Rick A. Steinberg, Esq.
Introduction
Are you a motor carrier who engages in intermodal equipment interchange with ocean carriers or railroads? Do you use someone else’s chassis or containers to do so? Are you a party to the Uniform Intermodal Interchange & Facilities Access Agreement (the “UIIA”)? Whether you are already a party to the UIIA or want to become a party, there is some information that you should know.
The UIIA is a standard industry contract between truckers, drayage companies or other motor carriers that use chassis, containers or other intermodal equipment (users), on the one part, and ocean carriers, rail carriers or leasing companies that provide such intermodal equipment (providers), on the other part. The UIIA covers liability and other issues related to the interchange of intermodal equipment, such as containers and chassis, between the parties.
The UIIA Program
The UIIA program is administered by the Intermodal Association of North America (“IANA”), which is a transportation trade association representing the combined interests of the intermodal freight industry. The UIIA is a standard interchange contract developed to promote intermodal productivity and operating efficiencies through the development of uniform industry processes and procedures governing the interchange of intermodal equipment between ocean carriers, railroads, equipment leasing companies and intermodal trucking companies. See www.uiia.org. A copy of the UIIA and an application to participate in the UIIA program are available at www.uiia.org.
By becoming a participating party to the UIIA, a motor carrier agrees that it will be bound by the provisions of the UIIA and any subsequent revisions thereto, which govern the interchange and use of equipment in intermodal interchange service. The equipment provider, generally an ocean carrier, rail carrier or leasing company, agrees that in its interchange activities with a motor carrier who is a signatory to the UIIA, the UIIA will be the only such agreement it will use, unless superseded in whole by a separate, bilateral, written equipment interchange agreement.
The UIIA requires that motor carriers maintain a US DOT Number and, if applicable, an active motor carrier operating authority number (MC Number). The UIIA also requires that a motor carrier have a current Standard Carrier Alpha Code (“SCAC”). The SCAC is utilized to identify motor carriers in the UIIA database and equipment provider databases. IANA does not handle issuance of SCAC codes. Issuance of SCAC codes is handled by the National Motor Freight Traffic Association (the “NMFTA”). Application for an SCAC can be made through the UIIA application process or directly to the NMFTA.
Benefits of the UIIA to Motor Carriers
The UIIA is utilized by 95% of the top 100 ocean carriers and all major railroads. Thus, participation in the UIIA makes it possible and easier for motor carriers to do business with rail carriers and ocean carriers. The UIIA also eliminates the need for motor carriers to sign separate interchange contracts with individual equipment providers. It also reduces the number of insurance certificates that must be filed.
Terms and Conditions of the UIIA
The UIIA contains provisions governing premises access; equipment interchange; equipment use; liability, indemnity and insurance; and, dispute resolution, among other things. The UIIA allocates respective responsibilities between users and providers of equipment regarding access to the premises of the other party for the purpose of interchanging intermodal transportation equipment and establishes the terms and conditions under which such intermodal equipment will be used.
The UIIA requires that motor carriers maintain both a commercial automobile insurance policy covering equipment and a general liability insurance policy, each with at least $1,000,000.00 of coverage per occurrence, and name the equipment provider as an additional insured on each policy.
The UIIA requires a motor carrier who uses intermodal equipment to defend, hold harmless and indemnify the equipment provider for any liability or damages incurred during the interchange period, even due to the equipment provider’s own negligence. See the UIIA, § F.4.[1] Thus, motor carriers should be aware that they could be found liable to the equipment provider for damages or indemnity, even if the equipment provider was itself negligent.
The UIIA also contains provisions regarding equipment condition and use. The UIIA allocates responsibility for equipment inspection, maintenance and repair between users and providers of equipment. The UIIA contains a warranty that, while the parties do not make any express or implied warranty as to the fitness of the equipment, they recognize and affirm their responsibilities under federal motor carrier safety regulations. The UIIA requires motor carriers to conduct a pre-trip inspection of certain items listed on Exhibit A to the UIIA prior to departure. Equipment controlled by the provider must have a valid FMCSA inspection sticker. Motor carriers must return the equipment to the provider in the same condition as when they left, except for reasonable wear and tear. Items that are the responsibility of the equipment owner or provider to repair or replace are listed in Exhibit B to the UIIA. Items that are the responsibility of the motor carrier to repair or replace are listed in Exhibit C to the UIIA.
