Freight Brokers, Freight Forwarders, NVOCCs and Indirect Air Carriers: Negotiating with Transportation Intermediaries in the U.S. and Canada by Land, Sea or Air
Negotiating the Pertinent Provisions of Logistics Agreements
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Commercial Law
- event Date
Thursday, November 12, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will focus on the difference between transportation intermediaries that merely arrange for transportation (sometimes referred to as an agency model), and those that take responsibility for the transportation (sometimes referred to as a principal model), and how counsel can address the concerns that each type of arrangement has related to other actors in the supply chain in each primary mode of transportation in the U.S. and Canada. The panel will discuss the key provisions of each type of agreement and provide best practices on negotiating and drafting to insulate clients from risk and mitigate vulnerabilities due to disruptions.
Mr. Rice focuses his practice primarily on matters pertaining to the transportation industry, with experience in rail, intermodal (multimodal), and road transportation, as well as unmanned aircraft systems (UAS or drones). His experience includes transactional and regulatory matters as well as litigation and dispute resolution. Mr. Rice is a frequent author and lecturer on emerging UAS issues, among others.
Mr. Hearn represents international and domestic interests involved in the transportation, supply chain and distribution of goods in litigation, regulatory and contractual matters. He advises shippers, receivers, carriers, logistics providers (3PL’s, supply chain and “fulfillment” providers, freight forwarders, load brokers, customs brokers and warehousemen) and their insurers on their legal interest and exposure in the international, cross-border and domestic carriage of goods by all modes of carriage. Mr. Hearn is a Past President of the Transportation Lawyers Association, an independent, international bar association whose members assist providers and commercial users of transportation and logistics services. He is a frequent speaker at conferences and seminars throughout North America on the above matters and has authored numerous related papers and articles.
Mr. Cavanaugh co-chairs Holland & Knight's Energy Team. His practice includes representation of clients in project development transactions, principally in the areas of technology and infrastructure, including energy and utilities, transportation and communications. Mr. Cavanaugh represents both buyers and sellers in corporate and asset acquisitions and restructuring transactions. He also assists clients with international commercial transactions, including sales and distribution, joint ventures, trade regulation and establishing overseas branch operations.
The global supply chain and worldwide movement of goods has created a growing number of actors in the international transportation field. In addition to shippers and carriers, additional stakeholders have arisen as necessary middlemen to get products to market. The names of these entities vary by country and by mode of transportation, as do the regulations and default liability rules. Counsel advising clients with respect to contracts with transportation intermediaries must understand the distinctions and legal implications under a wide array of federal, provincial, state, and international transportation laws and negotiate the specific contracts that comply with these myriad rules while effectively allocating risk and reducing liability exposure.
“Principal” transportation intermediaries (those that take responsibility for the transportation even if they do not perform the services themselves) may both negotiate the delivery of goods between shippers and recipients and take possession of those products, sometimes solely in transport and, at other times, to store until another segment of travel can be arranged. In arranging transportation with a “principal” transportation intermediary, it is important to clarify what liabilities and functions are or are not assumed and what is necessary for adequate insurance coverage. Such intermediaries have the added potential responsibility of negotiating customs clearance of the goods in their possession and must be aware of the risks associated with those duties.
Counsel for “Agent” transportation intermediaries (those that merely arrange transportation with third party providers) must ensure that their clients are acting solely as third-party negotiators and not inadvertently creating liability for the goods in question. Sometimes such intermediaries elect to take on such liability, but this should be a point of negotiation not carelessness. These contracts should stress the importance of indemnity/hold harmless provisions, as well as the need for potentially more than the minimum insurance requirement provisions to cover reasonably foreseeable losses. Risk of non-payment to a carrier (or the prospect of double payment by the shipper) is typically greater, and vetting of parties to the transaction is important.
Understanding the allocation of liability between the different parties in a transportation agreement, the nature of the intermediary's role, and the necessary insurance is part of the foundation of creating enforceable contracts. Counsel should also consider other essential provisions, including service rates, payment terms, damages, best efforts, force majeure, confidentiality, and more.
Listen as our authoritative panel of transportation attorneys explains best practices for drafting freight forwarder and freight broker contracts and when each should be used. The panel will provide strategies for counsel to avoid common contracting pitfalls when negotiating terms to minimize the risk of loss, damage, or non-delivery of commercial goods.
- Transportation intermediary as “agent”: definitions and distinctions in the U.S. and Canada
- Transportation intermediary as “principal”: definitions and distinctions in the U.S. and Canada
- Transportation by mode in the U.S. and Canada with both types of intermediaries:
- Truck (U.S. and Canada)
- Rail (U.S. and Canada)
- Ocean (U.S. and Canada)
- Air (U.S. and Canada)
- Discussion will include key provisions such as:
- Limitation of Liability
- Insurance
- Consistency between the contract and shipping documents – bills of lading, waybills, receipts
- Consistency between the shipper-intermediary contract and the intermediary-carrier contract
- Retention of goods and warehousing
- Limitation or extension possessory lien rights
- Damages – limitations and exclusions
- Rates and payment terms
- Minimum volume commitments
- Delay provisions and Key Performance Indicators (KPIs)
- Disputes resolution, choice of law and forum
- Special arrangements for high-value shipments or for commodities that require special handling
- Force majeure
- Best efforts
- Key regulatory provisions
- Claims handling procedures
The panel will review these and other priority issues:
- The key distinctions legally and practically between types of transportation intermediaries
- How federal, state, provincial and international laws govern contracts with transportation intermediaries
- What are the critical provisions that counsel should carefully negotiate when drafting logistics agreements?
- How can insurance, as well as contracting strategies, be used to mitigate risk?
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