In decision MC-999, served Dec. 21, 2001, the Surface Transportation Board (STB) granted the Household Goods Carriers' Bureau's request to amend its "released rate" authority. That amendment will give shippers the right to obtain full value protection (FVP) for their goods, which means they can opt to pay an additional charge in order to hold the carrier liable for the "replacement value" of lost or damaged goods, up to the declared value of the shipment. The carrier will have the option of paying either the cost of repairs to restore the damaged goods to their prior condition or the cost of replacement. Shipments will be deemed to have been released to a minimum lump-sum value of $5,000 or $4 times the actual total weight of the shipment, whichever is greater.

This new plan replaces the current option of holding carriers liable for the "depreciated value" of the goods, up to the declared value of the shipment, by paying the base rate plus a surcharge of 70 cents for each $100 of the total declared value. The "depreciated value" plan had a minimum value of $1.25 per pound times the total weight of the shipment.

Alternatively, shippers continue to have the option of paying only the base rate and limiting carriers' liability to 60 cents per pound per article . About one-third of household-goods shippers choose this lower-cost, reduced-liability option. One-half of those shippers are companies that are paying for employee relocations.

The STB said that these changes should result in a "simpler and clearer process for a household-goods shipper to select the level of the motor carrier's cargo liability, based upon the rate the shipper is willing to pay." The STB also justified the selection of $4 per pound as the minimum carrier liability because it was based on the carriers' recent estimation that the average value of household-goods shipments was about $4.50 per pound.

During the STB's proceedings, the National Association of Consumer Agency Administrators (NACAA) testified on the shipping public's behalf, alleging that unscrupulous household-goods carriers were deceiving shippers regarding liability in several ways. These included falsely stating that the 60-cent level would be sufficient to protect the householder's goods (when, in fact, it covers far less than the average value of household goods); failing to explain the liability options; not distributing the educational brochure required by the government; and instructing the shipper to check off "basic" on the bill of lading, which releases the carrier's liability to 60 cents per pound per article.

Accordingly, the STB ordered household-goods carriers to show a notice prominently on the bill of lading that described the liability options and required the shipper to acknowledge receipt of a brochure explaining the options in more detail. The notice must also clearly explain that the 60-cent liability limitation covers far less than the average value of household goods, and that with the FVP, the carrier will be liable for the replacement value up to the full shipment value declared, or, at the carrier's option, for restoring damaged goods to their prior condition.

Unfortunately, the STB's decision does not address the major cause of disputes between household-goods shippers and carriers: that rates are based on actual weights and declared values, but shippers never know how much their household goods weigh or how much they are worth by the pound!

Until the government requires estimates to be binding on carriers so that shippers can select the lowest quoted total charges, disputes over liability and charges will continue to raise questions as to the household-goods carriers' trustworthiness.