Starting the Clock for Undercharge Bills

Starting the Clock for Undercharge Bills

Copyright 2008, Traffic World, Inc.

Q:

In the Nov. 19, 2007, issue you responded to a carrier regarding the time limit for overcharge claims on balance due bills issued by carriers on bills the shipper or their pay agent paid short per the pricing in place ("Setting Time Limits for Claims").

Your answer seems to conflict with what you said in response to my own inquiry in the April 21, 2003, issue, when you said that the payer has satisfied the 180-day time limit for "contesting" a carrier''s invoice by paying the original freight bill short per the contract/tariff pricing in place. You went on to say that a reason should be given with the short payment, but I don''t believe that is an issue since the statute, 49 U.S.C. ? 13710(a)(3)(B), does not state that one is required by the shipper when "contesting."

On Nov. 19 you told the carrier that "your balance due bills were ''subsequent bills'' within the meaning of the ... language [of the statute and the relevant contract that parallels the statute]. Thus, under the law you set up a new trigger point for the 180-day time limit when you presented those balance dues, though only to the extent of what the balance dues added to the bottom line."

I agree, if by "bottom line" you meant the correct charges that should have been applied. But then you went on to say that if the claims "are based on an argument that the short payment was correct, the [balance due] doesn''t extend the time limit; that remains 180 days from the original bills in which you first demanded the charges that were short paid."

This appears to conflict with what you wrote in 2003.

In particular, your final sentence that "neither do your balance dues extend the time for review of originally billed charges" has the effect of creating possible confusion.

Many carriers will issue a balance due long after the original bill (usually due to the customer rejecting earlier balance due billings), sometimes close to or even after the 180-day limit. There is no way we could contest a balance due payment made in error on these if we have to go by the original bill date.

Lastly, has our customer not covered themselves by stating that the time for contesting bills runs "from the date of receipt of the relevant invoice," which they interpret to mean receipt of the particular invoice issued for payment, whether that is an original, balance due or whatever?

A:

There''s no confusion, and no conflict. You''re going all around Robin Hood''s barn to get me to say that short payment alone is enough to "contest" a freight bill, and I won''t do it.

Nor, despite what you say, did I do that in 2003. What I said was that short-payment must be accompanied by something to indicate it wasn''t just a clerical error - "even a marked-up copy of the freight bill would suffice," I said - to "put the carrier on notice that the shipper disputed the bill."

I also wrote that anyone who simply paid a bill short without the slightest hint of explanation had to be "arrogant beyond all reason," if you''ll recall.

While I concede that this is only my own view - I''ve seen no judicial decisions on the issue - I''ll stand by it until and unless a pretty high-level court rules otherwise. After all, in other fields the original invoice always triggers the collection time limit; balance dues are nothing more than repeated efforts to collect the same money, and to treat them as brand-new bills would extend the time indefinitely until the creditor - the carrier here - simply gave up.

You''re dead on as to one point. You say that, if disputes drag on long enough, my view would mean that an erroneous payment of a disputed balance due would be beyond the time limit for claiming a refund.

Yup, it sure would. Which is why one audits balance dues as well as originals; you''re an auditor, you know that.

In fact, you acknowledge that you''re the auditor of the original (2007) question, who tried to claim refund of a mistaken balance due payment long after the original bill had been short-paid, and was told he was too late according to the date of the original bill.

I sympathize in one respect. In its question to me the carrier admitted both the original bill and its subsequent (paid) balance due were in error according to agreed rates, and I think it should have paid the money back as a matter of equity.

But was it legally obliged to do so? I don''t think so, for the same reasons I stated in both columns to which you refer. I mean, if you''d told it up front why you were short-paying, couldn''t this whole problem have been avoided?

So next time you short-pay on behalf of a client, let the carrier know how come. It''s simple enough to simply say, "you billed X using this rate, we''re paying Y because the agreed rate was this lower amount." Then keep a copy in your file against any balance dues that may be later presented, to avoid the kind of erroneous payment that you made.

Life can be simple if you make it simple. Do that, and stay out of this kind of dispute.



-- 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. Later compilations by request.