Overcoming Contractual Challenges in International Freight Logistics

by | Jan 30, 2024

Client Profile

At Claims Trans, we recently represented a small, yet resilient Bulgarian haulier company engaged in transporting goods throughout Western Europe. Their experience is emblematic of a broader trend where smaller logistics firms are often at a contractual disadvantage against larger counterparts. Our expertise in such cases was particularly relevant in 2023, handling multiple similar disputes effectively.

The Challenge

Our client entered into an exclusive agreement with a major German logistics company. However, the partnership encountered significant disruptions:

Unilateral Contract Alterations: Without our client’s consent, the German company drastically reduced the payment rates, severely affecting our client’s revenue.

Operational Hurdles: A crucial vehicle breakdown within our client’s fleet impeded their service provision.

Compounding these challenges, our client was compelled to terminate the contract. This action, however, led to punitive measures from the German firm, imposing penalties exceeding 10,000 EUR, with 6800.00 EUR attributed solely to the non-availability of the broken truck.

Our Intervention

Recognizing the injustice, Claims Trans undertook a comprehensive legal analysis. Despite our primary specialization in CMR cargo claims, our legal team is adept at offering stellar protection across various jurisdictions. In this case, we focused on the German Civil Code (BGB):

Article 275 of the BGB: We contended that the imposition of penalties for the inoperable truck was unlawful, as it was impossible for our client to fulfill these specific obligations.

Articles 313 & 314 of the BGB: The unilateral changes in payment terms warranted our client’s right to immediate contract termination, invalidating subsequent penalty claims.

Negotiation Strategy

Confronted with a large German logistics firm’s reluctance and contractual rigidity, our approach was multifaceted:

Persistent Advocacy: Twice-a-week communications to maintain pressure and visibility.

Tactical Escalation: Involving senior management and utilizing whistleblower channels to intensify scrutiny.

Unwavering Legal Stance: Repeatedly asserting our solid legal argumentation against dismissive tactics.

Settlement Adaptability: Demonstrating flexibility in negotiations to secure the best possible outcome for our client.

Impact and Lessons Learned

Our determined efforts culminated in a successful settlement, significantly reducing the penalty by over 70% and securing immediate payment release to our client, turning a potential loss into a gain of over 5000.00 EUR. Notably, even after accounting for our service fees, our client emerged with a net profit, illustrating the tangible value of expert legal intervention in such scenarios.

This case exemplifies a crucial lesson for smaller logistics companies: With specialized legal support, they can confidently challenge larger companies and protect their commercial interests. It underscores the power of informed legal strategy and relentless advocacy in leveling the playing field in international logistics.

Conclusion

This case not only fortified our client’s financial position but also set an important industry precedent. At Claims Trans, we pride ourselves on our unique blend of legal expertise in transport law and comprehensive industry understanding. Our approach goes beyond mere legal advocacy; we strive to protect and champion our clients’ commercial interests, ensuring they navigate the complexities of international logistics contracts with confidence and success regardless of the jurisdiction.

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