End of the road for the NCC?

By Staff -- Logistics Management, 12/1/1998

The National Motor Freight Traffic Association (NMFTA), which publishes the National Motor Freight Classification, uses the alphabet to identify annual reissues of the publication. The latest issue, which took effect on Oct. 16, 1998, is "STB NMF 100-Y." Only one more letter--"Z"--is left in this sequence. The National Classification Committee (NCC), which administers the tariff, though, may not have to worry about how to identify future tariff reissues if the Surface Transportation Board (STB) rules that the classification system has outlived its usefulness and repeals the committee's antitrust immunity.

Congress mandated that the STB decide whether antitrust immunity should continue for the NMFTA, an affiliate of the American Trucking Associations. The board is expected to make that decision by the end of this month. Shippers generally oppose continuation of antitrust immunity for such carrier-controlled rate bureaus. Carriers, on the other hand, support continuation of the classification system.

Putting aside the issue of job security for the dedicated professionals who run the classification system, one must give serious thought to whether the transportation community needs to purchase a 700-page encyclopedia of commodity descriptions every 12 months, when relatively few items actually are changed.

The obvious solution would be for motor carriers and shippers to preserve the last issue of the classification (hopefully, NMFC 100-Z) and incorporate it by reference into all rate agreements and contracts. When new products are introduced, the shipper could readily negotiate class ratings for them with its carriers. This would save both carriers and shippers the millions of dollars they spend each year on annual subscriptions to the NMFC. The shipping public no longer would be subjected to continual proposals to increase classification ratings.

Packaging rules, meanwhile, would be preserved in the last issue of the classification; new packages and packaging specifications could readily be incorporated into rate agreements. As more shippers adopt the recently added "performance test" packaging specifications, the need for approval of specific packages eventually should disappear.

Today, when almost all truck rates are negotiated by individual shippers and carriers, either through contracts or through rate agreements, collective discussion of class ratings and other matters no longer is necessary or desirable. The U.S. Department of Transportation, which referred to the classification system as "a relic of the ICC" in its August 1998 report on cargo liability, has since 1995 recommended repeal of motor-carrier antitrust immunity. In my opinion, all practical, logical indicators point toward ending the National Motor Freight Classification publication with the current issue (100-Y), or at least when the alphabet is exhausted, and then using it only as a point of reference in future rate negotiations.

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.