The UIIA also includes an agreement to submit all disputes relating to maintenance, repair or per diem invoices for detention of containers or chassis between users and providers of equipment to binding arbitration. The arbitration process is administered exclusively by IANA. Arbitration procedure guidelines are contained in Exhibit D to the UIIA.
The UIIA requires execution of equipment interchange receipts. The UIIA entitles each party to receive a copy and/or an electronic receipt equivalent of the equipment interchange receipt without charge. Further, the UIIA provides that, if recorded images are taken at the time of interchange, damage will not be reported on in-gate or outage equipment interchange receipts. Rather, the words “damage is captured on recorded images” will be printed on the equipment interchange receipt. All such recorded images will be made available to each party for one year from interchange without charge.
The UIIA is effective between parties unless cancelled in writing upon mutual consent or upon thirty (30) days prior notice to the other party. A copy of any notice cancelling the UIIA must be provided to the President of IANA.
Interpretation of the UIIA
The validity, enforcement, construction and interpretation of the UIIA are governed by the laws of the State of Maryland, which is where IANA is located. This choice of law provision is generally upheld. Yang Ming Marine Transport Corporation v. Intermodal Cartage Co., Inc., 685 F. Supp.2d 771 (W.D. Tenn. 2010). But see, Elite Logistics Corp. v. MOL America, Inc., 2012 WL 2366397 (C.D. Cal. June 21, 2012) (rejecting view that Maryland had a significant relationship to a particular transaction governed by the UIIA just because IANA is based there).
Under Maryland law, the general rule, that a contract will not be construed to indemnify a person against his own negligence unless an intention to do so is expressed in those very words or other unequivocal terms, does not apply to an insurance contract; and, the UIIA has been found to be in essence an insurance contract. Yang Ming Marine Transport Corp., supra, at 788, citing Mass Transit Admin. v. CSX Transp., Inc., 708 A.2d 298 (Md. 1998)
Maryland also has a statute that specifically exempts the UIIA from an otherwise prevailing prohibition against receiving indemnity for a party’s own negligence, perhaps due to the lobbying influence of IANA on the Maryland legislature. See Md. Cts. & Jud. Proc. § 5-401 (2010).[2] Such a statute has been enacted in another state, however. See TENN. CODE ANN. § 65-15-108 (2008).[3]
In one case, a Texas state appellate court refused to apply Maryland law to a dispute involving the UIIA, and applied the Texas Transportation Code instead, which prohibits indemnification from motor carriers. CMA-CGM (America), Inc. v. Empire Truck Lines, Inc., 416 S.W.3d 495 (Tex. Ct. App. 2013) (court held that application of Maryland law pursuant to the UIIA’s choice-of-law provision would contravene the anti-indemnity policy expressed in a section of the Texas Transportation Code prohibiting indemnification from motor carriers).
The UIIA is arguably a contract of adhesion, since the participating ocean carriers, railroads and equipment leasing companies that utilize it require motor carriers to participate and adhere to it as a condition of doing business with the equipment provider. See CMA-CGM (America), Inc., supra, at 510, citing Elite Logistics Corp., supra, at * 3.
Revisions to the UIIA
The UIIA was developed by the Intermodal Interchange Executive Committee (the “IIEC”). All proceedings of the IIEC are considered privileged and confidential. This would include all documents and correspondence relating to administration of the UIIA and specific discussions of the IIEC in the course of administering the UIIA.
The IIEC has revised the UIIA many times since it was first developed. Revisions to the UIIA that became effective on June 8, 2015 relate, inter alia, to the definitions of a chassis and an equipment provider and the respective responsibilities of a provider of either chassis or containers only, rather than a provider of both. This change is due to the exit of many ocean container carriers from the business of providing chassis, leaving that role to companies like TRAC Intermodal and DCLI.
