Chapter 11: Freight by Railroad
Legal Framework Governing Railroad Freight
1. International Conventions and Agreements:
* CIM (Uniform Rules Concerning the Contract for International Carriage of Goods
by Rail):
- Applies to cross-border railroad freight in Europe and parts of Asia.
- Governs the rights, obligations, and liabilities of carriers and shippers.
* SMGS (Agreement on International Goods Transport by Rail):
- Regulates international rail freight in Eastern Europe, Asia, and the CIS region.
- Focuses on the terms for cargo transport, including documentation and liability.
2. National Laws and Regulations:
* Domestic laws govern rail freight contracts, carrier liability, and safety standards
within individual countries.
* May include rules on pricing, handling hazardous materials, and dispute resolution.
3. Freight Agreements and Contracts:
* Specific agreements between shippers and carriers outline the terms of transport,
including freight rates, delivery schedules, and liabilities.
Rights and Obligations of Carriers and Shippers
Rights of the Carrier:
1. Freight Charges:
The carrier is entitled to collect the agreed-upon freight charges.
2. Refusal of Service:
May refuse to transport improperly packaged or illegal goods.
3. Lien on Goods:
Right to retain goods if freight charges are not paid.
Obligations of the Carrier:
1. Timely Delivery:
Must transport goods to the destination within the agreed timeframe.
2. Care for Goods:
Ensure the safety and proper handling of goods during transit.
3. Compliance with Regulations:
Adhere to national and international safety and transport standards.
Rights of the Shipper:
1. Timely and Secure Transport:
Right to expect the carrier to deliver goods securely and within the agreed time.
2. Access to Information:
Right to receive updates on shipment status.
3. Compensation for Loss or Damage:
Entitled to compensation if goods are lost, damaged, or delayed due to the carrier's
negligence.
Obligations of the Shipper:
1. Proper Packaging and Documentation:
Ensure goods are appropriately packaged and accompanied by required documents
(e.g., waybill, invoice).
2. Compliance with Regulations:
Abide by legal requirements for hazardous or restricted goods.
3. Payment of Freight Charges:
Pay the carrier as per the agreed terms.
Procedures for Dispute Resolution in Railroad Freight
1. Negotiation:
- Parties attempt to resolve disputes amicably through direct communication.
- Often involves clarifying contractual terms or addressing specific grievances.
2. Mediation and Arbitration:
- If negotiation fails, mediation or arbitration may be used to settle disputes.
- Some countries or agreements, like CIM or SMGS, mandate arbitration for specific
disputes.
3. Litigation:
- Disputes can be taken to court under the jurisdiction stipulated in the contract or
governed by national law.
- Common causes include:
+ Loss or damage to goods.
+ Delays in delivery.
+ Non-payment of freight charges.
4. Claims Process:
- Filing a Claim: The aggrieved party must file a written claim with the carrier,
including details of the shipment and nature of the issue.
- Carrier Response: The carrier investigates the claim and provides a resolution or
explanation.
- Time Limits: Claims must typically be filed within a specified time (e.g., 60–180
days) as per legal or contractual provisions
Summary of freight transportation by railroad:
Aspect Details
Bulk commodities, intermodal containers, automotive parts,
Types of Freight
chemicals
Advantages Cost-effective, environmentally friendly, high capacity
Limited flexibility, slower for short distances, high infrastructure
Disadvantages
costs
Locomotives, freight cars (boxcars, flatcars, tankers), rail
Key Components
infrastructure
Class I Railroads (BNSF, Union Pacific), regional and shortline
Major Players
railroads
Governed by the Surface Transportation Board (STB) and safety
Regulation
regulations by the FRA
Technology use (GPS tracking), environmental initiatives
Innovations
(greener locomotives)
Global International shipping (e.g., Trans-Siberian Railway),
Considerations collaboration with other transport modes