So – Do I Need a Licence to be a Courier?

In the UK there are is no special licence required to operate as a courier. You’ll need a full driving licence of course if you want to drive a van, car or motorbike. You could ride a motor bike on a provisional licence but you’d be limited to 125cc bikes which are of very limited use in the courier industry; you’ll also struggle to get proper courier insurance on a provisional licence.

Your normal full driving licence will allow you to drive vans up to 3,500 kg GVW (Gross Vehicle Weight – the maximum allowed loaded vehicle weight). This would include most large Sprinters/Transits/Ducatos etc but not the biggest 3,500kg+ models in the ranges – these larger vehicles are very rare in the courier industry though.

If you passed your Category B (normal car) test before 1st January 1997 you should also have Category C1 (vehicles up to 7.5 tonnes) entitlement and Category B+E (vehicle and trailer) entitlement. If you passed your test after 1st January 1997 you’ll need to take an extra test if you want to drive vehicles over 3,500kg or a van towing a trailer over 750kg.

If you intend to operate a vehicle over 3,500kg you’ll also need an Operator’s Licence (known as an ‘O Licence’) which is much to complicated an issue to cover here. See the Transport Office website for more details.

Depending on your circumstances you may need permission from the local council, your landlord or your freeholder to park a van at your house, these requirements are quite rare though.

Courier Insurance

If you’re just thinking about getting into the courier business your next step should be to consider insurance. Motor Insurance, Goods In Transit Insurance and Public Liability Insurance are a major start-up expense.

Motor insurance which covers you for the “carriage of goods for hire or reward” is essential – and is a legal requirement.

Goods In Transit insurance covers the goods you’re carrying against loss, theft or damage. This isn’t a legal requirement but it’s sensible and some customers, particularly other transport companies, will insist on you having it.

Public Liability insurance insures you against claims from customers or members of the public for damage or injury that might be caused by your actions. Examples of this would be dropping a box on someone’s foot or knocking a computer of someone’s desk while you’re delivering.

CMR stands for “Convention relative au contrat de transport international de marchandises par route” which translates as “Convention on the Contract for the International Carriage of Goods by Road”. It was devised by the United Nations Economic Commission for Europe and was brought into UK law by the Carriage of Goods by Road Act 1965.

When does CMR apply?

It applies to every contract for the carriage of goods by road in vehicles for reward, when the place of taking over of the goods and the place designated for delivery, as specified in the contract, are situated in two different countries, of which at least one is a contracting party to CMR.

The current contracting countries are: Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iran (Islamic Republic of), Ireland, Italy, Kazakhstan, Kyrgyzstan, Latvia, Lebanon, Lithuania, Luxembourg, Malta, Mongolia, Montenegro, Morocco, Netherlands, Norway, Poland, Portugal, Moldova, Romania, Russian Federation, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Tajikistan, The former Yugoslav Republic of Macedonia, Tunisia, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan.

It doesn’t apply:

(a) To movements between the United Kingdom, The Republic of Ireland, The Channel Islands and the Isle of Man;
(b) To carriage performed under the terms of any international postal convention;
(c) To funeral consignments;
(d) To furniture removal;
(e) To movement of your own goods.

What does it mean to me as a same day courier?

Surprisingly enough, given all the fuss that people make over it, it means very little to you. It simply provides a standardised set of Conditions, which you’re not permitted to contract out of, which replace your own Terms & Conditions (if any) when carrying out deliveries to which CMR applies.

The two main issues that concern same day couriers are paperwork and the issue of insuring for liability under CMR.

What about Liability and ‘CMR Insurance’

Under CMR your liability for loss or damage to a load is strictly limited to 8.33 SDRs (Standard Drawing Rights) per kilo, unless you’ve chosen to offer your customer a higher level of liability. That’s currently (11th July 2008) equal to £6.87 per kilo of damaged, lost or stolen goods, or the actual value – whichever is lower. While that’s a higher rate than standard FTA or RHA limits of liability (£1.30/kg) it’s still less than that offered by most couriers’ standard Terms & Conditions.

