TRIP Documentation & Legal Requirements 2 — Questions and Answers
Question 1: What distinguishes a negotiable (order) bill of lading from a straight bill of lading?
- A negotiable bill can be transferred by endorsement and delivery (Correct answer)
- A straight bill requires carrier countersignature to be valid
- A negotiable bill names only the shipper, not the consignee
- A straight bill is used exclusively for international shipments
Correct answer: A negotiable bill can be transferred by endorsement and delivery
A negotiable (order) bill of lading represents title to goods and can be transferred by endorsement, while a straight bill is non-negotiable and delivers only to the named consignee.
Question 2: A 'clean' bill of lading indicates that:
- The shipment contains no hazardous materials
- The carrier received the goods in apparent good order and condition (Correct answer)
- All freight charges have been prepaid by the shipper
- The consignee has inspected and formally accepted the goods
Correct answer: The carrier received the goods in apparent good order and condition
A clean bill of lading means the carrier received the goods without noting any exceptions to their condition, quantity, or packaging.
Question 3: Under the Carmack Amendment, what is the standard measure of damages for cargo loss or damage?
- Full replacement cost of the goods at origin
- Fair market value at destination minus salvage value (Correct answer)
- The declared value stated on the bill of lading
- The carrier's tariff liability limit per pound
Correct answer: Fair market value at destination minus salvage value
The Carmack Amendment establishes the measure of damages as the actual loss, generally the fair market value at destination minus any salvage value recovered.
Question 4: A 'claused' (foul) bill of lading is one that:
- Contains a clause requiring arbitration for all disputes
- Notes exceptions or reservations about the condition or quantity of goods received (Correct answer)
- Includes a separate insurance certificate attached to the document
- Is issued after the original bill has been lost in transit
Correct answer: Notes exceptions or reservations about the condition or quantity of goods received
A claused or foul bill of lading contains notations by the carrier indicating defects in the goods' condition, packaging, or quantity at the time of receipt.
Question 5: Under COGSA (Carriage of Goods by Sea Act), what is the carrier's standard per-package liability limit?
- $100 per package or customary freight unit
- $500 per package or customary freight unit (Correct answer)
- $1,000 per package or customary freight unit
- $2,500 per package or customary freight unit
Correct answer: $500 per package or customary freight unit
COGSA limits ocean carrier liability to $500 per package or customary freight unit unless the shipper declares a higher value and pays the applicable ad valorem rate.
Question 6: A through bill of lading is primarily used when:
- Freight moves at the lowest available tariff rate between two points
- Goods move under a single document covering multiple carriers or transportation modes (Correct answer)
- The shipper retains title to the goods until full payment is received
- The consignee must present government-issued identification before taking delivery
Correct answer: Goods move under a single document covering multiple carriers or transportation modes
A through bill of lading covers an entire movement from origin to final destination even when multiple carriers or modes are involved, providing the shipper one document for the entire transit.
Question 7: Under COGSA, what is the statute of limitations for filing suit against an ocean carrier for cargo loss or damage?
- 6 months from delivery or expected delivery
- 1 year from delivery or expected delivery (Correct answer)
- 2 years from the bill of lading date
- 3 years from the date of the cargo claim filing
Correct answer: 1 year from delivery or expected delivery
COGSA imposes a one-year statute of limitations for cargo claims against ocean carriers, running from the date of delivery or expected delivery.
TRIP Documentation & Legal Requirements 2
What distinguishes a negotiable (order) bill of lading from a straight bill of lading?