ICC AGREES TO STUDY POLICY ON TRUCK RATES

ICC AGREES TO STUDY POLICY ON TRUCK RATES

The Interstate Commerce Commission agreed to a request from the nation's largest shippers' association to review its policies pertaining to negotiated, but unpublished, truck freight rates.

The National Industrial Transportation League, concerned about a flood of freight bill undercharge claims from bankrupt truck lines, had asked the agency to change its negotiated rate policy to make it easier for shippers to defend themselves against trucking companies in court proceedings.In its decision, the commission did not comment on the merit of the league's petition but said it has the authority to issue orders to terminate a controversy or remove uncertainty.

The ICC said it would use that authority to institute an investigation into the issue.

Negotiated rate disputes have been a persistent problem for shippers.

Typically, a trucking company and a shipper would negotiate a mutually agreeable rate for hauling freight. By law, a truck line is obligated to file its rate with the ICC. Under the so-called filed rate doctrine, only rates filed with the commission are considered legal.

Some carriers, however, failed to post the negotiated rates with the

commission. Subsequently, when the truck line went bankrupt, freight bill

collectors would audit the company's records and bill shippers for the difference between the unpublished, negotiated rate and the higher, filed rate.

Two years ago, the ICC said a negotiated rate was an equitable defense for a shipper against the filed rate doctrine.

The commission also said it would decide individual rate disputes between carriers and shippers, but only if the matter was first referred by a court.

In the intervening years, the agency has consistently denied carriers the right to collect undercharges if a good faith, negotiated rate had been agreed to between the two parties.

However, the league complained some that courts were misinterpreting the agency's findings and, subsequently, were refusing to refer the rate disputes to the commission. The courts would then rely on the filed rate doctrine and compel the shipper to pay the undercharge.

In its petition, the league asked the ICC to make it an unreasonable practice, and therefore a violation of the Interstate Commerce Act, for a truck line to haul freight at a negotiated, but unfiled, rate.

Making this determination, the league added, would prevent truck lines

from collecting the alleged undercharges.

The league said the agency's earlier order establishing negotiated rates as an equitable defense was helpful to shippers in rate disputes, but ultimately an inadequate remedy.

Some courts have viewed agency decisions in negotiated rate cases as non- binding and advisory. Toughening its negotiated rates policy, the league said, would make it clear that the agency's authority in these disputes is exclusive and binding upon the courts.

Both the league and some ICC commissioners have expressed concern that a flood of negotiated rate cases would overwhelm the commission.

A current bankruptcy proceeding involving McLean Trucking Co. has resulted in more than 1,700 undercharge claims being filed by freight bill collectors on behalf of the defunct motor carrier.

The league said its proposal to the commission would be a generic finding that a certain type of activity is unreasonable, but would not be operative until an actual court case is commenced.

The new policy, the league said, would make it easier for a court to refer the case to the ICC, where shippers likely would receive a favorable hearing.