A Question of Tariffs, Licenses

A Question of Tariffs, Licenses

Copyright 2007, Traffic World, Inc.


A carrier that we know locally has a certificate issued by the Federal Motor Carrier Safety Administration to engage in transportation as a common carrier. Does that allow the carrier to enter into contracts? Are there different licenses for common and contract carriers and, if so, what are the distinctive differences?

We were offered a quote to move a shipment and asked for a copy of their tariff. They told us they don''t have one. Are we at risk with a written quote?

Also, during conversation with the owner we were told they move cargo on their own trucks but bill the same "from time to time" through their "logistics company" and they do have a broker''s license. We asked to what benefit could that possibly achieve and were offered a "just-because-we-can" answer.

We know we have the right to not move this shipment with them, but what does this activity do to, for, or against the shipper? Is there a benefit to them to handle it in this manner? After all, supposedly they have the common carrier authority, they own the trucks, they have the broker''s license, etc.


Wow, you do pack a lot of questions into just one paragraph (at least it was before I split it up).

Let''s go in order. Yes, there are separate common and contract carrier licenses ("registrations" is the statutory term) with the FMCSA. Are they any different? No, not any more.

So how come the distinction? It''s a hangover from the old days of Interstate Commerce Commission regulation (when there was a difference, a big one) that was cast aside by the Interstate Commerce Commission Termination Act that took effect Jan. 1, 1996.

FMCSA (before it, the Federal Highway Administration) was allowed to maintain the old distinction for two years, until it could get a new registration (licensing) system in place. As I write this in mid-2007, it still hasn''t accomplished this seemingly simple task, so there''s still a distinction. But given the nearly decade-long delay, I can''t believe any court in the land would care any more.

So do business any way you like with this "common" carrier. Both contract and common carriers are now subsumed in the statutory definition of "motor" carrier, and that allows either mode of dealing.

Now, the rate quote. If the carrier really doesn''t have a tariff I think it needs to climb back into its tree, but the law doesn''t require it to have one and even if it did a written quote would override the tariff. Per 49 U.S.C. ? 13710(a)(1), the quote will do it.

Get the carrier to make that "doesn''t have a tariff" stuff part of the quote, though. Most carriers merely quote line-haul rates with no provision for free time, detention, accessorials, etc.; for these they rely on underlying rules tariffs. If this one doesn''t include such things in its quote and denies having any tariff, you can hold it to the literal terms of its quote.

The third issue you raise is the carrier''s occasional billing of freight charges under its alter ego, the affiliated logistics company with broker authority. The owner may tell you this is random, but I''ll bet significant money that''s utter balderdash.

My educated guess is that the billings you get from the logistics company are for shipments that were brokered out - i.e., subcontracted to other carriers for the actual haul. Most carriers, even the big ones, do this from time to time when their own equipment is otherwise occupied, and with the logistics company''s broker authority I think it''s all but certain this is happening here.

Do you care? You needn''t so long as you maintain tight control of your shipping documentation, but you do need to do that.

So long as this company is a registered carrier and the bill of lading shows it in that capacity, it has liability to you for any in-transit problems - loss, damage or delay - irrespective of who does the actual haul. If it hires some other carrier to do the work, that''s its problem and not yours; it can''t alter the terms of the B/L by its mode of ex post facto billing.

But do not, I repeat do not, allow the B/L you''ve presumably prepared to be altered at the time of pickup to show some other party in the "carrier" box. I couldn''t care less what the logo on the tractor or trailer says, accept no alterations to your B/L (or accept no carrier-prepared B/L showing any other party as "carrier").

If you maintain these precautions, it''s your contracting carrier - the one identified on the B/L - who owes you for any claim. It can argue that E.T. from outer space actually hauled the goods, but E.T. isn''t the one whose name is on the contract and that''s what counts.

If the actual carrier is allowed to substitute its own name as "carrier," though, it''s another ball game. Now you must claim against the substituted carrier, whom you may not know from Adam''s off ox (and who may have just about as much financial responsibility). Don''t let this happen. The billing name is a "who-cares," but the name on the B/L matters. Make sure it''s the carrier you hired.

-- 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, (706) 851-5679; 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.