In the October 2009 issue of PARCEL, Dan Malech authored an article entitled Fundamental Differences between UPS and FedEx for the Transportation ABCs department. In the article, Dan discussed examples of seemingly slight differences in terminology, pricing or operations that could have a not so slight economic impact. For instance, "Since each company runs a different air/ground network strategy, it may impact whether your package flies on an aircraft or stays on the ground. This may have implications for the number of times a package is sorted, and thus damage incidence."
As a transportation lawyer, when I saw the word "damage," I thought "claim," as in "a claim for loss or damage to cargo." This led to the further thought that there is a very fundamental difference between a claim for damage against a motor carrier and a claim for damage against an air carrier.
As a general principle, motor carriers are subject to a regulatory framework comprised of Federal Statutes and Federal Regulations, which have been in effect in one form or another since the passage of the Motor Carrier Act of 1935. The gist of this framework is to make the motor carrier fully liable for damage to cargo unless there is a valid limit of liability contained in the carrier's tariff or in an individual contract. Perhaps of even more significance, a shipper has a nine month period in which to file a damage claim against a motor carrier, and this period cannot be shortened by the carrier by "rule, contract, or otherwise."
To the contrary, domestic air carriage has been essentially deregulated since 1977. While domestic air carriers do have liability for loss or damage to cargo based upon the principles of common law, there are no Federal Statutes or Regulations governing their liability. Thus, not only can air carriers limit their liability within their tariffs or contracts, they can also establish extremely short limits for the filing of damage claims, e.g. 30 days, 15 days or even less.
Accordingly, with regard to legal matters, the most relevant question is not whether it is UPS or FedEx that transports a shipment, but in which capacity UPS or FedEx is acting. The Federal Motor Carrier Safety Administration website (www.fmcsa.dot.gov) shows that one member of the UPS corporate family, UPS Ground Freight, Inc. d/b/a UPS Freight, holds operating authority as a motor common carrier, a motor contract carrier and as a motor transportation broker with a federal registration number of MC-109533.
Similarly, one member of the FedEx corporate family, FedEx Freight, Inc. d/b/a FedEx Freight, also holds operating authority as a motor common carrier, a motor contract carrier and as a motor transportation broker with a federal registration number of MC-121805. Thus, if a package were moved by FedEx Freight as a motor carrier, a shipper would have nine months to file a claim, not the much shorter period for filing a claim if FedEx moved the package as an air carrier.
As another example, if either UPS or FedEx moved a package pursuant to its motor common carrier authority, then any claim for loss and damage would be filed against UPS or FedEx. However, if UPS or FedEx used its motor transportation broker authority to arrange for another carrier to move a package, then any claim for loss and damage would have to be filed against the carrier actually transporting the package•unless there was a tariff or contract provision whereby UPS or FedEx assumed responsibility.
In addition to damage claims, claims involving freight overcharges, undercharges or non-payment of freight charges involving motor carriers are governed by certain Federal Statutes and Regulations, but there are no similar laws for air carriers. With regard to air carriers, certain laws and regulations apply when an air carrier is providing domestic services, and others apply when providing international services.
Moreover, even a cursory review of the UPS and FedEx websites reveals that they offer a myriad of other services. For example, UPS Ocean Freight Services, Inc. is a NVOCC (Non-Vessel Operating Common Carrier) providing ocean transportation. Such services are governed by yet another set of international treaties, federal laws and the individual carrier's terms and conditions.
It is just as important to know the differences within the FedEx and UPS corporate families as it is to know the differences between FedEx and UPS. In order to accurately determine the legal rights and obligations of UPS or FedEx with regard to a shipper customer, it is not enough to say "it's UPS" or "it's FedEx."
All for now!
Brent Wm. Primus, J.D., currently serves as the General Counsel for the Freight Transportation Consultants Association, Senior Editor of transportlawtexts, inc., and CEO of Primus Law Office, P.A. Previous columns, including those of William J. Augello, may be found in the "Content Library" on the Parcel website (parcelindustry.com). Your questions are welcome atbrent@transportlawtexts.com.
As a transportation lawyer, when I saw the word "damage," I thought "claim," as in "a claim for loss or damage to cargo." This led to the further thought that there is a very fundamental difference between a claim for damage against a motor carrier and a claim for damage against an air carrier.
As a general principle, motor carriers are subject to a regulatory framework comprised of Federal Statutes and Federal Regulations, which have been in effect in one form or another since the passage of the Motor Carrier Act of 1935. The gist of this framework is to make the motor carrier fully liable for damage to cargo unless there is a valid limit of liability contained in the carrier's tariff or in an individual contract. Perhaps of even more significance, a shipper has a nine month period in which to file a damage claim against a motor carrier, and this period cannot be shortened by the carrier by "rule, contract, or otherwise."
To the contrary, domestic air carriage has been essentially deregulated since 1977. While domestic air carriers do have liability for loss or damage to cargo based upon the principles of common law, there are no Federal Statutes or Regulations governing their liability. Thus, not only can air carriers limit their liability within their tariffs or contracts, they can also establish extremely short limits for the filing of damage claims, e.g. 30 days, 15 days or even less.
Accordingly, with regard to legal matters, the most relevant question is not whether it is UPS or FedEx that transports a shipment, but in which capacity UPS or FedEx is acting. The Federal Motor Carrier Safety Administration website (www.fmcsa.dot.gov) shows that one member of the UPS corporate family, UPS Ground Freight, Inc. d/b/a UPS Freight, holds operating authority as a motor common carrier, a motor contract carrier and as a motor transportation broker with a federal registration number of MC-109533.
Similarly, one member of the FedEx corporate family, FedEx Freight, Inc. d/b/a FedEx Freight, also holds operating authority as a motor common carrier, a motor contract carrier and as a motor transportation broker with a federal registration number of MC-121805. Thus, if a package were moved by FedEx Freight as a motor carrier, a shipper would have nine months to file a claim, not the much shorter period for filing a claim if FedEx moved the package as an air carrier.
As another example, if either UPS or FedEx moved a package pursuant to its motor common carrier authority, then any claim for loss and damage would be filed against UPS or FedEx. However, if UPS or FedEx used its motor transportation broker authority to arrange for another carrier to move a package, then any claim for loss and damage would have to be filed against the carrier actually transporting the package•unless there was a tariff or contract provision whereby UPS or FedEx assumed responsibility.
In addition to damage claims, claims involving freight overcharges, undercharges or non-payment of freight charges involving motor carriers are governed by certain Federal Statutes and Regulations, but there are no similar laws for air carriers. With regard to air carriers, certain laws and regulations apply when an air carrier is providing domestic services, and others apply when providing international services.
Moreover, even a cursory review of the UPS and FedEx websites reveals that they offer a myriad of other services. For example, UPS Ocean Freight Services, Inc. is a NVOCC (Non-Vessel Operating Common Carrier) providing ocean transportation. Such services are governed by yet another set of international treaties, federal laws and the individual carrier's terms and conditions.
It is just as important to know the differences within the FedEx and UPS corporate families as it is to know the differences between FedEx and UPS. In order to accurately determine the legal rights and obligations of UPS or FedEx with regard to a shipper customer, it is not enough to say "it's UPS" or "it's FedEx."
All for now!
Brent Wm. Primus, J.D., currently serves as the General Counsel for the Freight Transportation Consultants Association, Senior Editor of transportlawtexts, inc., and CEO of Primus Law Office, P.A. Previous columns, including those of William J. Augello, may be found in the "Content Library" on the Parcel website (parcelindustry.com). Your questions are welcome atbrent@transportlawtexts.com.