Despite what you may have been told ‘CMR Insurance’ is NOT compulsory by law, in fact there’s no such thing as CMR Insurance – it’s just Goods In Transit insurance that meets your liabilities under CMR. Since your liabilities under CMR are usually more limited than your liabilities under UK Common Law, or most couriers’ Terms & Conditions, then this issue of ‘CMR Insurance’ shouldn’t really exist for same day couriers; it’s only the ‘Territorial Limits’ of standard GIT cover that make it an issue.

Of course if you’re carrying out work for another transport company then they’ll probably consider that you have to have ‘CMR Insurance’ in order to protect their interests. You may also feel that your chances of theft or damage to your load are increased when travelling abroad, particularly during the often unavoidable overnight stops.

Paperwork – the ‘CMR Note’

Again, despite what you may have been told, it’s not compulsory to have a ‘CMR Note’ of the ‘standard’ design in a 4 part NCR set etc. However, the law does stipulate that certain details must appear on the consignment note and that observations & remarks should be entered in the appropriate places.

Given that foreign officials (and the consignee) will be more familiar with the standard design of CMR note it would probably be foolish not use it.

A downloadable 4 part CMR Note from the IRU Website is available through the link here http://www.deliver-it.biz/couriers/useful-sites-and-tools/ and guidance on completion is available at http://www.iru.org/index/en_services_cmr – although you’ll need to register to access it.

The full text of CMR is available at http://www.unece.org/trans/conventn/cmr_e.pdf and the Carriage of Goods by Road Act 1965 which enacts it in UK law is available at http://www.opsi.gov.uk/RevisedStatutes/Acts/ukpga/1965/cukpga_19650037_en_1

Unless you only ever carry goods under your own ‘Terms and Conditions’ or ‘Conditions of Carriage’, which you make available to your customers before you carry out any work for them then you could be wide open to a claim for unlimited damages from your customer or even from your customer’s customer.

Your Goods In Transit insurance might well cover you for £15,000, but what if the goods you’ve collected are worth far more than that? A consignment of computer chips or a pharmaceutical sample can be worth many times that and if it was lost, stolen or damaged while under your control you would be liable for the full value unless your Conditions limit your liability.

That’s not the worst of it though. Most couriers’ Conditions quite rightly disclaim any liability for consequential loss. Without this essential restriction to your liability your losses are potentially unlimited should a late, lost or damaged consignment cause your customer any financial loss due to your ‘negligent act’. A ‘negligent act’ could be as simple as you leaving goods in your vehicle overnight and them being stolen, being late for a delivery because your cambelt broke due to being overdue for replacement, subcontracting your delivery to a muppet or just sending a document by overnight delivery and it being misrouted.

In the absence of suitable Conditions the only defence that you may have against a claim is to be able to prove that your customer’s loss occurred through no negligence whatsoever on the part of you, your employees or your subcontractors. In practice this may mean a delay or loss caused by an ‘act of God’ (exceptionally severe and unexpected bad weather for example) or a catastrophic and entirely unpredictable delay on the motorway system  – for example if you collect something the day before for 0900 delivery to London then a 1 hour delay on the motorway at Luton would not excuse a late delivery because it should be anticipated. If the motorway was closed for 4 hours because of an accident then it may be a delay that you could show that you were not able to anticipate.

What does ‘consequential loss’ mean and isn’t it already covered by your Goods in Transit Policy? Consequential loss applies not to the value of the goods that you’re carrying but to the financial loss that may be suffered should they not be delivered according to the customer’s requirements. By way of example, imagine a simple job where you collect an envelope from your customer for delivery across town within 2 hours. You leave the envelope on your dashboard and it blows out of the window without you noticing and it’s lost forever.

With proper Conditions you may be liable for around £15 for the loss of the paper and the envelope and you probably won’t be able to charge your customer for the delivery. Without any Conditions your moment of inattention could mean that the multi-million pound property deal that your client was about to seal with the contract that you were carrying doesn’t go ahead and YOU are legally liable for their entire financial loss. You’re a sole trader – so if they claim their losses you lose everything, all your savings and all your possessions.

Maybe that scenario seems a bit far-fetched, so how about that custom-made machine part that you’ve just collected from a freight forwarder for delivery to a manufacturer? The production line’s been down for 3 days at a cost of £20,000 per hour. You ‘thought’ that you’d strapped the pallet down properly but you take a corner too fast, the pallet slides and damages the goods. That’s say £40,000 for the damage to the machine part (only £15,000 covered on your insurance) and a further 3 days at £20,000 per hour (a further £1.44 MILLION in costs) for the stopped line while a new part is manufactured and delivered.

