Household Goods: Implications of Increasing Moving Companies Liability for DOD Shipments
Abstract
From 1967 to early 1987, carriers handling military household goods movements were liable for damage or loss at the rate of $0.60 per pound per article. For example, if a carrier lost or damaged a 70-pound television worth $400, it was liable for the depreciated value or for repairs--up to a maximum of $42 (70 pounds times $0.60). Under the new system adopted in early 1987 by the Military Traffic Management Command (MTMC), the carrier is liable for the full depreciated value of damaged or lost articles up to a maximum amount (valuation) per shipment based on the shipment weight multiplied by $1.26 per pound. For example, if a shipment weighs 4,000 pounds, the carrier is liable for a maximum of $6,000 (4,000 pounds times $1.26). Thus, if only one item in this shipment is lost and its depreciated value is established at $6,000, the carrier is liable for this amount. In the case of the $400 television, the carrier would be liable for the full depreciated value ($400) or for the cost of repairs, whichever is less, and for all other lost or damaged items in the shipment until the total amount of loss and damage reached $6,000. Carrier liability under the new system generally is increased because it is no longer computed on a per-article basis. Commercial tariffs currently include a separate charge (in addition to transportation charges) of $0.60 per $100 of shipment valuation, and in return, the carrier is liable for damages up to $1.26 times the shipment weight. However, the carrier industry has objected to moving Department of Defense (DOD) household goods at this rate primarily because military service member claims for lost or damaged household goods are settled by the military services. DOD then attempts recovery from the carrier up to the extent of the carriers liability. In commercial practice, the carrier usually settles such claims.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 1988
- Accession Number
- AD1171890
Entities
People
- Mark E. Gebicke
Organizations
- United States Government Accountability Office