Small Businessman's Guide to Shipping via Trucklines

The closing of the Interstate Commerce Commission (ICC) on January 1, 1996 virtually ended the federal government's regulation of the trucking industry. Although it gave shippers more freedom to negotiate with trucking companies, deregulation also creates opportunities for truckers to take advantage of small business concerns that lack sophistication in transportation

The Transportation Consumer Protection Council's suggested guidelines are as follows:

Rule 1: Before shipping, request the trucker (or freight broker or freight forwarder, in writing, to furnish a written copy of its proposed rates, charges and rules, including all extra charges. Look for limits on the carrier's liability for loss, damage and delay. (The law holds carriers liable for shippers' full actual loss unless the shipper agrees in writing to a lower liability in return for a lower rate.) If there is a limit on liability, such as $2.50 per pound, is it $2.50 per pound, "per package." or "per piece"? (If it is "per piece" or "per package," you will recover only that about times the weight of the piece lost!)

Rule 2: Carrier's Class Rates, which are the base rates before discounting, have been inflated to offset the widespread discounting which has resulted from increased competition created by the new laws. Therefore, every shipper should negotiate a discount.

Rule 3: Inform the carrier of the terms which are not acceptable to you and get the carrier's written agreement to modify those terms as desired. (See Examples of Truckers' Rules Adverse to Small Shippers below)

Rule 4: Determine whether your trucker has multiple base rates from which it is discounting, and if so, compare your net rates with others shipping the same or similar types of traffic in your area.

Rule 5: Type on all Bills of Lading, "This shipment is subject to an individually determined rate" to protect you from later claims for additional charges based on filed tariffs.

Rule 6: Check all freight bills immediately upon receipt, and notify carrier within 180 days of receipt if there are any errors.

Rule 7: Have your bills audited by a transportation consultant who is familiar with trucking to and from your area.

Rule 8: Preserve all correspondence with carriers regarding rates and rules and compare confirmation letters with your notes. Do not allow additions or deletions.

Rule 9: Do not agree to be "Subject to carrier's Rules Tariff No. 100, supplements thereto and reissues thereof," or "Series," as this will expose you to changes without advance notice.

Rule 10: Request your carrier in writing to advise you of any proposal to increase your agreed to rates, charges or liability terms at least 30 days beforehand.

Rule 11: When paying freight charges to an intermediary (anyone other than the motor carrier), be certain that you are protected against having to pay those charges to the carrier again in the event the intermediary fails to pay the carrier.

Rule 12: If you have filed a loss or damage claim on shipments between August 26, 1994 and December 31, 1995, any limitation of liability alleged to be in a carrier's unfiled tariff (such as $2.50 per pound) is void and of no affect unless you agreed to that limitation in writing on the Bill of Lading or requested a copy of the tariff which contained that limitation. If you did not specifically agree to a limit, you are entitled to payment of the full value of that shipment.

Examples of Truckers' Rules Adverse to Small Shippers

Loss of discount if freight charges not paid within the carrier's credit rules (which vary with each trucker).

Reduction of claims for loss, damage and delay by the same percentage discount applied to the rate on the claim shipment.

Subjecting all shipments to carrier's Rules Tariff No. 100 and applying those rules rather than rules agreed to in a separate letter.

Limiting recovery for loss, damage and delay claims to an amount lower than the actual value of your goods without your consent.

Requiring a notation on each Bill of Lading that you agree to limit the carrier's liability to a specific amount ($2.50 per pound) or you lose your discount.

Adding surcharges when your freight exceeds certain dimensions, or has a light density or fills the vehicle to its full visible capacity.

Canceling discounts when the carrier serves a point via a connecting carrier for its own operating convenience.

Canceling discounts on the basis of an alleged restriction on discount to "irregular route" points, claiming they served those points as "regular route" points.

Claiming they rendered service as a regulated motor carrier requiring payment of tariff rates rather than exempt freight forwarder rates originally billed and paid.

Assessing extra charges for inside deliveries, notification prior to delivery, redeliveries, single shipments, storage, diversions, stop-offs, tarping, cleaning, etc.

In summation, these new developments in transportation have been made possible by the sunsetting of the ICC and by Congress' permitting carriers to inform customers of rates and rules only on request. If you do not request a copy, your shipoments will be subject to the carrier's rules without your knowledge or consent.

The principal objectives, therefore are

1. To avoid secret liability limitations;
2. To avoid "undercharge" claims and suits by defunct carriers, their bandrupt trustees and auditors, and
3. To avoid additional charges for accessorial services not previously known or agreed to.

However, the new law give shippers a new freedom from carriers' filed tariffs which formerly bound every shipper to their terms even without a shipper's actual knowledge. It also gives shippers the right to negotiate contracts and to write the terms of their own Bill of Lading. No longer are shippers obligated to do business only to the terms of the National Motor Freight Classification or the Uniform Straight Bill of Lading.