Waynes World - June 2004

TRUCKING 101: BACK TO THE BASICS.
THIS MONTH, WE'LL BE LOOKING INTO SOME...

COMPLEX ISSUES REGARDING
BILLS OF LADING
By Wayne Schooling

Q: Would current law support a different bill of lading form layout than described in the National Motor Freight Classification? This Bill of Lading (BOL) would have the same information with an area for bar coding and a supplemental page or continuation page. Also, could you describe the Voluntary Interindustry Commerce Standards (VICS) bill of lading?

A: At one time, back in the good old days of trucking, most motor carriers were participants in the National Motor Freight Classification and thus were required to use the Uniform Straight Bill of Lading published in the NMFC. With deregulation, the abolition of the “filed rate doctrine” and the elimination of the ICC, there really is no law or regulation that mandates any particular form for the bill of lading. Today, many shippers have adopted their own forms, and there are many different versions of the “bill of lading” in use.

Carriers generally favor use of the Uniform Straight Bill of Lading as set forth in the NMFC, however, the NMFC bill of lading contains “incorporation by reference” language that makes the classification and the carrier’s (unfiled) tariffs part of the contract of carriage. These tariffs usually contain liability limitations, accessorial charges, late payment penalties and other rules unfavorable to the shipper. Beware of one shipper-friendly bill of lading which is the Shipper’s Domestic Truck Bill of Lading” which was developed by the Transportation Consumer Protection Council. This document is available in a “kit” from the council, which includes an explanatory booklet and a form that can be modified or tailored to the needs of the shipper.

The VICS bill of lading has been adopted by some of the large retailers and is principally intended to establish a uniform format and to facilitate EDI transmittal of the BOL data. However, the authors of this BOL adopted what they call the “legal statements” from the Uniform Straight Bill of Lading in the National Motor Freight Classification. Thus, the VICS BOL incorporates the NMFC and the carrier’s (unfiled) tariffs – and is favorable to the motor carrier. Obviously, if all of your shipments move under a properly drafted transportation contract, the form and language of the bill of lading is not critical because the contract provisions will prevail. On the other hand, there may be situations where some shipments are not covered by your contract, so the VICS BOL language would govern.

Q: We are a small common and contract motor carrier. We do not participate in the NMFC. We have published tariffs but most of the shipments we are talking about are LTL loads received via brokers. The tariffs we have published are not sent to the brokers or shippers. We use quotes to settle on a price. When our drivers pick up a back haul load, we have them put a sticker on the shipper’s paperwork (BOL). The sticker reads: “Receipt subject to inspection, correction, and tariffs or note agreements. Driver is not authorized to waive rules or adjust charges.” We also send a quote to the broker/shipper that states our $2.50/lb. limit of liability, detention information, shipper, consignor, rate information and wording “subject to terms and conditions of the Uniform Straight Bill of Lading on file in carrier’s office.” My question is, if the shipper’s BOL has terms that we do not agree with, are we bound by any of the rules? Since we formally did not issue a BOL, can we enforce the $2.50/lb. limit of liability? If we do issue a BOL and the shipper won't sign it or accept it, what is the governing document?

A: In regards to “which bill of lading governs” is a controversial subject. Shippers generally don’t want to use a carrier's bill of lading or the Uniform Straight Bill of Lading from the National Motor Freight Classification because it incorporates provisions of the carrier’s unfiled tariffs, which usually contain liability limitations, accessorial charges, late payment penalties, etc. Unless the shipper demands (and the carrier provides) a complete copy of its tariffs, the shipper has no way to determine what is in the tariffs and the carrier can unilaterally modify its tariffs without any obligation to notify the shipper.

Conversely, most carriers want to use a bill of lading that incorporates their tariff rates, rules, terms and conditions, etc. and don’t want their drivers to accept shipper versions. A bill of lading can be merely a receipt for the goods, or it can be a contract – IF it contains the contractual language governing the obligations of the parties. Regardless of who prepares the bill of lading, if it has the typical language from the Uniform Straight Bill of Lading, the carrier’s tariffs are usually “incorporated by reference” and would be binding on both parties.

If the shipper prepares a bill of lading and it does not incorporate any tariffs, and the carrier accepts the shipment, I would say that the carrier cannot rely on its tariff provisions. I do not think that any stickers or subsequent notations placed on the bill of lading “after the fact” would be enforceable.

If the carrier gives a written rate quotation which contains all of the important terms and conditions, and the shipper accepts and signs the quotation, it should be an enforceable contract (regardless of what the bill of lading form says). Note that the provisions of the Interstate Commerce Act, such as the Carmack Amendment, provide time limits. Therefore, statues of limitations would still govern the transportation unless the contract contains an express waiver.

My suggestion would be to use a formal transportation contract whenever possible. You may want to have different contracts when dealing with a shipper vs. a broker. A properly drafted contract is the best way to avoid problems and disputes. If you really want to put the icing on your cake, then print your own Uniform Straight Bill of Lading with your company name on it and give them away free to your customers to save them the printing costs.