Reproduced with the Permission of Miles L. Kavaller

Both the Federal Bills of Lading Act (49 U.S.C. Sections 80101, et seq., and particularly sec. 80113) and the California Commercial Code (Sec. 7301 ) contain shipper's load and count ("SLC") provisions which state that where the shipper loads the cargo, a carrier is NOT responsible for "...damages caused by nonreceipt by the carrier of any part of the goods by the date shown on the bill of lading or by failure of the goods to correspond with the description contained in the bill" or "...for damages caused by improper loading..." provided that an SLC notation is contained on the bill of lading. In the absence of an SLC notation, the carrier must count package freight and IS responsible for shortages as well as damages caused by improper loading.

Shippers will load, count and seal TL freight to ensure its integrity throughout the trip. Further, there is a cost savings since the carrier does not provide the labor, whether by the driver, or otherwise, and further is not liable for shortages or damage caused by the shipper's improper loading.

With these general rules in mind, how would you decide the following case if you were the judge? The shipper counts, loads and seals three TL shipments each weighing 25,000 pounds which it tenders to the motor carrier for transportation. Each of the bills of lading contains an appropriate SLC notation. Two of the shipments are delivered; the third is delayed. The carrier locates the driver at Harrah's in Stateline, NV (Lake Tahoe) and learns that the shipment has been sold at "bargain basement" prices by the driver who has not been lucky enough to cover his gambling losses. The shipper submits a claim for $50,000 which is the invoice price of the goods and withholds (off-sets) payment of freight charges owed to the carrier in that amount. The carrier responds by suing the shipper for $37,500 representing the difference between the invoice price of the goods ($50,000) and a fifty cents per pound limitation of liability which is contained in the terms and conditions of the bill of lading ($12,500) and also contends that additional freight charges are owed for the charges on the shipments which the shipper has off-set since they were not timely paid resulting in a loss of the discounted freight rate. What, if effect does the SLC notation on the bill of lading have in this lawsuit?