Fed Ex Ground Rips us for $50K

[RockDoc]

Date: 4/7/2005 11

9:37 AM
Author: aljdewey

Date: 4/7/2005 4:33:59 AM
Author: RockDoc

In the fact that they accepted a payment (consideration) they fundementally sold you some level of coverage.

Not really. They accepted a payment for assuming the liability risk of handling a shipment of excessive value. That''s not insurance ''coverage'', and cannot be interpreted as such.

I guess I used the wrong word.... i.e. coverage instead of liability.

But still, a consideration was paid, and their has to be perceived or actual value as a basis of assessing a charge.

What would a reasonable person assume from this? the reasonable person test is a basis.

Many companies have disclaimers, but in many situations, particualarly where the consumer is charge for something, there has to be a value or benefit perceived by the customer.

Will be interesting to watch this develop.

Rockdoc.

 

[aljdewey]

Date: 4/7/2005 12:53:24 PM
Author: RockDoc

Date: 4/7/2005 11

9:37 AM
Author: aljdewey

Date: 4/7/2005 4:33:59 AM
Author: RockDoc

In the fact that they accepted a payment (consideration) they fundementally sold you some level of coverage.

Not really. They accepted a payment for assuming the liability risk of handling a shipment of excessive value. That''s not insurance ''coverage'', and cannot be interpreted as such.

I guess I used the wrong word.... i.e. coverage instead of liability.

But still, a consideration was paid, and their has to be perceived or actual value as a basis of assessing a charge.

What would a reasonable person assume from this? the reasonable person test is a basis.

Many companies have disclaimers, but in many situations, particualarly where the consumer is charge for something, there has to be a value or benefit perceived by the customer.

RockDoc, the problem here is that there two components. 1) WHETHER or not the carrier is liable, and 2) IF they ARE liable, for HOW MUCH?

#2 only becomes relevant is #1 is satisfied. If it cannot be proved that the damaged was caused by the CARRIER, then the value - standard or declared - is irrelevant.

The "value or benefit perceived" to the customer in paying the elevated declared value fee ONLY becomes relevant when it is determined that the damage was caused by the carrier.

At that time, the "value or benefit perceived" by the customer is the right to recoup more than the standard $100.

The "what would a reasonable person assume" argument only goes so far. It''s fine to opine what a reasonable person would "assume" lacking any written directive.....then it''s open to interpretation. Frankly, I expect a "reasonable person" to read the terms and conditions and understand what they are paying for.

However, if the representation made by the FedEx representative is consistently at odds the the written policy, then reasonableness comes back into play. This means R/T could make their case that the FedEx representative specifically CALLED it *insurance* or *insuring* (which they said s/he did) instead of asking if they wanted to ship it with a declared value. If they got 4 friends to go to that FedEx location with packages they wanted to declare excess value on and each of those folks were asked if they wanted to "insure" their high-value, then they could argue that there was reason to interpret the offer as insurance.

 

[niceice]

Date: 4/7/2005 9:43:58 AM
Author: esqknight
Hi Folks,

I was wondering about another impact of this situation regarding the return policies of respective Pricescope venders. What happens if a customer decides to return a diamond and it is lost by the carrier? Since there isn''t any insurance provided by the carrier (or at least Fed Ex), is the customer left to fight with Fed Ex to recover the cost of the stone? Does the vender refund the customer and fight with Fex Ex? Or does the vender refund the money and its insurance picks up the lost?

Just wondering...
Eric

The interesting thing about this entire scenario is that we would have had a stronger position if we had sent the diamond on the Fed Ex account that we use to ship diamonds and jewelry because it is a Declared Value Exception policy that is an actual insurance policy provided by Fed Ex for the contents of the package... And Fed Ex DVX is investigating our claim and attempting to intercede on behalf of us with Fed Ex Ground because part of the arguement used by Fed Ex Ground is that we insured the package for a high value and have not shipped with them before so they apparently believe that in doing so we attempted to defraud them. Since we ship high value packages with Fed Ex DVX on a daily basis and have a zero loss ratio, they know our history AND they have more to lose in terms of business from us and those companies which we have referred to their program.

When a client needs to return an item to us, we assist them in doing so to ensure proper coverage. If Fed Ex, USPS or UPS drop the ball, our Jewelers Block policy kicks in for additional coverage, we don''t know how other PS vendors have their policies set up, but we are essentially covered by two separate insurance companies every time we ship a package or when a client ships something to us on our account.

