The Land Transport Organization Act, also known as the LOTT, is the law that regulates the carriage of goods and passengers by road and rail.
It is approved by Royal Decree 1211/1990, dated September 28, 2016 in which it adapted the LOTT law with the European trade conditions to be able to follow its same code and be more operational and adapt to the needs of travelers.
The new LOTT law aims to improve competitiveness among companies in the sector and to optimize public transport services.
The reform adapts the LOTT law to the evolution of the current transport market to the one that existed since 1987, since all its articles were revised.
- Competitiveness among companies: Seeks to improve competitiveness among companies, providing more flexibility to operate in the road transportation market.
- Transparency in management: Greater transparency in the management of company data, since certain company information must be public so that it can be consulted at any time and by any other company that requires it.
- Avoid intrusion: Reinforce the fact of contracting and invoicing only to individuals or legal entities that have a transport permit. This measure is regulated with sanctions.
What changes have been made to the LOTT?
The amendments that have been made to the LOTT are as follows:
- Suppression of split and full loads, i.e., the shipper is responsible for loading and unloading the goods and is therefore responsible and liable for the load.
- System for stoppages: Carriers lose time and money for reasons beyond their control, so it has been regulated that for each hour of stoppage they will be charged €35.14 and the day will be charged at €351.40.
- Payment system: By law, it is the shipper who must pay the carrier unless there is a mutual and agreed upon agreement. The payment term is 30 days, unless a different term is agreed upon prior to shipment.
- The price of transportation can be modified according to changes in the price of fuel, since we are talking about a direct expense that affects the cost of transportation.
The LOTT is a law that undergoes constant changes, as it must evolve with the times and adapt to the needs of the sector.
What benefits does the LOTT offer?
As mentioned above, the LOTT is adapting to the needs of the transport sector. The benefits it offers for transportation services are as follows:
- Fixed prices established by the Government with maximum rates.
- School and worker transportation can be combined in order to cover school routes that were not previously covered.
I’m a transportation company, what can I consider regarding
the Land Transportation Planning Act?
For a transport company, it is advisable to consider the following:
- Annual Administration fee to bus companies with regular lines, which will increase their efficiency.
- 10-year limit to grant a public transport route operation.
- It will be possible to carry out all administrative formalities online and transport can be carried out with a single authorization instead of several.
What is LOTT insurance?
LOTT insurance is used exclusively for domestic road transport. These insurances protect the carrier’s contractual liability in case of any claim for damaged, deteriorated or lost goods during transportation.
Covers the carrier’s financial responsibility for loss or damage to merchandise, i.e., it covers everything that happens to the merchandise from the time it is picked up at the place of loading until it is delivered at destination.
Compensation is paid in accordance with the LOTT, which establishes the value per kg of goods according to the daily IPREM.
In the event that the carrier is responsible for loss or damage to the goods, the LOTT will not cover the damage and the insurance will not be applicable.
Benefits of purchasing Land Transportation Planning Act insurance
The advantages of taking out LOTT insurance are as follows:
- Reliability: Insurance that covers nationwide.
- Specialization: It is an exclusive insurance for land transportation of goods.
- Guarantee: Guarantees compensation in the event of a possible incident involving the carrier’s civil liability.
- Adaptability: The insurance is adaptable to the goods to be transported, that is to say, to the volume of cargo to be transported and to the specific needs of each transport.
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Macarena Álvarez Plaza Update: 03/11/2023 José Escudero Specialist in logística y transporte