Cargo Spills Can Wreak Financial Havoc…Are You Covered?

In 1976, a truck traveling on the 610 West Loop in Houston at an unsafe speed, hit a support beam and fell onto the Southwest Freeway releasing over 7,000 gallons of undiluted industrial anhydrous ammonia. The spill claimed 7 lives and injured nearly 200 people who were exposed to the extremely dangerous gas.

Trucking accidents occur every day and can reach hundreds of thousands, even millions of dollars in liability costs, damaged products, cleanup, lawsuits, damaged equipment…the list goes on and on.

Spills can happen at any time due to a multitude of reasons. Just last January, a tanker truck carrying 40,000 lbs of hot liquid chocolate spilled on an Arizona freeway due to the latch between the truck and the trailer becoming detached. Or as Gina Jones, Vice President, Director, Environmental Programs, Burns & Wilcox, recounts a milk spill in which thousands of gallons of milk spilled in local streams, polluting the water and harming wildlife, resulting in a $1 million loss. (1)

Even if the driver was unable to avoid a crash, they can still be held liable and what’s more, “standard trucking liability insurance often does not cover pollution.” (2) As Mauricio Zani, Manager, Inland Marine, Burns & Wilcox Canada, Toronto, Ontario, explains, “A pollutant doesn’t have to be a chemical or something hazardous in nature. A pollutant simply means something that is in an area where it doesn’t belong.” (1)

Who’s liable?

Liability from cargo spills range from the carrier to shippers, loaders, purchasers, and manufacturers who can face cleanup costs, fines, cargo costs, lawsuits, etc.

Still wondering how you can be held liable? Imagine this. You’re one of those companies who take pride in saving money by auctioning off lanes in order to find the cheapest rate. So you utilize a 3rd party, who then contracts a carrier to deliver your freight. You, however, did not know that this 3pl, like many others, does not always vet out drivers beforehand, checking their CSA scores. Therefore, your 3pl has now contracted a carrier who, if they had checked, would have found that they had several alert statuses against them. This carrier, who is now carrying your freight, gets into an accident and a picture of your product spilled across the road is displayed on the news, ruining your brand equity and the reputation you spent years building. You are now facing due diligence.

Simply put, due diligence is “the care a reasonable person should take before entering into an agreement or a transaction with another party.” (3) Did you do enough to make sure that the carrier you chose was qualified?

It is your responsibility to put your freight onboard a qualified and safe carrier. When entrusting a 3rd party to find the cheapest rate, you are taking the chance of shipping with some unknown carrier who may be on an alert status in one or more of the CSA’s BASIC categories. This not only puts your freight at risk, but poses a danger to everyone else on the road.

The saying stands…you get what you pay for but did you really save a few dollars in the end or did it cost you thousands, even millions, from liability along with a priceless reputation?

If your business involves transporting hazardous materials, then you have additional responsibilities that others do not. Nearly 3 billion tons of hazmat products are moved in the US a year, according to the DOT. (4) Not only are you responsible for transporting, using, disposing and storing the materials in a safe and compliant manner, you’re also required to pay the applicable costs associated with these actions. This liability covers those costs associated with the cleanup and containment that are necessary in the event of a spill or release of a hazardous substance. You are also responsible for the costs of any damages that could result from such a spill such as accidents, exposure, combustion, etc. The Environmental Protection Agency is the federal entity in the United States that oversees these issues. In addition to the costs noted above, it’s also possible that your company will be penalized for the release of the hazardous materials. In some cases, the cost of these penalties could be as much as $25,000 per day.

Road Scholar Transport has you covered with $5 million in pollution coverage so you can rest easier knowing that your freight is in good hands. Visit https://roadscholar.com/hazmat-and-chemical-transport to learn more about our hazmat and chemical transport services.