Conclusion
The UIIA is constantly being revised. Whether you are a motor carrier who uses interchange equipment or a provider of interchange equipment to motor carriers, it is important that you keep up with the continuous revisions to the UIIA.
To contact the author click on the email link here:
rs********@pr********.com
[1] “Motor Carrier agrees to defend, hold harmless and fully indemnify the Indemnitees (without regard to whether the Indemnitees’ liability is vicarious, implied in law, or as a result of the fault or negligence of the Indemnitees), against any and all claims, suits, loss, damage or liability, for bodily injury, death and/or property damage, including reasonable attorney fees and costs incurred in the defense against a claim or suit, or incurred because of the wrongful failure to defend against a claim or suit, or in enforcing subsection F.4 (collectively, the “Damages”), caused by or resulting from the Motor Carrier’s: use or maintenance of the Equipment during an Interchange Period; and/or presence on the Facility Operator’s premises.”
[2] The statute states in general that “[n]otwithstanding any other provision of law, a provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract that purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless, the promisee against liability for loss or damage resulting from the negligence or intentional acts or omissions of the promisee is against public policy and is void and unenforceable.” Md. Cts. & Jud. Proc. § 5-401(b)(2). However, there is an explicit and specific exception of the UIIA from the definition of “motor carrier transportation contract” in the statute, which states that: “2. ‘Motor carrier transportation contract’ does not include: A. The Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America, as amended by the Intermodal Interchange Executive Committee; or B. Other agreements providing for the interchange, use, or possession of intermodal chassis, containers, or other intermodal equipment.” Md. Cts. & Jud. Proc. § 5-401(b)(1)(iii).
[3] “(a) A covenant, promise, agreement or understanding in or in connection with or collateral to a motor carrier transportation contract purporting to indemnify the promisee against liability for damages resulting from the negligence of the promisee, the promisee’s agents or employees, or indemnitee, is against public policy and is void and unenforceable.
(b) Subsection (a) shall not apply to the Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America or other agreements providing for the interchange, use or possession of intermodal chassis, containers or other intermodal equipment.” TENN. CODE ANN. § 65-15-108 (2008).
Rick A. Steinberg, Esq.
Introduction
Are you a motor carrier who engages in intermodal equipment interchange with ocean carriers or railroads? Do you use someone else’s chassis or containers to do so? Are you a party to the Uniform Intermodal Interchange & Facilities Access Agreement (the “UIIA”)? Whether you are already a party to the UIIA or want to become a party, there is some information that you should know.
The UIIA is a standard industry contract between truckers, drayage companies or other motor carriers that use chassis, containers or other intermodal equipment (users), on the one part, and ocean carriers, rail carriers or leasing companies that provide such intermodal equipment (providers), on the other part. The UIIA covers liability and other issues related to the interchange of intermodal equipment, such as containers and chassis, between the parties.
The UIIA Program
The UIIA program is administered by the Intermodal Association of North America (“IANA”), which is a transportation trade association representing the combined interests of the intermodal freight industry. The UIIA is a standard interchange contract developed to promote intermodal productivity and operating efficiencies through the development of uniform industry processes and procedures governing the interchange of intermodal equipment between ocean carriers, railroads, equipment leasing companies and intermodal trucking companies. See www.uiia.org. A copy of the UIIA and an application to participate in the UIIA program are available at www.uiia.org.
By becoming a participating party to the UIIA, a motor carrier agrees that it will be bound by the provisions of the UIIA and any subsequent revisions thereto, which govern the interchange and use of equipment in intermodal interchange service. The equipment provider, generally an ocean carrier, rail carrier or leasing company, agrees that in its interchange activities with a motor carrier who is a signatory to the UIIA, the UIIA will be the only such agreement it will use, unless superseded in whole by a separate, bilateral, written equipment interchange agreement.
The UIIA requires that motor carriers maintain a US DOT Number and, if applicable, an active motor carrier operating authority number (MC Number). The UIIA also requires that a motor carrier have a current Standard Carrier Alpha Code (“SCAC”). The SCAC is utilized to identify motor carriers in the UIIA database and equipment provider databases. IANA does not handle issuance of SCAC codes. Issuance of SCAC codes is handled by the National Motor Freight Traffic Association (the “NMFTA”). Application for an SCAC can be made through the UIIA application process or directly to the NMFTA.