 

[RockDoc]

Date: 4/7/2005 1:27:31 PM
Author: aljdewey

Date: 4/7/2005 12:53:24 PM
Author: RockDoc

Date: 4/7/2005 11

9:37 AM
Author: aljdewey

Date: 4/7/2005 4:33:59 AM
Author: RockDoc

In the fact that they accepted a payment (consideration) they fundementally sold you some level of coverage.

Not really. They accepted a payment for assuming the liability risk of handling a shipment of excessive value. That''s not insurance ''coverage'', and cannot be interpreted as such.

I guess I used the wrong word.... i.e. coverage instead of liability.

But still, a consideration was paid, and their has to be perceived or actual value as a basis of assessing a charge.

What would a reasonable person assume from this? the reasonable person test is a basis.

Many companies have disclaimers, but in many situations, particualarly where the consumer is charge for something, there has to be a value or benefit perceived by the customer.

RockDoc, the problem here is that there two components. 1) WHETHER or not the carrier is liable, and 2) IF they ARE liable, for HOW MUCH?

#2 only becomes relevant is #1 is satisfied. If it cannot be proved that the damaged was caused by the CARRIER, then the value - standard or declared - is irrelevant.

The ''value or benefit perceived'' to the customer in paying the elevated declared value fee ONLY becomes relevant when it is determined that the damage was caused by the carrier.

At that time, the ''value or benefit perceived'' by the customer is the right to recoup more than the standard $100.

The ''what would a reasonable person assume'' argument only goes so far. It''s fine to opine what a reasonable person would ''assume'' lacking any written directive.....then it''s open to interpretation. Frankly, I expect a ''reasonable person'' to read the terms and conditions and understand what they are paying for.

However, if the representation made by the FedEx representative is consistently at odds the the written policy, then reasonableness comes back into play. This means R/T could make their case that the FedEx representative specifically CALLED it *insurance* or *insuring* (which they said s/he did) instead of asking if they wanted to ship it with a declared value. If they got 4 friends to go to that FedEx location with packages they wanted to declare excess value on and each of those folks were asked if they wanted to ''insure'' their high-value, then they could argue that there was reason to interpret the offer as insurance.

It is a generally common practice when shipping valuables in our industry to NOT declare the value of a package.

Most of the third party insurance companies, insist on this. Alerting a shipping company of a package being of a high value can cause a package to be stolen, and as such, we are not permitted to make any references that would be construed as containing a valuable item they they provided insurance for.

If a shipper isn''t providing some sort of "coverage" ( Insurance, liability, responsibility etc) what is the benefit of making a value declaration, and why should the sender be charged additionally?

Certainly one would think that if third party providers of the insurance we purchase for shipping packages, doesn''t want an open disclosure of the value, why shouldn''t we as senders follow their precedent?

As to liability, of who''s responsible for the damage, R/T has photos do support that the machine was in good condition, and only required specific calibration. I am sure there is a email/paper trail documenting this between them and OGI.

I probably would have taken a different course than R/T did. It appears that OGI''s laser inscription machines have problems, as Dave Atlas seems to have a problem with his machine, similar to that of Nice Ice''s. OGI certainly has the liability of providing a machine that would function as they represented to each of them. Due to whatever cause, this hasn''t been provided to their customers, and resolution is to have the customer ship it back. In my opinion - they should have taken the lion''s share of the shipping costs,and liability to accomplish this, as purchasing a machine that doesn''t do what is promised is their burden. One must also assume that if the machine worked then there would be not need to be shipping it back and forth. If this were a unique problem, then I wouldn''t comment this way. But it appears that it is or might be a constantly recurring problem, as we have two members of the forum who have these units, and both ( 100%) have said they have problems. How many other OGI items like this that were sold have the same situation?

I would have demanded that they send someone to me to properly fix, adjust, calibrate and install the machine so it would function as promised. Of course it''s easy to be an after the fact critic. Flying an employee around the country to avoid the risk of shipping on a machine of this cost, is minor as compared to the risk that OGI put on its customers.

I''m not saying that what you wrote is incorrect.. I just think that consideration of the primary fact is worth commenting about.

Rockdoc

 

[aljdewey]

Date: 4/8/2005 3:33:57 PM
Author: RockDoc


It is a generally common practice when shipping valuables in our industry to NOT declare the value of a package.......Most of the third party insurance companies, insist on this. Alerting a shipping company of a package being of a high value can cause a package to be stolen, and as such, we are not permitted to make any references that would be construed as containing a valuable item they they provided insurance for.

