Finding the Shipper of Record

Q: Our company provides training services for individuals. For this training, we provide course material consisting of textbooks and other items. The course material is shipped to the students using a major parcel carrier. The charges for the parcel shipments go to our account, not the printer’s; we pay the carrier directly for transportation of the small packages.

Here’s the rub: If one of our employees calls the carrier to make a change to the shipment, the carrier tells us that, because we are neither the shipper nor the recipient, there are no instructions we can issue. My point is, we are paying for the freight and it is on our account. This does not fly very well with the carrier.

Additionally, if a damage claim is made, it’s the shipper, not us, who has to make the claim and who gets the funds. While our relationship with the shipper is good, and I’m sure it would turn the funds over to us, my fear is that the funds would get lost within the larger corporation.

Is there some strange, weird, wonderful and archaic law that prevents our company, as the financially responsible party, from making changes or filing claims?

A: Not at all. Any strangeness, weirdness, wonderfulness — and, if you will, archaic-ness — is to be found solely in the parcel carrier’s policies.

In fact, the law says clearly quite otherwise — that as beneficial shipper (freight bill payer), you have the right to direct changes in service and, especially, that as the goods’ owner, you have the right to file claims.

Now, it’s possible that you’ve renounced those rights. Terms of service of the major parcel carriers (they all have the same policies) are spelled out in the carriers’ tariffs, to which you agree when you tender them your shipments.

How this would play out in court, were you so foolish as to sue to challenge the policies, is kind of a moot point. The court might uphold the tariffs, or it might overrule them as excessively impinging on your rights; I can see either as possible.

The much more likely outcome, though, is that the carrier wouldn’t bother to defend; it would simply give in. Of course, it would then immediately cancel your account and leave you to find other means of getting your textbooks moved. You’d win the battle and lose the war.

If you ever served in the military, you’ll probably remember the classic response when a soldier asks “why” about just about anything he or she is ordered to do: “There’s no reason; it’s just our policy.” It’s a standing joke.

But if one looks beyond the joke, one often discovers that there is indeed a “reason” for many of those policies. That’s not always, I admit, nor is it always a very good reason, but at the time the policy was created, it was usually done for some purpose that at least made sense at the time.

In the case at hand, that purpose is simple economics. Parcel carriers move a massive number of very small shipments on which the individual profit margin is tiny. They earn a few cents, maybe a buck or even two, on each shipment, no more. So they have to streamline operations, and operational practices, as much as they can.

Now, there are lots of potential parties of interest in any given shipment. There’s the shipper, the receiver and a whole raft of possible third parties, each of which may have different standings with regard to different shipments.

It would take the carriers a lot of administrative effort to sort out the status of each party seeking to give them shipping instructions or file claims if they had to do it shipment by shipment. Administrative effort translates to money, money they can ill afford to lay out given the economics of their line of work.

So they keep it simple by restricting their dealings to only one of the parties, the maker of the bill of lading — that is, the shipper. If the shipper says do something, it’s yessir, yessir, three bags full; if it files a claim, the claim is processed and (ordinarily) paid. If anybody else does either, they basically ignore that person, whatever his or her normal legal rights might be.

In the circumstances, can you blame them?

Yes, it’s inconvenient, especially in situations such as that in which you find yourself. And you can alter it if you can arrange for your textbook provider to ship in your name, showing itself as only your agent. Otherwise, though, I’m afraid you’re stuck.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.

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