Benefits of the UIIA to Motor Carriers
The UIIA is utilized by 95% of the top 100 ocean carriers and all major railroads. Thus, participation in the UIIA makes it possible and easier for motor carriers to do business with rail carriers and ocean carriers. The UIIA also eliminates the need for motor carriers to sign separate interchange contracts with individual equipment providers. It also reduces the number of insurance certificates that must be filed.
Terms and Conditions of the UIIA
The UIIA contains provisions governing premises access; equipment interchange; equipment use; liability, indemnity and insurance; and, dispute resolution, among other things. The UIIA allocates respective responsibilities between users and providers of equipment regarding access to the premises of the other party for the purpose of interchanging intermodal transportation equipment and establishes the terms and conditions under which such intermodal equipment will be used.
The UIIA requires that motor carriers maintain both a commercial automobile insurance policy covering equipment and a general liability insurance policy, each with at least $1,000,000.00 of coverage per occurrence, and name the equipment provider as an additional insured on each policy.
The UIIA requires a motor carrier who uses intermodal equipment to defend, hold harmless and indemnify the equipment provider for any liability or damages incurred during the interchange period, even due to the equipment provider’s own negligence. See the UIIA, § F.4.[1] Thus, motor carriers should be aware that they could be found liable to the equipment provider for damages or indemnity, even if the equipment provider was itself negligent.
The UIIA also contains provisions regarding equipment condition and use. The UIIA allocates responsibility for equipment inspection, maintenance and repair between users and providers of equipment. The UIIA contains a warranty that, while the parties do not make any express or implied warranty as to the fitness of the equipment, they recognize and affirm their responsibilities under federal motor carrier safety regulations. The UIIA requires motor carriers to conduct a pre-trip inspection of certain items listed on Exhibit A to the UIIA prior to departure. Equipment controlled by the provider must have a valid FMCSA inspection sticker. Motor carriers must return the equipment to the provider in the same condition as when they left, except for reasonable wear and tear. Items that are the responsibility of the equipment owner or provider to repair or replace are listed in Exhibit B to the UIIA. Items that are the responsibility of the motor carrier to repair or replace are listed in Exhibit C to the UIIA.
The UIIA also includes an agreement to submit all disputes relating to maintenance, repair or per diem invoices for detention of containers or chassis between users and providers of equipment to binding arbitration. The arbitration process is administered exclusively by IANA. Arbitration procedure guidelines are contained in Exhibit D to the UIIA.
The UIIA requires execution of equipment interchange receipts. The UIIA entitles each party to receive a copy and/or an electronic receipt equivalent of the equipment interchange receipt without charge. Further, the UIIA provides that, if recorded images are taken at the time of interchange, damage will not be reported on in-gate or outage equipment interchange receipts. Rather, the words “damage is captured on recorded images” will be printed on the equipment interchange receipt. All such recorded images will be made available to each party for one year from interchange without charge.
The UIIA is effective between parties unless cancelled in writing upon mutual consent or upon thirty (30) days prior notice to the other party. A copy of any notice cancelling the UIIA must be provided to the President of IANA.
Interpretation of the UIIA
The validity, enforcement, construction and interpretation of the UIIA are governed by the laws of the State of Maryland, which is where IANA is located. This choice of law provision is generally upheld. Yang Ming Marine Transport Corporation v. Intermodal Cartage Co., Inc., 685 F. Supp.2d 771 (W.D. Tenn. 2010). But see, Elite Logistics Corp. v. MOL America, Inc., 2012 WL 2366397 (C.D. Cal. June 21, 2012) (rejecting view that Maryland had a significant relationship to a particular transaction governed by the UIIA just because IANA is based there).
