Appeal Court decision has implications
A warning to Logistics providers
NORTH West online white goods retailer DRL has won a Court of Appeal case after a dispute with logistics giant Wincanton Group.
The appeal court overruled an earlier decision by the High Court and ordered Wincanton to repay DRL - which trades as - appliancesonline.co.uk - more than £500,000 including costs.
The dispute began in 2007 and came to a head in 2008. It related to liability of goods damaged while in the care of the logistics group and the standard of the delivery service provided by Wincanton to DRL’s customers.
DRL had engaged Wincanton to deliver to its customers across the UK.
Under the terms of the contract, Wincanton was required to offer to unpack and inspect the goods for each customer on delivery. However, DRL claimed that the logistic firm failed to comply with the standards required and operated a ‘dump and run’ service and, as a result, was left with a large number of customer complaints and almost £3m worth of lost and damaged goods.
Towards the end of the contract between the two parties, DRL agreed, despite its concerns over damage to goods to pay Wincanton £1m in order for it to continue to deliver the remaining orders and ensure a smooth handover with the incoming logistics company in order for liability to be agreed at the end of the contract.
However, two days before the contract was due to end, Wincanton demanded a further £250,000, rising to £300,000 for the release of stock owned by DRL and due to be delivered to its customers.
DRL took its case to the High Court and while the High Court agreed that Wincanton’s demands for a further £300,000 was a breach of the agreement and “quite unjustified and a flagrant attempt to impose improper commercial pressure on DRL to pay a further significant sum which the parties had agreed should be frozen”, it ruled that DRL was still obliged to make payment for deliveries made by Wincanton.
However, the Court of Appeal has now overturned that decision and has ordered Wincanton to repay DRL in excess of £470,000 plus costs. The final sum owed by Wincanton in relation to the claim is still to be determined and is likely to be heard by the High Court in 2012 in the absence of an agreement being reached.
Transport prosecutions rising - 12 May 2011
Another Haulage company has been prosecuted for tachograph offences. See article http://3bl.me/ag46vy for full details, however this is an example of the success achieved under stricter policing initiatives in Northern Ireland.
Piracy concerns mounting - 28 March 2011
Concern is mounting in the marine hull and machinery market at the prospect of total loss claims coming in, owing to the longer periods of time Somali pirates are holding vessels captive.
Wordings in many marine hull policies mean shipowners are able to claim a total loss if they are denied access to their vessel for more than 12 months. This notice of abandonment or deprivation is a big concern for underwriters, quotes a senior Lloyds underwriter.
It remains to be seen whether shipowners would look to make a claim under this deprivation clause however, as it could be a public relations disaster - in making a claim, the owner would for all intents and purposes be abandoning the crew.
Another cause for concern for marine underwriters is the trend of using larger captured vessels as mother ships.
A look back at transport crime in 2009
The crime hotspots of Europe have remained largely the same in 2009 as in the previous year with no real surprises. The usual hotspots top the list, including London, Venlo, Paris, and Birmingham. However, other countries and cities have started to appear on the radar, whether due to increased information gathering on the part of commercial intelligence units or in some cases, a genuine increase in the threat. Austria, Spain and Romania have now firmly established themselves as locations of growing criminal activity. Romania has been shown to be developing into a serious hotspot too. Increases in reporting of incidents in Greece, Sweden, Germany and Russia have also given the cargo community a greater understanding of the European wide nature of freight crime, which can only help fight freight crime throughout the EU.
Hijacking alert - Palermo, Italy
There have been at least 2 reported hijackings in Palermo during the last quarter. The first occurred on 26th August, when a truck driver was forced to stop by three criminals in an unidentified vehicle. Two of them placed him in their car and drove with him for approximately two hours whilst the third offender drove off with the truck.
The second occurred on 8th September 2009 when a truck driver was unloading his truck. The criminals covered the driver's head with a hood and forced him to get into a nearby car. He was released a few hours later. The truck and its cargo have not been recovered.
a&b wins contract to supply freightnet.com with insurance brand
a&b has this week (16 October 2010) agreed to provide the on-line insurance platform for www.freightnet.com's new cargo insurance service, www.freightsure.com. The site will go live in late November, so watch this space!!
Legal ruling could have serious consequences for Freight Industry
A recent court ruling whereby a logistics company received a pallet of blue tooth mobile phone devices into their warehouse, which they knew nothing about, has sent shockwaves through the the Freight Industry. The pallet should not have been sent to them and should have instead been sent to Manchester Airport Handling Centre. Unfortunately, whilst the receiving logistics were unwilling bailees of this pallet it was stolen in a raid.
Due to the fact that there was no contract between the receiving logistics company and the owner of the goods, the logistics company could not rely upon their standard trading conditions (BIFA), insurers would not pay the claim and as such were liable in full for the loss. The court ruling confirmed the logistics company must pay the goods owners' claim in full.
Freight theft no game for computer industry
A recent incident saw a lorry load of ‘Brothers in Arms’ games was hijacked near Leeds, the thieves making off with an estimated £600,000 worth of software. Sadly for computer games distributors, or producers exporting/importing goods directly, this is not a one off case. Over the past year, the number of freight thefts targeting computer game shipments has increased rapidly. It seems freight crime is threatening to cripple the games market in the same way the mobile phone industry suffered just a few years ago.
Parallels between the two industries are clear: small, high value products mean that individual shipments are worth considerable amounts and their contents can be easily sold on. But computer games also offer an added attraction. While mobile phone can and are re-sold after theft, they do present some difficulties in terms of security locks etc. There are no such hurdles with computer games – they can be stolen and sold the same day.
Anyone involved with the distribution of computer games need to make sure they are protected now before risking significant financial loss. Here are our top three tips on the issue:
1) Don’t assume. Many distributors automatically assume the freight forwarder they are using is insured. While the deregulation of freight forwarders from FSA authority does mean that more are likely to offer an insurance package, this isn’t guaranteed. It should certainly be one of the first things that distributors check.
2) Check policy wording. Insurance policies that cover ‘goods in transit’ may literally cover goods while moving but not while stationary i.e. they take no account of possible journey interruptions or storage requirements pre or post transit. Warehouses do get broken into; lorries do get hijacked from stop spots. Checking that policies cover these eventualities is a must.
3) Work closely with freight forwarders on security. Policies won’t pay out in the event of fraud which a case will often be deemed to be if it is found that ‘insider involvement’ has taken place. With estimates suggesting that around 90% of freight crimes involve some form of insider collaboration this is a major issue. Where possible, distributors should look for accreditations such as the TAPA Asset Protection Association) A class award, as certifications such as these testify that the forwarder in question operates to high security standards. However, simply sitting down and discussing security measures in place, including background checks on staff, can protect against potential mishaps.