Accuracy in Billing: Look to the Tariff

Q: In your Nov. 19 column, “Master of the Billing Domain,” you responded to a question from a shipper who’d had a carrier combine two shipments tendered on two separate bills of lading at different times on the same day into a single shipment, and then billed charges higher than would have accrued if the two shipments had been handled separately.

You said you’d never seen this before, and opined the carrier was obliged to treat the shipments separately and bill accordingly. The carrier, you said, owed the shipper the difference between the billed charges on the combined shipment and the charges that would have resulted from the shipments being handled individually.

I quote from tariff UPFG 102-F of UPS Freight, Item 365, Note 1, effective Jan. 1, 2012: “When two or more shipments are tendered to Carrier from the same place during one calendar day for delivery to one place and the aggregate is equal to or exceeds 20,000 pounds or 28 linear feet of the vehicle, they will be consolidated and considered as one shipment.”

Would you like to reconsider your answer based on this?

 

A: I can only quote the late comedian George Gobel: “Well, I’ll be a dirty bird.”

Yes, if the carrier in question was UPS Freight or any other carrier with a similar tariff provision (my original correspondent didn’t identify the carrier), of course, I have to reconsider. If the carrier warned in advance (via its tariff) that it would do this, it was well within its rights to follow through.

This is the first tariff provision of its nature that I’ve seen, and, frankly, I’m flabbergasted to see it. In the ordinary course of events, such a provision wouldn’t redound to the advantage of the carrier, because rates on larger shipments are usually lower than those applicable to smaller ones; carriers aren’t usually in the business of voluntarily making adjustments that benefit shippers rather than themselves. In this instance, though, my original correspondent said the higher charges on the combined shipment resulted from application of a linear foot rule that wouldn’t have applied to the two smaller shipments if rated individually. I’d have to guess that this is a fairly common circumstance for UPS Freight (and perhaps others), and hence the rule.

Now, we could have a lengthy debate about whether this rule is or isn’t “fair” or “reasonable.” On the shipper’s side of that debate, one might expect that a shipper is entitled to break up its shipments as it sees fit without carrier oversight. On the carrier’s, it’s apparently closing a loophole that lets shippers evade a rule intended to ensure it fair compensation for the cubic capacity occupied by the shipper’s freight.

Such a debate, however, would be moot. In times of yore, there was a statutory requirement that motor carrier rates meet a standard of “reasonableness,” but that requirement’s long gone. These days, carriers can set their rates, charges, rules and so on as they unilaterally choose, and, as long as they do so up front, there’s no legal ground for challenge.

Carriers publish their tariffs privately, but the tariffs are required by law to be available on request to anyone interested. The tariffs constitute public notice of the rates, charges, rules, etc., maintained by the carrier, and it’s up to each shipper to familiarize itself with those conditions before shipping. The shipper’s failure to do so doesn’t excuse its obligation under those tariffs.

My guess is that my original correspondent was remiss in reviewing the carrier’s tariff (either that or he didn’t see fit to confide in me how the tariff read in this regard). But the language you’ve quoted speaks pretty clearly and directly to the issue the correspondent raised, and would appear to justify the higher charges he wound up paying.

In my original response, I mentioned the tale of a father advising his son not to bet with any man who offered a wager that he could make George Washington jump up off a one-dollar bill and spit cider in his ear. The father warned that the result would be an ear full of cider.

I think I should have heeded my own advice, because it appears that in this case, I’m the one with cider in my ear. That I’ve never seen a tariff provision of this ilk before clearly, as you’ve shown, doesn’t mean one doesn’t exist. I recant, and I thank you for the education. 

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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