Q: I work for a freight payment/auditing firm, and I have a question regarding time limits for filing overcharge claims and whether a carrier’s rules tariff can take precedence over federal regulations.
Say one of our clients has pricing in a discount tariff or pricing agreement that refers to the carrier’s rules tariff as a governing publication. If that tariff contains an item regarding the time limit for filing overcharge claims, will the carrier’s rule take precedence?
One carrier’s rules tariff says: “Debtor must contest the original bill within 180 days of the date of the original bill in order to have the right to contest such charges.”
This contradicts 49 U.S.C. Section 13710(a)(3)(B), which specifies the same 180-day period but measures it from the shipper’s receipt of the freight bill.
I know the carrier has 18 months to take legal action on an unpaid freight bill, meaning it can expect to be paid for a shipment as long as it has issued its invoice within those 18 months. But I have come across instances where our client has not been billed for several months, and by the time we get the bill from its pre-audit/payment firm to do a post-audit, it is past 180 days.
I have filed claims both for overcharge and billing errors in which outbound collect shipments were eventually sent to the shipper for payment. No authorization is shown to indicate the consignee had refused to pay.
The carrier declines these claims, citing its rules tariff, and refuses to acknowledge the federal regulation as applying.
Is the carrier correct? Whether a shipper has signed a pricing agreement or has just accepted a discount item in its tariff, is the shipper still subject to a carrier’s rule item that is in conflict with federal law?
Have there been any cases or decisions involving this?
A: The issue isn’t as clear-cut as one might wish, and no, I know of no case law, but neither do I think it’s legally very important.
In the ordinary course of events, the date the carrier cuts a freight bill will differ only marginally from the date the shipper receives it. With electronic billing ever more common, the two dates may be the same; even if the bill moves by snail mail, there should be no more than a couple days’ time lapse.
Under the circumstances you postulate — a carrier cutting a bill on a freight-collect shipment to the consignee and then, when the consignee doesn’t pay, belatedly rerouting it to the shipper — there may be a considerable time differential.
But the shipper isn’t receiving that first bill; the carrier will have to re-cut it to identify the shipper as payer (or manually alter it, which is the same thing).
I’ll all but guarantee you any court would consider the date of the reworked bill — the “original” bill to that shipper — rather than the earlier one sent to somebody else, to be the applicable issue date.
To draw a parallel, the shipper could scarcely be obliged to pay late charges because the consignee delayed payment of the earlier invoice.
As to whether the carrier’s tariff may override the governing law (the 180-day time constraint of the statute isn’t a “regulation”), no, mostly it doesn’t and can’t. Nobody can unilaterally rewrite a statute in a private document.
So for the most part, the proper measurement of the 180-day time limit will be from the date the shipper receives the rerouted bill, not either the date the consignee got the first bill issued nor, most certainly, the date the carrier cut that first one.
However, under 49 U.S.C. Section 14101(b)(1), shippers and carriers may contractually “waive any or all rights and remedies . . . for the transportation covered by the contract.” That’s not applicable for discount arrangements pursuant to a carrier tariff, which isn’t by any stretch of the imagination a bilateral contract.
You also refer, though, to shipper-carrier pricing agreements. Provided they’re signed by both parties, such agreements could arguably be considered to have contractual status; and incorporation by reference of the carrier’s rules tariff could make it part of the contract, meaning the shipper has waived its rights under Section 13710(a)(3)(B).
As I say, however, it’s still the date of the rebill to the shipper that matters, so it’ll be pretty rare that the difference is relevant.
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 536-page compiled edition of past Q&A columns, published in 2001, at $80 plus shipping.