I don't doubt you at all. That's *why* most folks who ship jewelry on any regular basis (jewelers/appraisers/etc) have third-party insurers on the side. It makes sense not to draw any attention to easy-to-steal, highly-marketable goods like diamonds.

Date: 4/8/2005 3:33:57 PM
Author: RockDoc

If a shipper isn't providing some sort of 'coverage' ( Insurance, liability, responsibility etc) what is the benefit of making a value declaration, and why should the sender be charged additionally?

You keep wanting the use the words "coverage" and "liability" interchangably, and in this instance, they are simply not the same thing.

If you make a value declaration, the seller agrees to be liable for more than the normal $100. That's the benefit to the customer.....the shipper AGREES that they will be liable for the declared value (instead of capping the liability at $100) IF the carrier is proven responsible for the loss/damage. In exchange for agreeing to this higher limit of liability, you pay additional charges. Liability only comes into play, though, if they are found to be at fault for the damage. I just don't know how to explain this any more clearly....they are not the same thing. Coverage and liability in this instance are not the same.

Maybe it will make more sense to you this way:

IF there is loss or damage, AND loss/damaged is not the fault of the freight company: we will not pay the claim, whether it's declared value or not. We are only going to pay a claim if we are found to be at fault. That proof will come from shipping documents (bill of lading/delivery receipt).

IF there is loss or damage, AND loss/damaged is the fault of the freight company, AND you have declared a high value: we will pay more than $100.

IF there is loss or damage, AND loss/damaged is the fault of the freight company AND you have not declared value: we will pay up to $100.

Date: 4/8/2005 3:33:57 PM
Author: RockDoc

Certainly one would think that if third party providers of the insurance we purchase for shipping packages, doesn't want an open disclosure of the value, why shouldn't we as senders follow their precedent.

RockDoc, you should follow whatever precedent you are comfortable with. I'm not saying they should or shouldn't declare value. I've simply been explaining the difference/possible benefit of declaring value and how that differs from insurance coverage.

Keep in mind that your position and Robin's position are different from that of consumers. You folks have third-party insurers, so you don't have to worry about declared value. Consumers are in a much different position, and it may or may not be a good choice for them to declare value. Again, this is why most CONSUMERS ship via USPS.....because they actually "insure" a package and claim so in their terms.

Date: 4/8/2005 3:33:57 PM
Author: RockDoc
As to liability, of who's responsible for the damage, R/T has photos do support that the machine was in good condition, and only required specific calibration. I am sure there is a email/paper trail documenting this between them and OGI.

I'm not disputing any of that information, but you are again WAY oversimplifying this.

I'm not guessing at this, RockD....I worked in the freight industry for more than 10 years. I can ASSURE you of the process. What ANY freight carrier looks to in evaluating a claim of loss/damage is the bill of lading (was it signed for with any exceptions) and the delivery receipt (was it signed for with any exceptions). Those are the LEGAL documents of tender. The paper trail between OGI and anyone is COMPLETELY irrelevant. It's the paper trail with the carrier that matters.

It doesn't matter what the condition of the item was two days, two hours, or two minutes before it was packaged and given to the carrier. It only matters what condition it was in at the moment in time the carrier accepted it. Similarly, it doesn't matter what condition it's in two minutes, two hours, or two days after the driver delivers it.....it only matters what condition it was in at the moment in time the carrier delivered it and the receiver signed for it.

If a shipment is accepted by a freight carrier without any exceptions (no damage noted), and it's delivered with exception (the receiver signs for it noting damage), it's then CLEAR the damage occurred in transit, and liability is CLEARLY on the shipping company. If the damage isn't noted on either end, then the damage could have occurred prior to the shipment (customer sent a broken item in a new box) or after delivery (receiving dropped it after receiving it).

This really isn't much different than jewelry stores. If I purchase a stone from you and subsequently call you two minutes, two hours, two days after the fact saying "this diamond is chipped", it cannot be conclusively proved that the damage existed before I left your store (your fault) or after (my fault).

I don't have any opinion as to what alternatives existed to shipping the machine back - that's outside my area of knowledge. My point was simply to explain that folks are confusing liability with coverage, and I hoped to help make the distinction between the two. They are related, but NOT THE SAME.

 

[MissAva]

Has this been taken care of yet?

 

[claimsjeff]

If there are any specific shipping questions that I can help answer please let me know. I am "unfortunately" fairly versed on shipping losses for all of the above mentioned carriers.
Thanks
Jeff Mills
Jewelers Mutual Insurance Co.