Carmack Amendment on the Liability of Carriers Who Provide Warehousing Services

The Carmack Amendment establishes the liability of a carrier for damages or loss of goods incurred during transportation. The Act also defines transportation as services related to the movement of goods including making arrangements for their receipt, and storage. A carrier who offers warehousing services of freight during transit, therefore, bears strict liability for the goods during this storage period in the warehouse.

As a warehouseman, one is expected to exercise reasonable care for the goods in the warehouse. They are subject to liability if the goods are damaged or lost as a result of negligence, but they are exempted if the damages could not be prevented by their exercise of reasonable care. For example, a warehouse can site an act of God to defend itself against a liability claim. This defense, however, only works if the warehouseman did not foresee the impending loss.

Warehouses cannot insert clauses that contravene the required standard of care in the dispensation of their services. Such provisions, although they are part of their contract with the customer are ineffective. Increasing and assuming voluntary liability beyond the provided standard of care is however permitted.

The liability of a carrier who is also a warehouseman can also extend to third parties even though the warehouse has no contractual agreement with them. For example, when you enter into a contract with a customer who stores their freight with your repository before you deliver the cargo to their destination, you have to exercise reasonable care over the goods as a warehouseman. In the case that the goods are damaged and consequentially a third party, such as the manufacturer who sold the products to your customer incurs financial loses and a tainted reputation due to your negligence, the third party is allowed to file claims for tort liability against you.