Under Maryland law, the general rule, that a contract will not be construed to indemnify a person against his own negligence unless an intention to do so is expressed in those very words or other unequivocal terms, does not apply to an insurance contract; and, the UIIA has been found to be in essence an insurance contract. Yang Ming Marine Transport Corp., supra, at 788, citing Mass Transit Admin. v. CSX Transp., Inc., 708 A.2d 298 (Md. 1998)
Maryland also has a statute that specifically exempts the UIIA from an otherwise prevailing prohibition against receiving indemnity for a party’s own negligence, perhaps due to the lobbying influence of IANA on the Maryland legislature. See Md. Cts. & Jud. Proc. § 5-401 (2010).[2] Such a statute has been enacted in another state, however. See TENN. CODE ANN. § 65-15-108 (2008).[3]
In one case, a Texas state appellate court refused to apply Maryland law to a dispute involving the UIIA, and applied the Texas Transportation Code instead, which prohibits indemnification from motor carriers. CMA-CGM (America), Inc. v. Empire Truck Lines, Inc., 416 S.W.3d 495 (Tex. Ct. App. 2013) (court held that application of Maryland law pursuant to the UIIA’s choice-of-law provision would contravene the anti-indemnity policy expressed in a section of the Texas Transportation Code prohibiting indemnification from motor carriers).
The UIIA is arguably a contract of adhesion, since the participating ocean carriers, railroads and equipment leasing companies that utilize it require motor carriers to participate and adhere to it as a condition of doing business with the equipment provider. See CMA-CGM (America), Inc., supra, at 510, citing Elite Logistics Corp., supra, at * 3.
Revisions to the UIIA
The UIIA was developed by the Intermodal Interchange Executive Committee (the “IIEC”). All proceedings of the IIEC are considered privileged and confidential. This would include all documents and correspondence relating to administration of the UIIA and specific discussions of the IIEC in the course of administering the UIIA.
The IIEC has revised the UIIA many times since it was first developed. Revisions to the UIIA that became effective on June 8, 2015 relate, inter alia, to the definitions of a chassis and an equipment provider and the respective responsibilities of a provider of either chassis or containers only, rather than a provider of both. This change is due to the exit of many ocean container carriers from the business of providing chassis, leaving that role to companies like TRAC Intermodal and DCLI.
Conclusion
The UIIA is constantly being revised. Whether you are a motor carrier who uses interchange equipment or a provider of interchange equipment to motor carriers, it is important that you keep up with the continuous revisions to the UIIA.
To contact the author click on the email link here:
rs********@pr********.com
[1] “Motor Carrier agrees to defend, hold harmless and fully indemnify the Indemnitees (without regard to whether the Indemnitees’ liability is vicarious, implied in law, or as a result of the fault or negligence of the Indemnitees), against any and all claims, suits, loss, damage or liability, for bodily injury, death and/or property damage, including reasonable attorney fees and costs incurred in the defense against a claim or suit, or incurred because of the wrongful failure to defend against a claim or suit, or in enforcing subsection F.4 (collectively, the “Damages”), caused by or resulting from the Motor Carrier’s: use or maintenance of the Equipment during an Interchange Period; and/or presence on the Facility Operator’s premises.”
[2] The statute states in general that “[n]otwithstanding any other provision of law, a provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract that purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless, the promisee against liability for loss or damage resulting from the negligence or intentional acts or omissions of the promisee is against public policy and is void and unenforceable.” Md. Cts. & Jud. Proc. § 5-401(b)(2). However, there is an explicit and specific exception of the UIIA from the definition of “motor carrier transportation contract” in the statute, which states that: “2. ‘Motor carrier transportation contract’ does not include: A. The Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America, as amended by the Intermodal Interchange Executive Committee; or B. Other agreements providing for the interchange, use, or possession of intermodal chassis, containers, or other intermodal equipment.” Md. Cts. & Jud. Proc. § 5-401(b)(1)(iii).
[3] “(a) A covenant, promise, agreement or understanding in or in connection with or collateral to a motor carrier transportation contract purporting to indemnify the promisee against liability for damages resulting from the negligence of the promisee, the promisee’s agents or employees, or indemnitee, is against public policy and is void and unenforceable.
(b) Subsection (a) shall not apply to the Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America or other agreements providing for the interchange, use or possession of intermodal chassis, containers or other intermodal equipment.” TENN. CODE ANN. § 65-15-108 (2008).
