Meaning
Statutory authority allows a transportation provider to retain possession of cargo as security for the payment of freight charges and related expenses. When a shipper fails to settle an invoice, the carrier tariff lien grants the operator the right to stop the delivery of the goods until the debt is cleared. This right is typically established through the published terms of service or the specific conditions of the bill of lading.
Payment Security
Financial protection for the carrier is the primary function of this legal instrument during international trade. Because a carrier tariff lien attaches directly to the physical goods, the transporter holds a superior position relative to other unsecured creditors of the shipper. This ensures that the costs of moving heavy battery components or raw materials are recovered before the cargo enters the local market.
Enforcement Procedure
Recovery of unpaid fees involves a series of formal notices followed by the potential sale of the retained assets. If the debt remains outstanding after a set period, the holder of the carrier tariff lien may auction the property to satisfy the lien amount and the storage costs incurred during the delay. Any surplus funds from the sale are generally returned to the original owner or the next lienholder in line.
This process requires strict adherence to local commercial codes to avoid claims of wrongful conversion.
Possession Right
Physical control over the shipment must be continuous for the legal claim to remain valid.
