SHIPPERS TARGET PANEL THAT RANKS CARGO \ GROUPS AIM AT BODY'S ANTITRUST IMMUNITY

SHIPPERS TARGET PANEL THAT RANKS CARGO \ GROUPS AIM AT BODY'S ANTITRUST IMMUNITY

Picture this: You're ordered to a hearing before a panel of people you've only just met, who'll decide what rules will govern your life, using evidence they refuse to share with you.

Sounds like some draconian, secret tribunal?No, it's the National Classification Committee, a panel responsible for the National Motor Freight Classification manual, which ranks cargo by type and plays a key role in rates.

The committee, an arm of the National Motor Freight Traffic Association, has come under fire in recent years for its actions and now faces the wrath of shippers who want the group's antitrust immunity curtailed.

Shippers have long complained that the decisions the committee makes on freight classification are almost always to their detriment.

The classification provides a description of commodities shipped by truck based on their weight and handling requirements. It's used as a reference by truckers, shippers, trade associations and transportation consultants.

But few shippers can understand the arcane jargon filling the classification's 750 pages, replete with fine distinctions for each descriptive article, said Daniel J. Sweeney, general counsel for the National Small Shipments Traffic Conference and the Health & Personal Care Distribution Conference.

DIRE EFFECTS

What's worse, any change to the classification can have dire effects.

For example, widgets shipped in boxes are classed at 70. But if the classification committee decides to raise the classification to 100, the rate charged to shippers rises by 30 percent, to $10 per 100 pounds from $7.

This means some shippers live and die based upon such decisions from the classification committee.

Three years ago, the committee voted to change the class of flashlights shipped in boxes without batteries. The proposal would have bumped the classes of shipments, where the minimum weight was 24,000 pounds, from less-than-truckload class 70 and truckload class 45 to LTL class 150 and truckload class 100.

This would have nearly doubled freight rates for the battery shipments. Howls of outrage from flashlight makers forced the committee to drop the proposal.

Basically, shippers hope their products don't show up on the classification docket because it generally means they're going to be paying more, said Joseph F.H. Cutrona, Nasstrac's executive director.

But they're usually the last to know if a change is in the wind.

The first time a shipper knows his freight rates might change is when products they make appear on the agenda of Classification Review Matters. No information is released as to how that subject got on the agenda or why, said William J. Tucker, president of Tucker & Co., Cherry Hill, N.J., a logistics management company.

Shippers might want to know the names of truckers assigned to the panel before the meeting date, perhaps to call them for clarification, but their identity is kept secret, he said.

Classification hearings are supposed to be conducted in sunshine, not in secret negotiations behind closed doors, said Bill Pugh, the traffic association's general counsel.

IMMUNITY DECISION DUE

For years, the classification committee operated with antitrust immunity, since many of its decisions ended up changing pricing. But under the ICC Termination Act of 1995, immunity expires at the end of this year.

The Surface Transportation Board, the regulatory agency that succeeded the Interstate Commerce Commission, is reviewing the classification committee's immunity, and a decision is expected by summer.

Nasstrac, the Health & Personal Care Distribution Conference and a host of brokers, shippers and attorneys, are asking the STB to not extend the committee's immunity for discussions on a range of non-rate-setting activities like packaging, loss and damage rules, or when the classification committee is clarifying or removing items in the classification.

Mr. Pugh said these issues are all interrelated.

''With the classification process, any change in packaging can affect a product's density, handling characteristics or fragility. Therefore, it would be related to the rating class a product ultimately gets. You just can't sort out one of them and leave the rest immunized. The whole process just wouldn't work.'' Although many shippers seem opposed to the antitrust immunity, some shipper groups, like the North Carolina Traffic League, back the committee, Mr. Pugh said.

'ANTITRUST GRAPESHOT'

But refusing an immunity extension is a way the STB can assure the deregulated trucking industry can be all it can be, Mr. Tucker said.

''An occasional whiff of antitrust grapeshot would be all it would take to serve notice on those large firms to mend their evil ways - to learn to respect hard-working but fair competition with their smaller brethren,'' he said.