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7 REQUIREMENTS FOR THE Q: I have three questions. 1) If Section 7 is signed, but the bill of lading is marked “prepaid”, who owes for the freight? 2) If Section 7 is signed, but the bill of lading is not marked “prepaid” or “collect”, who owes for the freight? 3) Where can I learn more about transportation? Please help me with these issues - Sam, Los Angeles, CA. A: First, let's start out by answering Sam's third question. The NTA, in association with Cal State Long Beach, now offers a Global Logistics Specialist (GLS) college degree that can be earned online. Enter the world of logistics and learn all the areas of the supply chain, all in the comfort of your own home or office. As the logistics community moves toward the complete integration of the supply cycle, the need for understanding the whole process grows. Understanding how freight flows, where it is at any time, and knowing possible choke points or problems, benefits not only the shipper but also the logistics providers, allowing them to maximize the use of their resources. Call the NTA or visit www.ntassoc.com and click on “GLS Degree” for more information about this remarkable new program. Okay, now let's get to Sam's
first two questions. Let's get all the facts right and start out by
looking at the current version of the Uniform Straight Bill of Lading. On the reverse side of the bill of lading, there is the following language: Section 7(a) – The consignor or consignee shall be liable for the freight and other lawful charges accruing on the shipment, as billed or corrected, except that collect shipments may move without recourse to the consignor when the consignor so stipulates by signature or endorsement in the space provided on the face of the bill of lading. Nevertheless, the consignor shall remain liable for transportation charges where there has been an erroneous determination of the freight charges assessed, based upon incomplete or incorrect information provided by the consignor. (b) Notwithstanding the provisions of subsection (a) above, the consignee’s liability for payment of additional charges that may be found to be due after delivery shall be as specified by 49 U.S.C. 13706, except that the consignee need not provide the specified written notice to the delivering carrier if the consignee is a for-hire carrier. (c) Nothing in this Bill of Lading shall limit the right of the carrier to require the prepayment or guarantee of the charges at the time of shipment or prior to delivery. If the description of articles or other information on this bill of lading is found to be incorrect or incomplete, the freight charges must be paid based upon the articles actually shipped. It should be noted that the words “Freight Collect” in the box on the face of the bill of lading, and the limitation to “collect shipments” in the Terms and Condition on the reverse side, were not present in earlier versions of the Uniform Straight Bill of Lading. These words were added in 1997. It should also be observed that the face of the current version of the Uniform Straight Bill of Lading contains another box that states: “Freight Charges are PREPAID unless marked collect. Check box if collect.” Thus, on the current bill of lading, if nothing is done and the box is left empty, the presumption is that the charges are prepaid, not collect. Now, with all that said, let's get to some answers for Sam. In regards to Sam's first question regarding who owes for the freight charges if Section 7 is signed, but the bill of lading is marked “prepaid”, bills of lading are not marked “prepaid”, they are prepaid unless marked “collect”. The current NMFC Bill of Lading does not permit the use of Section 7 for a prepaid shipment. Under the court decisions interpreting the old (pre 1997) bill of lading, a shipper could sign Section 7 on a prepaid bill of lading. Usually this meant that the shipper would pay the freight charges agreed at the time of shipment, but would not be liable for charges accruing afterwards, such as detention or redelivery charges. There was some authority that the shipper could avoid all liability, even for the agreed prepaid charges. In other words, if the shipper did not pay the agreed charges, the carrier could collect only from the consignee. If a driver picks up a load and Section 7 is signed, the driver should immediately call his dispatcher, because if the shipper signs Section 7 and the consignee does not pay the charges, the motor carrier can not go back to the shipper to be paid. If Section 7 is signed, you, as the motor carrier, should demand payment before making the delivery. The shipment should be treated as a C.O.D. “Cash on Delivery”. On Sam's second question regarding who owes for the freight charges if Section 7 is signed but the bill of lading is not marked “prepaid” or “collect”, as noted before, if the bill of lading is not marked at all, the shipment will automatically be considered prepaid, and the answer to question #1 will again apply. |