NASSTRAC SEMINAR

TRANSPORTATION CONTRACTS AND  BILLS OF LADING

Reproduced with the Permission of Miles L. Kavaller

NASSTRAC presented a program which was co-sponsored by the Journal of Commerce Traffic World Magazine and the California Trucking Association on February 24 at the Irvine Marriott Hotel. I was among the many guest speakers which included CBTC's President, Jim DeClerck. The morning session addressed contracts, bills of lading and carrier liability. These are subjects of current concern to the transportation and shipping community and are likely to be the focus of many future discussions.

NASSTRAC has developed a model TRANSPORTATION CONTRACT which was provided to those attending the conference. The panel focused on some of the more significant and potentially controversial provisions in the agreement including cargo insurance, freight loss and damage claims, the use of bills of lading, overcharges and undercharges. Review of existing contracts between shippers and carriers is highly recommended since there have been substantial changes in the law with the abolition of the ICC and the enactment of the ICC Termination Act of 1995 which took effect on January 1, 1996.

NASSTRAC has also prepared a model BILL OF LADING which was distributed to seminar participants. This model bill of lading is different from both the Shipper's Domestic Truck Bill of Lading which has been promoted by the Transportation Consumer Protection Council, Inc. (formerly known as the Transportation Claims & Prevention Council, Inc.) and the motor carrier's bill of lading contained in the current edition of the NMFC. Bills of lading are transportation contracts used for individual shipments. Transportation contracts, on the other hand, are typically used for multi-shipment arrangements for service over a period of time between shippers and carriers. A bill of lading may be used as a receipt for the cargo and its condition for each shipment transported under a transportation contract in which case the transportation contract should provide, as does the model contract provided by NASSTRAC, that the terms and conditions of the transportation contract control if inconsistent with the terms and conditions of the bill of lading.

The NASSTRAC model bill of lading is shipper "friendly", although it does contain many of the same terms and conditions which appear in the bill of lading in the NMFC. It is important to recognize that since the filed rate doctrine has been repealed, the terms and conditions of a bill of lading are subject to the same legal principles which govern contracts in general. Courts are no longer required to enforce all provisions of carrier tariffs (pricing publications) containing their rates and rules. Because the law in the various states may differ, and because the federal Uniform Bills of Lading Act does not address many of the terms and conditions in the typical bill of lading, a body of case law is likely to develop which will lead to different and probably conflicting interpretations.

The NASSTRAC program also had a panel on carrier liability. Although the panelists, representing both motor carrier and shipper interests, emphasized "partnerships" and good customer relations, there are nonetheless differing views on liability for freight loss and damage. While the shipper interests want to retain carrier liability for actual loss, carriers, on the other hand, would like to limit their liability. The parties are free to negotiate these contract terms, whether for single shipments, in which case the bill of lading would contain the appropriate limitation, or for multiple shipments, in which case the transportation agreement would contain the appropriate provisions. In the absence of contractual provisions, however, the law remains that a carrier is liable for the shipper's actual loss, in the case of loss, damage or delay to freight. The shipper's actual loss, that is the measure of damages to which the shipper is entitled often varies, depending on the circumstances of the shipment. That is a subject in itself which may be addressed in future articles.