Waynes World - February 2004

DRUG TESTING RULES, THE IMPORTANCE OF A
CONTINUING EDUCATION, AND...

COMMON ERRORS MADE BY
MOTOR CARRIERS

By Wayne Schooling

Q: If an individual fails to test during a selection period, are they required to complete THAT test before the year-end period? Will it count towards the year-end total?

A: The federal regulations say, “Each driver selected for testing shall be tested during the selection period.” Please note that the word “shall” was used (not “may” or “could”) in this sentence. This means that the driver must take the test during the applicable period. The test does NOT count if it was not conducted during the selection period. Depending on the reason the test was not conducted, it is either considered excused (driver was on extended vacation) or a refusal to test (driver was notified by employer, but never went).

CONTINUED EDUCATION

We have covered many subjects over the years, with the last few topics being on corporations. Now that you’ve got your company set-up, it’s time to learn the ins and outs of the transportation industry (without going through the school of hard knocks).

The coming series of articles have been designed so that if you save each article you will have a small booklet. We will be covering the different problems that have come to light over the last 40 years that I have been in the transportation industry. The subjects we’ll be covering will address the various problems you’ll eventually run into dealing with brokers, freight forwarders, bankrupt carriers, bills of lading, carrier liability, chargebacks, contracts, damages, detention charges, freight charges, freight claims, receiving procedures, refused freight, tariffs and much more.

If you care about your company, then you need to know how to protect it against the surprises and pitfalls of doing business with freight carriers, forwarders and other intermediaries. In deregulating the surface transportation industry, Congress sent a message, but most people have either not heard it, or don’t understand it. The message is that the government is no longer spending money to protect the public interest!

The US DOT clearly stated in its report on cargo liability that “The clear congressional intent in the ICC Termination Act was to limit government involvement in regulation.” A large void was created by the sunsetting of the Interstate Commerce Commission. Most small companies have misread this ending of the ICC as meaning that they no longer need a transportation professional on staff, or that they no longer need education or training. Some also believe that contracting, now the most prevalent method of shipping goods, eliminates the need for a transportation staff. On the contrary, using contractors requires as much or more constant administration
by knowledgeable personnel.

Small to medium motor carriers are the least sophisticated in transportation because of the many hats each person has to wear. One might not only be the owner of the company, but sometimes the salesmen, the billing clerk, the payroll clerk, the driver and the janitor. This series of publications will be your manual on shipping and receiving. It was designed to help small to medium firms avoid costly errors in dealing with other parties in the transportation industry.

COMMON ERRORS AND OMISSIONS

This month, we take a look at some of the errors and omissions most commonly committed by small to medium motor carriers - errors that often result in additional and unexpected costs. Carriers often fail to:
1) Inform shippers of the rules, accessorial charges, liability limits, and credit terms that will apply while negotiating rates and service;
2) Correctly rate freight bills in accordance with contracts, rate agreements, and tariffs;
3) Correctly classify freight in accordance with the National Freight Classification;
4) Furnish a copy of their tariff rules promptly when the shipper requests it;
5) Investigate a claim when they have a “clear” delivery receipt;
6) Maintain a single, realistic, base-rate structure for negotiating rates with shippers;
7) Acknowledge and pay claims in proper accordance with the USDOT regulations;
8) Employ a certified claims professional to process loss and damage claims;
9) Retain the integrity of palletized, unitized shipments or pay resulting shortage claims;
10) Acknowledge and pay overcharge and duplicate-payment claims as required;
11) Know the value and other characteristics of freight when negotiating rates;
12) Authenticate the identity of “occasional” consignees before delivering freight;
13) Require the proper type of payment for cash on delivery (C.O.D.) shipments;
14) Notify customers of changes in liability or other tariff rules before they go into effect;
15) Follow shippers’ special instructions for handling and protecting freight.

In addition to addressing these errors and omissions, carriers may also wish to reconsider other practices that can result in disputes, claims, and litigation, including:
A) Stating in rate agreements and contracts that “The terms of a ‘Standard Bill of Lading’ shall apply.” There is no such document. The parties must agree on a specific bill of lading;
B) Permitting drivers to break seals before delivery and then claiming they have a “clear seal record” so they can deny liability for any shortage that might occur;
C) Accepting shipments without checking whether the shipper has loaded the cargo properly, and later alleging that damage was caused by the shipper’s improper loading;
D) Using tactics such as denying claims and delaying payments in hopes of inducing a settlement by “wearing down” the claimant.

Stay tuned for more next month. Until then, “Drive Safe - Drive Smart!”