The most common errors and omissions committed by carriers

By William J. Augello, Esq. -- Logistics Management, 8/1/1999

In the May issue of Logistics, we wrote about the most common errors and omissions committed by shippers and receivers of freight. This month, we take a look at some of the errors and omissions most commonly committed by carriers--errors that often result in additional, unexpected costs for shippers. All members of the transportation community can profit by reviewing these examples and adopting preventive measures in their operations.

Carriers often fail to:

- Inform shippers of the rules, accessorial charges, liability limits, and credit terms that will apply while negotiating rates and service.

- Correctly rate freight bills in accordance with contracts, rate agreements, and tariffs.

- Correctly classify freight in accordance with the National Freight Classification.

- Furnish a copy of their Rules Tariff promptly when the shipper requests it.

- Investigate a claim when they have a "clear" delivery receipt.

- Maintain a single, realistic base-rate structure for negotiating rates with all shippers.

- Acknowledge and pay claims in accordance with U.S. Department of Transportation (DOT) regulations.

- Employ certified claims professionals to process loss and damage claims.

- Retain the integrity of palletized, unitized shipments or pay resulting shortage claims.

- Acknowledge and pay overcharge and duplicate-payment claims as required by DOT regulations.

- Determine the value and other characteristics of freight when negotiating rates.

- Verify the identity and authenticity of "occasional" consignees before delivering freight.

- Require the proper type of payment for cash on delivery (C.O.D.) shipments.

- Notify customers of changes in liability and other tariff rules before they go into effect.

- Follow shippers' special instructions for handling and protecting freight.

In addition to addressing these errors and omissions, carriers may wish to reconsider some other practices that can result in costly disputes, claims, and litigation. These include:

- Stating in rate agreements and contracts that "The terms of a 'Standard Bill of Lading' shall apply." (There is no such document--the parties must agree on a specific bill of lading form.)

- Permitting drivers to break seals before delivery and then claiming they have a "clear seal record" so they can deny liability for a shortage.

- Incorporating rules tariffs in contracts and rate agreements by reference.

- Accepting shipments without checking whether the shipper has loaded and braced the cargo properly, and later alleging that damage was caused by the shipper's improper loading. (DOT's safety regulations require drivers to check loads before leaving a shipper's dock.)

- Using tactics such as denying claims and delaying payments in hopes of inducing a settlement by "wearing down" the claimant.

Editor's Note: Readers are invited to submit their own lists of other common errors and omissions committed by any participant in transportation arrangements. Send them to the writer by fax at (516) 549-8962.

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 (516) 549-8984 or via e-mail at augello@transportlaw.com.