times before where shipper sends over details to a load that are inaccurate, right?

Brian: 00:29:29

Then we go back and you say, hey, listen, we can't do this.

Brian: 00:29:32

This is 900 miles overnight.

Brian: 00:29:34

Then the shipper might say, well, all my other brokers do it, right?