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Carrier Discounts-Who Has to Know

Reproduced with the Permission of Miles L. Kavaller 

A question from one of our members: Is a motor carrier required to show all  charges and discounts on the freight bill invoice to the consignee where the freight charges are prepaid? The Answer: It depends. (The typical lawyer answer!)

The ICC Termination Act provides guidance in the section which addresses “Billing and collecting practices”.  See 49 U.S.C. Sec.13708. In pertinent part it states that:

 A motor carrier “...shall disclose, when a document is presented or electronically transmitted to the person responsible directly to the motor carrier for payment...the actual rates, charges, or allowances for any transportation service and shall also disclose, at such time, whether and to whom any allowance or reduction in charges is made.”

The policy is to disclose motor carrier discounts to the party paying the freight charges. Where the carrier has agreed to pay the discount to the consignor (shipper) on collect shipments (and issue the freight bill to the consignee) all discounts and allowances must be identified.

This requirement may be problem for a vendor/seller of goods whose customer, the buyer is the consignee and has agreed to pay carrier freight charges. The disclosure will inform the buyer that the seller is getting something from the carrier–and the seller may want the benefit of the discount in the form of a reduced price for the goods being purchased. This issue, however, is not the concern of the carrier unless the carrier is requested by its customer to conceal the information. When faced with this dilemma call your lawyer.