Q&A: Does carrier owe shipper explanation?

Q&A: Does carrier owe shipper explanation?

Copyright 2003, Traffic World, Inc.

Q:

We ship a bulk product via pneumatic truck to a customer whom we sell to on a delivered basis. We arrange the logistics (railcars to central point, transload, local bulk trucking) and invoice them for one price that includes product and all freight-related costs. The price includes two hours'' free time for unloading at our customer''s site, which is what the carrier offers us.

The problem: For a stretch of about six to eight weeks the carrier we used began presenting us with detention bills for two, three, sometimes almost four hours, extra time during offload.

The bills had a delivery ticket attached that showed arrival time, start time, finish time and departure time. In addition, the security guard at the customer site signed this ticket. In a small percentage of cases the driver noted via written comments why he was there so long, but most bills did not have an explanation.

Is there any minimum information requirement that a carrier must meet in order to collect detention? In order to collect these monies from our customer, is it unreasonable to ask for a written explanation for all detention?

A:

Unreasonable? No, you can certainly ask. But as to an "information requirement," the carrier already is providing you with all the information you really need - properly verified records of when the unit arrived, when unloading commenced and when it finished, and when the unit departed the consignee''s premises - and all, I think, that your customer should need.

I won''t delve into why you''re receiving these detention bills at all. In most cases detention is billed "to the shipment," meaning to the party responsible, who in the case of destination detention is obviously the consignee. By accepting delivery the consignee also accepts the transportation contract (ordinarily the bill of lading) under which service was performed and is therefore liable to the carrier for its applicable charges irrespective of shipping terms (collect or prepaid); see Corpus Juris Secundum, 13 C.J.S. Carriers 478(a).

In many cases when shipments are billed prepaid, as yours clearly are, and the shipper''s invoice to the consignee includes reimbursement of the prepaid freight charges, as yours clearly do, the consignee may escape this liability for carrier charges if it''s already paid the shipper''s invoice on the ground of equitable estoppel. That is, it effectively reimbursed the shipper for the freight charges based on the carrier''s representation (via the B/L) that the shipper had paid such charges, and if it paid the carrier as well it would be inequitably injured by de facto having to pay twice for the same service. See, e.g., Griffin Grocery Co. v. Penn. R. Co., 92 S.E.2d 854, and others.

But the doctrine of equitable estoppel clearly doesn''t apply to detention charges at destination, since they were patently unanticipated by the shipper and cannot be considered as included in the shipper''s invoice price. Therefore the consignee owes them directly to the carrier even if the shipment was otherwise billed as prepaid.

In your case, though, apparently either the shipments in question are moving under separate contract, which renders you liable to the carrier(s) involved for all charges, or you have some other such arrangement that involves your agreement for the carrier to bill you for these charges. Whichever is the case, you''re quite correct in rebilling your customer.

And I can''t see why you need more information than the carrier is providing, which is quite sufficient to substantiate those charges. There''s clearly no realistic way that the carrier or its driver are responsible for the unloading delays; once the unit arrives at the delivery point, the actual act of unloading is in the consignee''s sole discretion. I mean, how is the driver going to delay this - tell the consignee''s people that "gee, I''m just not in the mood right now?"

OK, if you want to get really picky, I suppose a lazy driver could indeed stall unloading somewhat, or excessively delay leaving the facility. But this would be an extraordinary circumstance, surely one that would be reported upstream in your customer''s organization and which its management would duly pass on to you in response to your demand for reimbursement of the detention charges. And I''m sure you''d have included such disclaimers in your recitation of events to me. Since you didn''t, I think I''m reasonable in assuming no such extraordinary events occurred.

In which case, I see no need at all for you to provide your customer with additional explanations for the delays. It knows, far better than you or even your carrier (who was at least on-scene for the situation), what''s going on at its receiving facility - or at the very least it most certainly should know. So the information you''re receiving from the carrier, even if it includes no specific description, should be sufficient in the absence of exculpatory explanations by the customer. I know all about sales and marketing people caving in to the slightest whims of their customers, but their commissions aren''t dependent on how much your company is netting from those customers'' sales. Your company''s profits, however, are, and it''s your job to protect those profits by pressing for reimbursement of unexpected charges such as these.



-- 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.