CLAIMS PANEL
Friday, October 12, 2012
8:30 am – 10:30 am
MARGARET WILKEN
Vice Chair, IAM Executive Committee
Stevens Forwarders, Inc.
TYLER SMITH
Senior Manager, Claims & Quality
Assurance
Government Logistics NV
Proposed
Mold Business Rules
Tyler L. Smith
Senior Manager
Claims and Quality Assurance
Government Logistics N.V.
SDDC Subcommittee on Mold
• Formed in Feburary 2012.
• Military Panel members are from SDDC, AMC,
MCO Chiefs/Deputies, Transcom, Army, Air
Force, Navy and Marine Corps Transportation
Commands, various PPSO’s.
• Industry Reps, Tyler Smith (Government
Logistics), Kevin Spealman (National Van Lines),
Sandra Maier (Jet Forwarding)
Why New Business Rules?
• Originally the Military Transportation Commands
felt that Industry wasn't’t doing enough to
prevent mold in shipments.
• Marine Corps HQ had led the quest for changes
primarily due to a sudden increase in mold
damaged shipments.
How Mold Damage is Occurring
• Code T and J being allowed to sit on uncovered Tarmacs
in severe inclement weather for extended time periods.
• Shipments coming out of areas with known High
Humidity and mold problems (Guam, Okinawa, Japan,
Korea etc)
• Service Members living in Government Owned Quarters,
identified as being sub-standard with mold problems.
• Inherent Vice: No water penetration into containers.
Proposed Changes
• Advance Payments to mitigate shipments such
as Code T/J.
• Transportation will send QC to physically inspect
the contents of containers that appear to be
contaminated, if QC does not come out, TSP will
be absolved from mitigating the damages.
• If PPSO orders testing for Mold, and no Mold is
present, PPSO will pay for the testing.
Proposed Changes (Cont.)
• Customer may refuse items remediated, but will
only receive the costs TSP paid or would pay to
remediate the item and not FRV.
• On shipments where the TSP is relieved of
liability “Code T/J”, “Acts of God”, all additional
labor, remediation costs, storage, handling, and
multiple transport costs will be reimbursed to the
TSP.
Code T/J Water Damages
• Work with your Port Agent
– AMC (Airlift Mobility Command) will generally not
allow Inspections at the Military Terminal.
– Port Agent when breaking down the pallets, must note
if any shipping containers are wet or were once wet
– Take pictures!
Prepare a report!
– Port Agent must send the report and pictures to a
POC at the AMC Terminal.
– Send Pictures and report to the TSP.
– Deny Liability if the Port Agent notes water damages
and reports it to AMC.
Code T/J Shipments
• Tim Helenthal of National Van Lines is
working with NDTA on the issues with
Code T/J Shipments.
• Please send him pictures and reports.
• tim.helenthal@nationalvanlines.com
SALVAGE RIGHTS
Salvage Rights
• If a TSP pays FRV for an item, they have
an absolute right to claim the item as
Salvage
• Since the beginning of FRV, the MOU on
Salvage Rights has been misunderstood
and misapplied by both MCO’s and
TSP’s.
FRV Business Rules
• To the extent not prohibited by law or
agreement, the TSP is entitled to take
possession of and sell for salvage any damaged
item on which it has paid either the depreciated
or FRV value.
• TSP has the right to claim salvage NLT 30 days
after receipt of a complete claim from either the
owner or MCO.
FRV Business Rules
• TSP agrees not to claim salvage when the
“depreciated” value of all salvageable
items is less than $100 or individually $50.
• When the customer refuses to allow the
TSP to claim salvage or disposes of the
item, the TSP will be credited 25% of the
depreciated value.
Salvage Rights and FRV
• The Business Rules on salvage, and the 400NG
language clearly states “the TSP is entitled to all
items on which it has paid, or agrees to pay, a
claim for the total depreciated or full
replacement value of the items.
• The 25% rule was only to go into effect if the
TSP was “unable to exercise its salvage rights
due to the “disposal of an item(s) by the military
member” – meaning that if the member still had
it – the TSP had an absolute right to the item.
