We still need continuing education in transportation

By William J Augello -- Logistics Management, 6/1/1998

The trend toward downsizing and outsourcing corporate transportation and logistics functions in the United States is having a direct impact on educational programs for these professions, leading educational institutions and organizations to reduce the number of seminars they offer in response to declining registrations.

Apparently, upper management has misread the sunsetting of the ICC as meaning that they no longer need transportation professionals on staff, or that they no longer need education or training. Some also believe that contracting, now the most prevalent method of shipping goods, eliminates the need for a transportation staff. On the contrary, contracting requires careful drafting, negotiating, and constant administration by knowledgeable personnel. Some also have outsourced transportation or logistics functions to third-party logistics providers, many of which are affiliated with carriers.

Managers who have adopted these policies may come to regret the loss of in-house expertise. Our experience since the demise of the ICC on Jan. 1, 1996, clearly indicates that American shippers and receivers need to be re-educated and retrained in transportation and logistics, not downsized.

During the last two years, nearly every motor carrier has seized the opportunity to insert liability limitations in its tariffs in a manner that the ICC would not have permitted. These limitations will plague shippers if their goods are lost or damaged in transit. Their claims may be disallowed, reduced to the limit stated in the tariff (sometimes as low as 10 cents per pound), or reduced by the same percentage as the discount governing the applicable rate.

Carriers now claim that they no longer need to obtain the shipper's written consent to these limitations and that they need not disclose the rules or terms and conditions for transportation unless shippers request a copy of their tariffs before shipping.

Shipper organizations disagree. They insist that carriers still must obtain shippers' written consent before they may reduce their liability for the goods' full, actual value in return for a reduced rate.

Another source of conflict between carriers and shippers relates to the loss of negotiated discounts due to a shipper's late payment of freight charges. Such credit rules often are buried in carriers' unfiled tariffs and are rarely brought to shippers' attention during rate negotiations.

To understand how carriers' tariffs and bills of lading can cause these kinds of unrecoverable losses and unanticipated costs, shippers and receivers need continuing education. That's why upper management must allocate part of its annual budget for training and education for transportation and logistics personnel. This education also must be updated when the law for a particular mode is changed.

Corporate America must realize that our trade associations and educational institutions can only provide that education if the public supports them. An informed shipping public is in the nation's best interest, but it will require upper management's attention before that can be achieved.

William J. Augello Esq. has practiced transportation law for 46 years. He also is the executive director of the Transportation Consumer Protection Council, an organization that is devoted to protecting shippers and receivers in transportation matters, such as freight loss and damage, undercharges, and contracts. He can be reached at (520) 531-0203 or via e-mail at augello@transportlaw.com.