Make sure you’re aware of adverse tariff rules

By Ray Bohman -- Logistics Management, 12/1/2006

Just about every for-hire carrier that operates in interstate commerce and is licensed by the U.S. government issues a tariff containing its rules.

After the Interstate Commerce Commission (ICC), which enforced federal transportation laws, was shut down on January 1, 1996, Congress allowed motor carriers, freight forwarders, package carriers, and railroads to maintain tariffs without having to file them with any government agency—including the Surface Transportation Board (STB), the agency that was later formed as a successor to the ICC. Congress also adopted a provision that such carriers are not required to furnish a copy of their tariffs to their customers unless requested to do so by the shipper.

The unfortunate result is that many shippers fail to request a copy of those tariffs, and they end up conducting business with carriers without knowing all of the terms their shipments will be subject to.

Some of the tariff rules may be adverse to your company, and I strongly recommend that you become thoroughly familiar with them so they don’t come as a surprise when your carriers apply them.

Here are just a few of the potentially adverse motor carrier tariff rules that you should be on the lookout for:

• Loss of discount, or the assessment of a penalty if freight charges are not paid in compliance with the individual carrier’s credit rules (these rules vary from trucker to trucker)
• Assessment of surcharges against freight that exceeds certain dimensions, has a light density, or fills the carrier’s vehicle to full, visible capacity
• Limitation of recovery for claims related to loss, damage, or delay to an amount that is lower than the actual value of your products, without your consent
• Limits on the application of freight all kinds (FAK) rates, such as a Class 70 FAK that applies only on commodities taking a rating up to Class 125 (anything above Class 125 would not be subject to the FAK)
• Assessment of surcharges for providing additional services, such as:

- residential deliveries
- deliveries to schools, colleges, or universities
- single shipments
- notification prior to delivery
- redeliveries
- inside deliveries
- storage
- detention
- reweighing
- diversions
- stop-offs for partial loading or unloading
- tarping
- cleaning

• Reduction of claims payments by the same discount percentage that was applied to the rate for that shipment
• Subjection of all shipments to the carrier’s individual or rate bureau Rules Tariff No. 100, including supplements and reissues thereof, instead of applying rules that were agreed to in a separate letter or contract
• Cancellation of discounts when the carrier serves an origin or destination point through a connecting carrier for its own operating convenience

Having a thorough knowledge of such adverse rules before you make any shipments may provide you with the opportunity to sit down with a carrier and negotiate exceptions to any terms that you believe would be objectionable to your company. If you do so, be sure you get any agreement you reach in writing on the carrier’s letterhead.