Salvage Rights and FRV
• The original MOU was sort of a remedy of Last
Resort for those situations where the TSP tried
to collect items for salvage, could not obtain the
member's cooperation, the TSP would take 25%
off when paying back the MCO on the Demand
as per the MOU.
• MCO’s have used the MOU on salvage in
allowing Service Members to keep items with
sentimental value which was never the intent of
the MOU.
Salvage Rights and FRV
• Negotiations are ongoing between
Industry and MCO’s concerning salvage
rights.
• There should be compromise between
Industry and the MCO’s when items of
sentimental value are involved.
Salvage Overseas
• Salvage overseas presents difficulties
• Military HHG’s are usually imported duty and
tax free in to the Host Nation.
• Salvage Laws vary from country to country.
Salvage Overseas (Cont.)
• EUROPE• Germany- If a TSP wants to “salvage” an item, it
becomes complicated.
• If the TSP wants to resell the item or “donate” it
to a charity, the transaction must be reported to
the German Zoll Amt (Customs). The Zoll Amt
determines a value, and the TSP must pay a
19% VAT based on the Zoll Amts value prior to
being able to sell or give the item away.
Salvage Overseas (Cont.)
• Italy, Spain, Netherlands, England, all have
different rules, it pays to understand what your
rights are before attempting to exercise your
right to salvage.
• Forget Turkey, no salvage will occur! Bases
belong to the Turks and are controlled by them.
Nothing goes on or off the base without the
Turkish Military’s approval.
Questions ?
Tyler L. Smith
Government Logistics N.V.
tylers@govlog.be
KEVIN SPEALMAN
Vice President & General Manager
National Claims Services
Claims Panel
Inherent Vice
Damage does happen during the move, but TSP is not liable
•
There is no single agreed upon definition of inherent vice.
•
All definitions include a provision that the TSP must show that they were free
from negligence.
•
Example of an improper denial would include a TSP that automatically denies
all damaged particle board furniture.
•
Example of a stronger denial could include wine that froze during a shipment.
We recently had a case like this, and factors included the TSP’s inability to
refuse to ship wine on a government move, the temperatures being subfreezing for several consecutive days, and the fact that no amount of padding
or wrapping could have kept the wine from freezing in those temperatures.
Claims Panel
Inherent Vice
Mold Problems and inherent vice – shipments from Okinawa
•
In addition to the more publicized mold problems on code 5/T shipments, we
also had some problems with shipments originating from Okinawa.
•
In many cases, no mold was noticeable at origin, but existed at
destination – so unlike the code 5/T shipments, the mold did apparently
develop while shipment was in the care of the TSP
•
Elevated problems from extremely humid climates with high levels of
mold in base housing.
•
Nothing that the TSP could have reasonably done to prevent the
problems. Shipping containers are the perfect environment for mold
growth (dark, poor air circulation).
Claims Panel
Inherent Vice
Mold – a known problem in Okinawa
Claims Panel
Inherent Vice
Mold Problems – shipments from Okinawa
•
We need an agreed upon, specific set of criteria to protect the TSP community
from potentially enormous expenditures for claims and mold mitigation costs,
on International shipments that develop mold en route, through no fault of the
TSP
•
Criteria could include documentation showing no signs of water ingress,
weather reports showing no rain during pick up or delivery, signed statements,
etc.
•
It is ultimately in everybody’s best interest to ensure that TSP’s have some
protection from astronomical expenses for damages completely beyond their
ability to prevent.
Claims Panel
High Value/High Risk Forms
Failure to properly utilize HV/HR Forms is hurting some TSP’s
•
There is a failure to distinguish between High Value and High Risk
•
Make it agent’s responsibility at packing to ensure inclusion of high risk items
•
Use numbered security seals
•
Items must go on both the regular inventory and the HV/HR
•
Forms must be signed at destination, AND each item initialed in right hand
column, indicating that the items were unpacked, and were verified as received
by the customer.
BRETT COAKLEY
Attorney-Advisor
U.S. Air Force Claims Service Center
VIRGINIA EILMUS
U.S. Navy Military Claims Office
STEVEN R. KELLY
Chief of Personnel Claims Branch
U.S. Army Military Claims Office
CLAIMS PANEL
Friday, October 12, 2012
8:30 am – 10:30 am