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Enhanced liability clauses in logistics contracts – functions, features and future

Ekwall, Daniel and Sternberg, Henrik LU (2014) CSCMP European Research Seminar In [Host publication title missing]
Abstract
This paper provides a detailed analysis and assessment of the use of enhanced liability (EL) clauses in logistics contracts. The expression “enhanced liability” refers to clauses in a contract that obligate one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and an understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own supply chain risks. The research approach is based on two pillars: firstly, a proposition on EL cause and effects is... (More)
This paper provides a detailed analysis and assessment of the use of enhanced liability (EL) clauses in logistics contracts. The expression “enhanced liability” refers to clauses in a contract that obligate one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and an understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own supply chain risks. The research approach is based on two pillars: firstly, a proposition on EL cause and effects is theoretically deducted from supply chain risk, freight transport and law literature; secondly, the results of 12 semi-structured interviews with managers working with contracts, claims and insurances managers in logistics and insurance firms in three countries. The interviews were structured in four major areas: history of EL, contractual negotiation process, effects of activated EL clauses, and future of EL clauses. The usage of enhanced liability clauses in contracts is increasing and the exact content of each is determined in the contractual negotiation process. Enhanced liability clauses are a risk redistribution tool within the supply chain that contributes to higher total cost for the entire supply chain. This paper introduces and discusses the enhanced liability clause in contracts as a risk allocation method and explains its limitations, providing both novel managerial insight and theory (Less)
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author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Risk management, Supply chain risk, Enhanced Liability, Freight forwarding, Logistics business strategy
in
[Host publication title missing]
editor
Wallenburg, Carl-Marcus and
pages
16 pages
publisher
WHU – Otto Beisheim School of Management
conference name
CSCMP European Research Seminar
language
English
LU publication?
yes
id
b1f64364-9a8f-4eae-b707-1c7d47788121 (old id 4689726)
date added to LUP
2014-09-30 14:23:07
date last changed
2016-04-16 08:54:30
@inproceedings{b1f64364-9a8f-4eae-b707-1c7d47788121,
  abstract     = {This paper provides a detailed analysis and assessment of the use of enhanced liability (EL) clauses in logistics contracts. The expression “enhanced liability” refers to clauses in a contract that obligate one of the partners to accept extended liability for future claims payments beyond normal standards of transport law, conventions or national standard terms and conditions for logistics service intermediaries, logistics service providers and carriers. This paper provides explanations and an understanding of how logistics business actors are using enhanced liability clauses in supplier contacts to reallocate their own supply chain risks. The research approach is based on two pillars: firstly, a proposition on EL cause and effects is theoretically deducted from supply chain risk, freight transport and law literature; secondly, the results of 12 semi-structured interviews with managers working with contracts, claims and insurances managers in logistics and insurance firms in three countries. The interviews were structured in four major areas: history of EL, contractual negotiation process, effects of activated EL clauses, and future of EL clauses. The usage of enhanced liability clauses in contracts is increasing and the exact content of each is determined in the contractual negotiation process. Enhanced liability clauses are a risk redistribution tool within the supply chain that contributes to higher total cost for the entire supply chain. This paper introduces and discusses the enhanced liability clause in contracts as a risk allocation method and explains its limitations, providing both novel managerial insight and theory},
  author       = {Ekwall, Daniel and Sternberg, Henrik},
  booktitle    = {[Host publication title missing]},
  editor       = {Wallenburg, Carl-Marcus},
  keyword      = {Risk management,Supply chain risk,Enhanced Liability,Freight forwarding,Logistics business strategy},
  language     = {eng},
  pages        = {16},
  publisher    = {WHU – Otto Beisheim School of Management},
  title        = {Enhanced liability clauses in logistics contracts – functions, features and future},
  year         = {2014},
}