Logisticians face new legal challenges in 1998

By William J Augello -- Logistics Management, 1/1/1998

Deregulation is widely believed by upper management to be the cure-all for transportation and logistics problems. In reality, however, deregulation has created its own set of problems that will require transportation/logistics professionals' attention during the new year. For example, consider the following controversies and legal proceedings on the transportation agenda:

* The controversy between shippers and truckers over the Uniform Straight Bill of Lading.

* The controversy over whether truckers may lawfully limit their liability for loss, damage, and delay without the shipper's written consent.

* The fundamental principle of common carrier liability; i.e. should bailees continue to be responsible for the full actual loss of and damage to goods while they are in their possession and control, or should carriers have a uniform limit on liability?

* Proposed fine-tuning of the ICC Termination Act to require truckers to inform shippers of their rates, rules, and liability terms before shipping.

* Proposed limitation of penalties for violation of carriers' credit terms; i.e., state usury law limits in lieu of loss-of-discount and other high penalties that are disproportionate to collection costs.

* The long-overdue report by the DOT on its Cargo Liability Study, which threatens to impose the European/International liability system on American shippers.

* The STB's investigation into the need for continued antitrust protection for Motor Carrier Rate Bureaus and the National Classification Committee.

* Proposed legislation to modify the Carriage of Goods By Sea Act by modernizing and increasing ocean carrier liability terms.

* Breaking the stalemate between shippers and carriers on a Cross Border Liability Treaty.

* Deregulation of the ocean cargo industry and sunsetting of the Federal Maritime Commission.

* Investigating the railroad industry to prevent a reoccurrence of the problems caused by the UP/SP merger.

* Revising and simplifying the identity of intermediaries to protect shippers against suits for freight charges previously paid to an intermediary and against unrecoverable loss and damage claims.

* Revising carrier liability laws to void limitations when a loss is caused by the carrier's gross negligence, willful misconduct, or a material, fundamental breach or conversion to its own use.

Unfortunately, shippers and receivers are not affected to the same degree by these problems, as larger shippers generally are more sophisticated in managing transportation than their smaller counterparts. Nevertheless, shipper organizations owe a duty to the entire shipping community to adopt policies and pursue affirmative-action programs that will protect all shippers, not just their members. If the transportation community is to succeed in resolving these pressing problems, upper management must comprehend the seriousness of these issues and sanction their employees' participation. These issues cannot be delegated to third parties, whose interests differ from shippers' and carriers' interests. Those parties directly affected must participate in efforts to reach equitable, practical solutions.

William J. Augello Esq. has represented shippers for 37 years. He also is the executive director of the Transportation Consumer Protection Council, an organization that is devoted to protecting shippers in all matters involving freight damage, loss, and other legal matters. He can be reached at (516) 261-0100 or via e-mail at augello@transportlaw.com.