When Paying the Bill 'Isn't My Job'

Q: Help settle an internal debate. There’s a freight bill where the shipper, consignee and third-party c/o freight payment company are all separate entities; in other words, the party responsible for paying freight charges is neither the shipper nor the consignee.

The third party denies responsibility, claiming the shipment wasn’t theirs and that the shipper filled out the bill of lading incorrectly. What is the appropriate action from among these choices?

-- Carrier is instructed to revert to shipper for proper billing instructions.

-- Carrier should bill the shipper for all freight charges.

-- Carrier demands the third party request and obtain a letter of authorization from the responsible party.

-- The freight payment company (third party) should contact the shipper for the carrier.

Per the National Motor Freight Classification uniform bill of lading terms and conditions and carrier’s rules tariff, freight charges are guaranteed by the shipper. In my opinion, the freight payment company should instruct the carrier to contact the shipper for proper instructions.

However, as a third-party logistics provider, there’s a prevailing opinion that our agreements with customers and carriers and third-party billing instructions on the B/L somehow override the aforementioned B/L terms and conditions as well as the carrier’s rules tariff.

Who’s right?

A: I confess this is something of a puzzler. Not your question, the answer to which is quite straightforward; I mean the situation as a whole.

Look, if you offer me a markup to pay your bills, I’ll be quite happy to accept, and I’m not even in that line of work. Oh, I’ll make sure your check clears first, of course (there are scams like this involving bogus checks), but after that, I’ll cheerfully take your 10 bucks and give nine of them to whoever you designate.

So I have no idea why the third party, which is in that line of work, is spitting itself of this particular shipment. Because I gather that you are the third party, I’m sorry you didn’t choose to share your thinking with me on this point.

Be that as it may, your first and second choices above, which overlap, are the right ones. The carrier should bill the shipper directly, but also should be willing to accept its instructions to instead bill the consignee subject to recourse against the shipper if the consignee doesn’t pay.

Your other two options, both involving the third party in some kind of activity respecting this bill, make no sense. The third party already has told all and sundry that the B/L instructions were a mistake, that it has and wants nothing to do with this shipment.

On what possible basis, then, would the third party have any need or desire to do anything else about the bill? How, in particular, might it be obliged to obtain some kind of “letter of authorization” from “the responsible party,” much less go through the annoyance of trying to determine who might be that “responsible party?”

The B/L, to which the third party was not a party and which moreover it has expressly disavowed, imposes no obligation of any kind on it. If you want to make out a bill of lading showing me as third-party payer, have at it. I’ll just giggle when the bill shows up; if I’m in a good mood, I might give the carrier a courtesy call saying nuh-uh, but either way, I’ll just trash the bill.

What I most certainly won’t do is put myself out trying to sort through the rights and wrongs of the mess in which some over-eager shipper has tried to embroil me. Years ago, there was a comedian named Freddie Prinze who made a catchphrase out of the line, “It’s not my job.” That’s applicable here.

Now, I think I read between the lines that you, as the third party, have some kind of ongoing relationship with the shipper, carrier and/or consignee here, even though it didn’t include this shipment. In such a case, you might, as a matter of customer relations, voluntarily make some perfunctory effort to determine the proper destination for this bill.

But you’re under no obligation to do so, nor should any of the parties — whether or not you have any relationship with them otherwise — rely on you for such service. You say you’re out of this one? Well, I suggest you stay out of it. Don’t take action that could later be construed as legally accepting responsibility.

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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