There is a common misunderstanding that carriers no longer need tariffs, and many carriers do not have a tariff. It is correct that 16 years ago “filed” tariffs were eliminated and no longer allowed, but the law (49 USC 13710) now requires that a carrier “provide to the shipper, upon request of the shipper, a written or electronic copy of the rate, classification, rules, and practices, upon which any rate applicable to its shipment or agreed to between the shipper and carrier is based.”
This means that carriers must still have tariffs, although they can go by another name, if they wish to spell out their terms of service. These rules tariffs, if done properly, are a part of the shipping contract. If a carrier has no rules tariff, or does but does not incorporate it into the shipping contract properly, then the carrier is giving up its opportunity to specify the terms under which it provides service. This means, for example, that the carrier is forfeiting its right to elect the short nine (9) month claim filing and two (2) year lawsuit filing time limitations which are allowed but not automatic (again, contrary to what both many carriers and shippers believe) and to limit its liability.
Similarly, bills of lading remain critically important, especially these days when most shippers prepare the bill of lading. Regardless, carriers should still have their own bill of lading set forth in their rules tariff, which together govern all service provided. However, we are troubled by the frequency with which we see bills of lading (both carrier and shipper prepared) which refer to tariffs “lawfully filed” with the “Interstate Commerce Commission” (neither of which exist). Other bills of lading refer to and incorporate the NMFC even though the law now requires that the carrier participate in that tariff (49 USC 13703). Many of these bills of lading also are the “short form” version, which contains no terms or conditions. In these circumstances the carrier and shipper both run a risk since the shipment is transported on nothing more than a slip of paper which specifies the origin and destination, commodity description, and weight of the shipment. The agreed upon charge may or may not appear on the bill of lading or some other document. Better, more detailed, contracts are required to rent a DVD!
Carriers, shippers, and brokers all need to know not only what their shipping documents provide, but also what the shipping documents applicable to each specific shipment provide. Pull the documents out, read the fine print, and then ask yourself “What will happen if …” If you do not know or do not like the answer, then changes are in order.
Bilateral transportation contracts can avoid many of these issues, but are not suitable for every circumstance. Look for a discussion of contracts, as well as a continuation of the discussion concerning tariffs and bills of lading, in future newsletters.