Are Bill of Lading Changes Legal?

Are Bill of Lading Changes Legal?

Copyright 2007, Traffic World, Inc.

Q:

Can a carrier change a signed bill of lading after the load has been delivered?

I know what you have said about using brokers and listing them as the carrier on a bill of lading, but that is how we have ours printed. On the B/L after the products list a "vehicle description" is noted, such as a carrier name/trailer number. In this case we noted the carrier picking up the freight and their trailer number.

We, of course, paid the broker for the shipment. I have questioned them as to why they had not paid this carrier, and according to them this was a double-brokered load (not good) and the carrier handling the freight would not give them copies of the paperwork verifying the shipment and receipt of the freight so that our broker could pay them.

Copies I have received show that the B/L was altered after the freight was delivered. The broker''s name has been marked out and the carrier has handwritten their name on the carrier line.

Their attorney is threatening to sue for payment and says he tells all of his clients to mark out the broker name and substitute their name if they handled the load.

It seems to me that altering a document after it has been signed without the shipper''s knowledge is a dubious practice.

A:

Well, it may or not be dubious, but it''s strikingly ineffective.

I assume you have proof that the document was altered after the fact - to wit, your copy showing no strike-out in the carrier block. And that''s all you need. Fax a copy to the carrier''s lawyer and it should shut him or her up.

You mention my oft-repeated advice that a broker should never be named in the carrier block of a B/L. Do you remember why? It''s because a B/L is a contract, and the names in the "carrier" and "shipper" blocks are those of the contracting parties.

Now, you can''t contract with a broker for performance of transportation services. The law says those who provide for-hire transportation must be registered with the Federal Motor Carrier Safety Administration as carriers. A broker won''t be so registered, and therefore what you have as a strict matter of law is a contract calling for an illegal act if the broker is named as carrier.

Most courts, though, will let this slide and enforce the sense of the contract, which is that the broker arranges for the service and the shipper''s payment is due to the broker.

Which is why your carrier''s lawyer is telling his or her clients to cross out the broker''s name and substitute their own. That establishes the contractual relationship between carrier and shipper and gives the carrier at least color of right to collect freight charges itself.

But any lawyer who didn''t finish dead last in law school is telling clients to do this at the time of pickup, not as an afterthought. Carriers can''t unilaterally make themselves party to contracts without the knowledge and consent of the actual parties - you and the broker in this case.

So the after-the-fact alteration is legally meaningless. The carrier''s manager might as well have written his grocery list on the document for all the legal effect it has. The alteration certainly doesn''t give the carrier standing to sue as a contracting party, and it has no other basis to come back against you.

The double-brokering isn''t that critical, it merely extends the chain another link. The way it should go is you pay your broker per your contract with it (the B/L), your broker pays the second broker per whatever agreement the two of them have, and the second broker pays the carrier it enlisted to haul the load.

The proof of delivery, of course, works its way up the chain in the reverse direction.

Somewhere along the line the chain got broken. Either the POD didn''t find its way upstream or the money got sidetracked moving down the line.

Since you have the primary contract with your broker you might, in the interest of fairness, make inquiry there. Did it get the POD? Did it pass on your payment? If not, give it a swift kick in the rear end to get the motor revving; but if it''s done its part properly, your role is finished and it''s up to the carrier and/or its attorney to pursue things further.

They may not, however, properly pursue things further with you. The after-the-fact alteration of the B/L gives the carrier no status to sue you; if its lawyer is dumb enough to do so anyway, the evidence of your copy of the document should suffice to get the suit thrown out of court.

By the way, if it''s your broker who fouled things up, you might want to reconsider using it for the future. It''s guilty of, at best, sloppy practice, and you need this nonsense like a hole in the head. Otherwise, just tell it to knock off double-brokering your loads with unreliable connections (to avoid such contretemps again) and get on with business.



-- Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at P.O. Box 76; Morganton, Ga. 30560; phone, (706) 374-7201; fax, (706) 374-7202; 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.