On the Clock with Freight Bills

On the Clock with Freight Bills

Copyright 2009, Traffic World, Inc.

Q:

We have a question concerning what the time limit is for a truck carrier to submit a freight bill.

The rules appear to be clear that the carrier has 18 months to recover the freight charges, but the law appears silent on when a carrier has to submit the freight bill except for the Code of Federal Regulations, 49 CFR § 377.205, which deals with credit rules and states that the carrier must submit the freight bill within seven days of the time they received the shipment.

What is commonly called the "180-day rule" (49 U.S.C. § 13710) limits the time for a carrier to issue any bill for charges in addition to those originally billed (undercharges). The only way I can figure that the law firm can state that the bill must be presented in 180 days would be for them to interpret that if a carrier did not present a bill within the first seven days, it is in effect saying that the freight bill is zero dollars and that it has 180 days to issue a bill that would be in addition to that originally billed ($0).

Of course this would be 187 days from shipment (seven days to submit freight bill and 180 days from then to change).

In the past we would put a clause into our contracts that would limit the carrier to 180 days to supply the freight bill or the bill would be canceled. Unfortunately we recently were acquired by a company that does not believe in transportation contracts, and that has thrown us back into the world of regulations and rules tariffs.

Short of a contract provision is there anything limiting the time a carrier has to supply a freight bill? I've researched your old Q&As as well as your freight loss and damage book and if the answer is in there, I've missed it.



A:

Actually I have addressed the issue in past columns (my claims book deals with another subject), but maybe it's time to do so again.

The statements of the TLC and the law firm you found are both accurate, but both entail the kind of shortcuts you tend to get when you translate legalese into so-called "plain English." Your own understanding is also close to the truth, although you missed something.

Start with the "180-day rule" of 49 U.S.C. 13710(a)(3)(A) (as related to carriers). The 180 days is measured "from the receipt [by the paying party] of the original bill," which means it comes into play only when an original bill was presented.

I expect the law firm - you named it, and I know it to be extremely knowledgeable about transportation matters - wrote as it did on the assumption that an original freight bill had been submitted. As I said, one takes shortcuts in translating the law for lay understanding.

Your suggestion that, since the CFR requires presentation of freight bills within seven days, the original bill might be deemed to have been presented within that time even if it wasn't, is ... well, creative. But I've never seen it applied that way in any court.

The fact is that the regulation is completely toothless. Even the old Interstate Commerce Commission, which wrote it, never really sought to enforce it; and the Federal Motor Carrier Safety Administration, which inherited it, has neither a mechanism nor an inclination to do so.

The one thing you got a little wrong, by the way, is that the rule nominally obliges the carrier to bill within seven days from its (the carrier's) receipt of the goods only on prepaid shipments. For collect shipments the seven days is measured from the date of delivery. But since the rule is meaningless anyway, who cares?

So the only time limit that comes into play for presentation of original bills is that of 49 U.S.C. § 14705(a), which requires carriers to initiate lawsuits to collect their freight charges within 18 months "after the claim accrues."

Technically, I suppose the carrier doesn't ever have to submit a freight bill so long as it sues within the requisite time. But since I expect most courts would frown mightily on such a failure, the carrier had best get its bill in within those 18 months.



The only question that remains is when "the claim accrues," and the TLC has it largely right. Under § 14705(g), "a claim related to a shipment of property accrues under this section on delivery or tender of delivery by the carrier" (that is, even if the consignee rejects the delivery).

So short of a contract agreement, your obligation to pay freight charges remains legally alive for 18 months following delivery whether or not the carrier presents a bill. Maybe you might ask your new corporate bosses to reconsider their view about transportation contracts.



-- 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.