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Warehouse Liability: Know Before You Stow!
As consumers continue to shift purchasing and consumption habits in the aftermath of the pandemic, manufacturers are increasingly reliant on third-party logistics and warehousing to ensure their products timely reach the market. The supply chain disruptions exacerbated by the COVID pandemic have manufacturers rethinking pure reliance on just-in-time delivery systems and considering retaining more "buffer stock' to avoid supply chain disruptions and resultant lost sales. In certain sectors, such as cold storage warehousing, shift in demand from fresh to frozen foods by consumers and restaurants in the wake of the pandemic have accelerated demand for warehouse storage space. With this increasing need to use third-party warehouses, manufacturers and distributors should take moment to refresh their understanding of warehousing law and liability.
Warehouse Receipts
In the warehousing industry, the warehouse receipt is ubiquitous to almost every transaction. As a result, they are often overlooked or taken for granted. Yet, they play an instrumental role in protecting the warehouse from liability and affirming the rules and procedures of the storage engagement. Before simply accepting a warehouse receipt, customers should familiarize themselves with purpose of a warehouse receipt and the implications of receiving one.
The Uniform Commercial Code (UCC) sets forth the scope of warehouse liability and the procedures for a warehouse to establish liability protections. In general, a warehouse is only liable for damages that arise from a failure to exercise the standard of care that a reasonable person would exercise in similar circumstances. If damages could not be avoided by the exercise of this duty of care, the warehouse will not be liable for such damages. This duty of care standard establishes the framework against which warehouse liability is determined.
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