Claims
Released rates: how a carrier limits liability, and when it fails
The starting position under US interstate carriage is generous to the shipper: the carrier is liable for the actual loss. Almost every carrier moves away from that by agreement, and shippers accept the cheaper rate without registering what was traded for it. The interesting part is that the limitation is only effective if several things were done properly — and courts do check.
The default, and the exception
The Carmack Amendment sets the baseline. Liability is “for the actual loss or injury to the property caused by (A) the receiving carrier, (B) the delivering carrier, or (C) another carrier over whose line or route the property is transported”. Note who that reaches: a shipper does not have to identify which carrier in the chain caused the damage in order to have a claim.
The exception is the released rate. A carrier may “establish rates for the transportation of property (other than household goods) ... under which the liability of the carrier for such property is limited to a value established by written or electronic declaration of the shipper or by written agreement”. In exchange for that lower exposure, the shipper gets a lower rate. That is the whole bargain, and it is a real one — the problem is that it is frequently struck without the shipper noticing.
What a carrier must actually do
Courts interpreting Carmack have set out what a carrier has to establish before a limitation binds. In substance:
- Maintain a tariff.
- Give the shipper a reasonable opportunity to choose between two or more levels of liability.
- Obtain the shipper's agreement as to that choice.
- Issue a bill of lading before the shipment moves that reflects the agreement.
Point two is the one that decides most disputes. A choice requires alternatives. Where a shipper was never offered a higher level of liability at a higher rate, there was no choice to agree to, and a limitation resting on that agreement has nothing underneath it.
A reference to a tariff is not a limitation
This is where a great many bills of lading are weaker than the carrier assumes. In Natural Polymer International Corp. v. FedEx Freight, Inc., a court held that merely referencing a tariff in the bill of lading was not enough to limit liability. What was missing is instructive:
- The bill of lading used generic language about tariffs rather than specifically identifying the limitation relied on.
- The shipper had no prior dealings with the carrier and nothing suggested familiarity with the tariff.
- The rate charged did not show that different levels of liability had been negotiated.
- The court observed that “an antiquated reference to a sixty-seven page document did not ‘plainly refer’” to the cap being claimed.
The principle running through it: constructive knowledge is not enough. A shipper is not bound by a limitation merely because the document it could theoretically have found says so.
Two practical consequences, pointing in opposite directions. If you are the shipper, a limitation asserted against you may not hold, and it is worth examining rather than accepting at the adjuster's first letter. If you are arranging carriage for others, a limitation you are relying on may not hold either.
Declaring value is the other half
Where a released rate applies, declaring a higher value is how a shipper buys back the exposure. It is an election made before the shipment moves, in writing or electronically, and it changes the rate. Like every other limit-lifting mechanism, it is worthless applied afterward — the same structure as the special declaration of interest under the air convention and the declared value routes described in cargo liability limits.
Whether to declare is an economic question, not a paperwork one: compare the incremental rate against the value at risk and the cost of insuring it separately. Many shippers find cargo insurance the better instrument, which is a legitimate answer — but it should be an answer, not an omission.
What to check on your own lane
- Does the bill of lading or contract state a specific limitation, or just point at “applicable tariffs”?
- Were you offered a choice of liability levels, at different rates, in a form you can produce?
- Is the document that records that choice issued before the shipment moves?
- Does the declared value, if any, appear on the bill of lading and match what was agreed?
- Does the limitation language reference a tariff version that still exists and is reachable?
- For each lane, do you know the effective cap per shipment — and have you compared it to the value you routinely ship?
The deadlines are separate and just as unforgiving: a carrier may not provide a period of less than 9 months for filing a claim, nor less than 2 years for bringing a civil action. Those are floors, not the periods your contract necessarily gives you — see claim deadlines and delivery disputes and the freight claim process for the sequence.
This is a general explanation, not legal advice. Released rate practice is shaped by case law that continues to develop, and the contract in front of you decides any real dispute.
The evidence that survives the argument
A released rate argument is about documents that existed before the shipment moved, and a damage claim is about what happened during it. Cargovate's platform keeps one record across carriers and borders, so the movement half is established from a record rather than reconstructed once the limitation question is already being argued.
Last reviewed 2026-09-20