Without proper Conditions you are liable for losses like these. The good news is that it’s very simple to avoid the risk of being held liable for this type of claim. If you’re a CX member you have the benefit of being able to use their “Model Terms and Conditions”. If you’re not a CX member then the FTA allows use of their “Model Conditions of Carriage” by non-members as long as their copyright is acknowledged.

In my (non legally trained) opinion, neither sets of Conditions are entirely appropriate to the same day courier industry, but as a stop-gap measure they are better than no conditions at all. I hope to be able to point you towards some more appropriate Conditions in the near future.

In the meantime your main challenge may be to ensure that you can show that your customers have had the opportunity to view whatever conditions you may have before entering into a contract with you. If there’s a clear link on every page of your website and you’ve confirmed that your new customer has visited your website then you should be on fairly firm ground. If you’ve already carried out a job for someone without giving them the opportunity of viewing your Conditions then you can protect yourself in the future by simply adding a notice to the first invoice that all future work carried out will be subject to your Conditions. It doesn’t protect you from liabilities incurred during the first job but if you draw their attention to your Conditions at every available opportunity then you should hopefully be protected against future claims.

‘ADR’ (Accord Européen Relatif au Transport International des Marchandises Dangereuses par Route) isn’t a law or a set of rules that’s binding on us, it’s an agreement that’s binds the ‘Contracting Parties’ (the countries that are party to the agreement) to pass laws which implement the requirements of ADR.

ADR is implemented in UK law by ‘The Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations 2004′ as amended. This is known as the Carriage Regulations. These govern ALL journeys in the UK carrying Dangerous Goods – whether it’s a domestic journey or part of an international journey. The difference is that enshrined in the UK law are certain exemptions/variances/derogations which are allowed for WITHIN THE TERMS OF ADR for domestic journeys.

The full scope of ADR is implemented within the UK by the Carriage Regulations, with the addition of some exemptions/changes which apply to domestic transport AND ARE PART OF ADR. Similarly the other Contracting Parties to the Agreement have their own exemptions/changes which apply to domestic transport only and which are part of ADR.

Without the Carriage Regulations there would be no UK law on the transport of Dangerous Goods and we could ignore the whole concept of ADR while we’re in the UK. Other countries also implement the requirements of ADR by passing their own domestic laws and we’re governed by them while we’re in that country.

In short, ADR applies as much to UK domestic journeys as it does to international journeys; it’s just that international journeys are governed by individual countries’ individual laws which implement ‘vanilla’ ADR while domestic jouirneys within those individual countries are governed by their own (still agreed within ADR) implementations of slightly varied rules.
As for CMR, which the thread was actually about, contrary to popular belief there is no legal requirement for ‘CMR insurance’ if you take goods abroad. In fact there’s no such thing as ‘CMR insurance’ – just insurance to cover your compulsory liability under CMR, which as Geoff quite rightly points out is about £7/kg unless your customer has contracted with you to provide a higher level of cover.

Most standard GIT policies exceed the requirements of CMR within the policy’s ‘Territorial Limits’ – which usually includes the whole British Isles, including the ROI. This can sometimes be extended, without any mention of CMR, to other EU (or at least Western European) countries at minimal cost.

The Green Card is only proof that you have the minimum inurance cover required to drive in the countries that are members of the scheme. Having Green Card cover doesn’t make any difference to whether your comprehensive insurance cover will operate as if you were in the UK – you’d need to check your policy documents for that.

I seem to remember that the standard policy from www.evaninsurance.co.uk covers you throughout Europe as if you were in the UK for no extra cost. I could be wrong though, or it might have changed.
 

Whether your insurer agrees that they’re not hazardous maybe another matter.

Personally I think that knowing the actual legal entity behind a business is far more important than knowing they’ve insured themselves.

I suspect that most insurance companies will decide that you’re not covered even for LQ packages unless you pay extra.
 

Nobody actually ‘needs’ public liability insurance, unlike employers’ liability it isn’t compulsory, but it’s exceptionally foolish not to have it – and that applies as much to owner-drivers as it does companies.