The legal right a freight carrier has to retain cargo until the client has paid for the cargo's transport.
Carrier's Lien Details
The Chambers Dictionary defines 'lien' as 'a right to retain possession of another's property until the owner pays a debt or fulfills a contract.' A carrier's lien applies this principle to the transportation of goods and confers rights over these goods on the freight carrier.
Suppose an individual or business publicly available for hire for the transportation of goods has delivered goods to the agreed destination. In that case, the carrier has the right to keep possession of the goods until the freight charges and any other associated expenses have been paid. A private transporter, which is not available for hire by the general public, may operate under a private agreement with the shipper. In this case, the carrier's lien may not apply.
If a freight carrier exercises its right to the carrier's lien, it must take all reasonable measures to ensure that the cargo remains in its original condition. The freight carrier is responsible for any damage to the goods they could have avoided by exercising due care. However, any damage which results from the mere fact of retention is the responsibility of the shipper, not the carrier. An example of this would be the natural deterioration of fresh produce; when this occurs during a retention period, the carrier is not at fault.
Carrier's Lien Example
Westward Megastores sell everything from soft drinks to soft furnishings in their stores and rely on private carriers to deliver goods to keep their stores stocked. Westward is looking for new transport companies which can meet their strict demands. They have recently signed a contract with Cathy Trucking, which has, so far, completed fifty deliveries to various Westward centers. Cathy Trucking is a small business and was pleased to secure a contract with such an important client. However, Westward has proved slow in settling outstanding invoices, and Cathy Trucking is not in a position to be able to wait a long time for payment; Westward has not responded to demands for settlement.
Cathy Trucking has now been asked to collect two separate, full loads from a warehouse and deliver them to a Westward store on the outskirts of Chicago. One of their trucks will be carrying home computers; Cathy Trucking will load the other with fresh fruit. Reluctantly, Cathy Trucking decides that it will have to exercise its right to carrier's lien unless they are paid on delivery. Cathy Trucking collects the goods and takes them to Chicago.
The Chicago store claims that it has no authority to pay carriers as the central office always does this. The drivers, as instructed, refuse to unload their trucks and return the goods to Cathy Trucking's depot in St. Louis, where the goods are unloaded and stored. Unfortunately, during unloading, a forklift truck driver drops a pallet of computers. Meanwhile, the fresh fruit is no longer as fresh as it should be. The damage to the computers is the legal responsibility of Cathy Trucking because Westward can claim that Cathy Trucking did not take reasonable care of the cargo. The deterioration of the fruit is a natural process outside of Cathy Trucking's control; Westward Megastores must accept responsibility for the costs incurred due to its deterioration.