Watch those dates!

By William J. Augello Esq. -- Logistics Management, 9/1/1999

The frequent changes in transportation laws and regulations since 1980 have been a source of confusion in the transportation profession, particularly among shippers. That's because when a dispute arises, its resolution will depend on the laws in effect on the date of shipment. For example, a shipment that moved after Jan. 1, 1996, will be governed by the provisions of the Interstate Commerce Act as amended by the ICC Termination Act of 1995. A shipment that moved between Aug. 26, 1994, and Dec. 31, 1995, could be subject to the earlier provisions of the Trucking Industry Regulatory Reform Act of 1994 and the Negotiated Rates Act of 1993.

It is vital that all parties to transportation disputes, including their consultants and attorneys, know the dates these laws went into effect and understand the substantive changes in the statutes and regulations resulting therefrom.

When reading recent court decisions, it is painfully clear that some parties to transportation-related litigation either have not properly briefed their cases to the court or did not understand the significance of the changes in the laws governing the shipments in question. Some court decisions, for example, never mention the date of shipment. Others overlook major changes in transportation law, erroneously applying the "filed-rate doctrine" on shipments that moved after the Interstate Commerce Commission's tariff-filing requirements were repealed. See, for example, Imports, Etc.,Ltd. v. ABF Freight System, Inc., 162 F.3d 528 (8th Cir. 1998).

A different but equally important issue that has led to numerous disputes between shippers and carriers is whether or not a motor carrier may limit its liability without the shipper's written consent. Carriers contend that their bills of lading subject shippers to the terms and conditions of tariffs and freight classifications that contain "automatic" liability limitations and released-value rates. Shippers contend that they no longer are bound by these tariff limitations unless they specifically consent to them in writing on the bill of lading or in a contract, as provided by the Carmack Amendment.

In a deregulated environment, this issue must be examined based on principles of contract law. Many carrier bills of lading, for example, state that shipments are "subject to the classifications and tariffs in effect on the date of the issue of this Bill of Lading ..." or language to that effect. No specific tariffs or classifications, however, are identified on those bills of lading. How can a party be bound by a vague reference to an unidentified document? This situation leaves open the opportunity for the carrier to choose any one of the numerous tariffs and classifications in existence--after the fact. The point is that all parties should know, in advance, which terms and conditions will govern a contract of carriage. Vague and indeterminate references are an invitation to disputes and litigation.

Shippers can help protect themselves from these and similar problems by studying the texts published by the Transportation Consumer Protection Council, which explain each of the new transportation laws and how they can benefit or harm shippers. Their next step should be to use a shipper-friendly contract that anticipates all of the problems they may encounter in transportation and logistics today, such as loss-and-damage claims, undercharge claims, and loss-of-discount credit rules.

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.