Carmack Amendment

Summary of Carmack Amendment

The common name for the carrier liability provisions of the Hepburn Act of 1906 (49 U.S.C. Sec. 20[11]) by which the Interstate Commerce Act was amended to restrict efforts by certain common carriers to limit their liability for loss and damage of merchandise in transit. The amendment provides that a carrier in interstate commerce shall be liable to the consignee or to another party entitled to recover:

for the full actual loss, damage or injury to such property caused by it or any such common carrier, railroad, or transportation company to which such property shall be delivered or over whose line or lines such property may pass within the United States or within an adjacent foreign country when transported on a through bill of lading, notwithstanding any limitation of liability or limitation of amount of recovery or representation or agreement as to value in any such contract, rule, regulation, or in any tariff filed with the Interstate Commerce Commission.

At the time of the enactment of the Carmack Amendment only rail carriers were subject to regulation by the Interstate Commerce Commission. With the subsequent extension of ICC authority to cover motor carriers and domestic freight forwarders, the provisions of the Carmack Amendment were expanded to embrace these carriers as well. The amendment has not, however, been statutorily extended to cover common carriers by air or water.

The Interstate Commerce Commission is empowered to authorize release valuation rates under which a shipper may elect to accept a lower freight rate for a given shipment in exchange for limited carrier liability.

Due to deregulation of motor and rail transportation, argument has arisen whether the Carmack Amendment is still valid.

(Main Author: William J. Miller)