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Background and Facts: Westinghouse contracted with Panalpina, a freight forwarder, to arrange for the transportation of an electric transformer from the manufacturer in Italy to
Background and Facts: Westinghouse contracted with Panalpina, a freight forwarder, to arrange for the transportation of an electric transformer from the manufacturer in Italy to 3M Corporation in Iowa. Panalpina stated to Westinghouse, \"est assured your shipment will receive door to door our close care and supervision\" Westinghouse paid Panalpina $21785.00 for its services. As was the industry custom, Panalpina did not issue a bill of lading for the shipment. The standard \"Terms & Conditions\" listed on the reverse side of its contract stated that Panalpina would use \"reasonable care\" in the selection of those who would actually carry or handle the goods. The terms also limited Panalpina's liability for losses to $50 per shipment and disclaimed liability for all consequential or special damages in excess of this amount. These were the same terms utilized in the prior ten year course of dealing involving over 1000 transactions between Westinghouse and Panalpina. Panalpina hired an Italian customs broker to coordinate the movement of the transformer through Italy. The Italian broker hired CSM, a local stevedore, to load the transformer aboard the ship for the voyage to the United States. Panalpina never inquired of CSM how transformer was lashed for the ocean voyage, nor did it supervise the endeavor. CSM improperly secured and lashed the transformer onto a \"at-rack\" container for shipment. During the ocean voyage, the ship encountered heavy seas and the transformer broke loose, crushing a laser-cutting machine owned by Prima. Prima sued the owner of the ship, Westinghouse, and Panalpina for damages to the laser. The district court held Panalpina liable, and Panalpina appealed. Decision: Judgment reversed for Panalpina. Panalpina was a freight forwarder hired by Westinghouse to arrange for transportation and other services. It was not a carrier and was not liable for the cargo during shipment. Freight forwarders must use due diligence and reasonable care in performing their functions. Panalpina was reasonable in its selection of CSM as stevedore to load the ship. Questions: a. Explain the difference between a carrier, a freight forwarder, and a NVOCC. b. How does their liability differ for damage or loss to goods
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