What You Need to Know About Filing Overcharge Claims

By Ray Bohman -- Logistics Management, 10/1/2005

Software that helps carriers rate shipments more accurately is being employed to a greater extent than ever before, yet some freight bills continue to contain errors that result in overcharges.

In order to find and rectify overcharges, many shippers audit their freight bills in-house before paying them. Others hire outside freight bureaus to pre-audit and pay freight bills. (Overcharges caught at this point—that is, before they are paid—can be deducted from payments.) Still other shippers hire outside firms to perform post-audits after their freight bills have been paid.

Although shippers are free to take any of those approaches to handling overcharges, there are some rules that both shippers and carriers must follow when handling overcharge claims.

For many years, there were no federal regulations governing the processing of overcharge claims. Finally, in 1978 the Interstate Commerce Commission, in Ex Parte No. 342, Procedures Governing the Processing, Investigation and Disposition of Overcharge, Duplicate Payment, or Over Collection Claims 358 I.C.C. 114, adopted regulations providing uniform procedures for the efficient handling of such claims. Those regulations are still in force, and they apply to all federally licensed motor common carriers and freight forwarders.

The overcharge regulations are set forth in nine provisions:

·Application

·Definition

·Filing and Processing

·Documentation of Claims

·Investigation of Claims

·Claim Records

·Acknowledgements of Claims

·Disposition of Claims

·Disposition of Unidentified Payments, Overcharges, Duplicate Payments, and Overcollections Not Supported by Claims

In essence, these regulations provide that:

·a shipper must contest the original bill or subsequent bill within 180 days of receipt of the bill.

·such claims, when filed, shall be accompanied by sufficient information to allow the carriers to conduct an investigation and pay or decline the claim within the time limitations set forth in the regulations. This includes the name of the claimant, its file number, and the amount of the refund sought. The original freight bill, or a copy, must also be included with the claim.

·requires the carrier to promptly initiate an investigation and establish a separate file.

·requires the carrier to acknowledge receipt of the claim within 30 days of its receipt, unless it has already been paid or declined within that period.

·requires the carrier to pay, decline to pay, or settle each claim within 60 days of its receipt. Procedures for extending that deadline are specified in the regulation.

Shippers should know that the National Motor Freight Classification (NMFC) includes a sample overcharge claim form titled, “Standard Form for Presentation of Overcharge Claim.” A Bond of Indemnity is included in the form and must be filled out and signed if the claimant submits a copy of the original paid freight bill. Only carriers that participate in the NMFC at the time of transportation may use this copyrighted form, but shippers can request copies from their carriers.

If you don’t have the time or the in-house capabilities to conduct an effective audit of your freight bills, there are many independent auditors that are qualified to perform a thorough pre- or post-audit for you. If you choose a post-audit, however, be sure to send the paid freight bills to your auditor as quickly as possible because all overcharge or duplicate- payment claims must be contested within 180 days of receipt.