Q: We have three shipments that have been taken by a carrier. One pallet is paid for, but they refuse to accept payments for the other two pallets and are holding our goods at their shipping center.
For some background, we were given quotes for a delivery, and in the recent past, they have added accessorial charges that were never agreed upon even after explicitly noting that we will not pay any of these additional charges. Now they’re forcing us to pay the additional charges and are holding our shipments hostage.
They’ve sent us a form that requires a signature of a credit card holder, so we can’t refuse the payment of these charges. What should we do?
A: You don’t say where all this is taking place, and it does matter. If you’re in California, you’ll probably have to dispute the charges they say you owe in court, but if you’re anywhere else in the country, I’d say you should call the cops.
Under the Uniform Commercial Code, which is adopted in 49 of the 50 states (the exception being Louisiana, which still accepts most of the U.C.C. provisions), a carrier has a lien on any shipment for the freight charges owed by the shipper on that shipment; U.C.C. Section 7-307, and see the legal compendium Corpus Juris Secundum, 13 C.J.S. Section 484. But that lien doesn’t extend to any other money the shipper may or, as in your case, may not owe the carrier, including unpaid freight charges or other shipments.
This means the carrier is holding your shipments without the support of law. There’s a name for this kind of action — theft — and it’s, of course, a criminal offense, which is why I advise you to call the police if you’re anywhere outside California.
The problem in California is that, although that state subscribes to the U.C.C., its legislature has seen fit to modify this particular provision of the law. In the California Civil Code is to be found Section 3051.5, which expressly extends the carrier’s lien to freight charges owed by the shipper on previous shipments tendered by that shipper, thus conferring legal status on the action taken by your carrier, provided the past charges are, in fact, lawfully due.
You, of course, dispute this latter issue, contending that (1) you never agreed to the charges in question, and (2) the carrier agreed to waive those charges. This, however, is a matter for the courts. If you have evidence of either of these things, I expect you’d succeed if you sued for release of your shipments without paying the carrier’s claimed charges, but it would take time and there’d be legal costs involved.
I recently had a phone call from a California shipper in just your situation. After the caller told me the disputed amount was about $1,500, the only answer I could give him was to go ahead and pay up, because the game simply wasn’t worth the candle — it would cost much more than that to even start a legal action.
To be sure, the carrier would also have legal expenses far exceeding the amount in question if it chose to defend, but it could simply give up and then perhaps do the same thing on another shipment.
Now, so far as I’m aware, California is the only state with a law allowing carriers to seize a shipment for unpaid charges on other shipments. So, if you’re elsewhere, the carrier’s action is wholly illegal, and once you present your situation to your local constabulary, they should be prepared to supply the muscle in getting your shipments released in exchange for your payment of the charges you say are still due on two of the “hostage” loads, payment they will oblige the carrier to accept. It surely won’t come to this, but if the carrier still refuses, its personnel could even be arrested.
Irrespective of where you’re located, I strongly suggest that you work out some kind of agreement with the carrier’s personnel, at a level high enough that the agreement can’t later be disavowed by the carrier about these disputed charges before using the carrier again.
Indeed, with this ongoing disagreement, I’m surprised that you made use of it for these three shipments. Weren’t you concerned that the same accessorial charges that you’re fighting would crop up again? I mean, if you know a dog tends to bite, it’s a poor idea to put your hand in its face.
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; email, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.