The evolution of transportation consultants

By William J. Augello Esq. -- Logistics Management, 7/1/1999

The 20th century has seen many a transportation-related industry or profession experience a sea change, but perhaps none has undergone as much change as has the transportation consulting profession.

The first "traffic consultants" were primarily railroad freight-bill auditors who searched for and filed overcharge and loss-and-damage claims. They also assisted shippers with rate studies, product classifications, routing guides, demurrage claims, and other rail-oriented problems. In addition, they compiled tariffs for filing with the Interstate Commerce Commission (ICC) and state regulatory agencies, testified as experts before those agencies, and provided tariff-watching and other related services.

The development of interstate trucking allowed them to broaden their field to include trucking rates and product classification, carrier selection, routing guides, pre-payment auditing, and so forth.

More recently, since the ICC was eliminated, carriers have had more freedom to change their tariffs without the knowledge or consent of their customers. In the absence of a federal government regulatory agency, many unsophisticated shippers are forced to seek assistance from transportation consultants when negotiating rates, discounts, classification ratings, bills of lading, and contract terms. Transportation consultants thus have new reasons for offering their wide range of services to the shipping public, particularly to smaller, less-sophisticated shippers.

Today, some of the more technically oriented consultants are even developing and marketing their own logistics software packages. Many also are becoming non-asset-based "third-party logistics providers," offering to assume responsibility for managing all of a shipper's logistics activities. These independent consultants can offer unbiased advice on carrier selection, rates and discounts, liability levels, contract terms, site selection, and more--and they have no potential conflict of interest.

So-called "asset-based third-party logistics providers," on the other hand, are presumed to have a bias toward using their affiliated carriers, including their rules tariffs. These tariffs generally contain provisions that are not favorable to shippers, such as lower liability limits, loss-of-discount penalty rules for late payments, density surcharges, and numerous accessorial charges and penalties.

In retrospect, the old style of traffic consultant (or "rate shark," as carriers referred to them due to their zeal in pursuing rating errors) has evolved into a highly technical professional with expertise and experience in shipping under the current regulatory environment. It is no wonder that many shippers and receivers, both large and small, use transportation consultants for some or all of their transportation and logistics requirements.

Shippers who wish to locate a consultant who is trained to protect shippers' interests will find the Transportation Consumer Protection Council's Directory of Membership to be a useful guide. For a free copy of the directory, call TCPC at (516) 549-8988.

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.