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Secret Weapon in the Drawer? – The Motor Carrier Tariff

August 12, 2004

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Article Originally Published: August 2004

The information contained in this article is not intended to be legal advice. Readers should not act or rely on this information without consulting an attorney.

“Motor carrier tariffs? Weren’t they abolished?” “You don’t need to file them, so why bother?” “Would any judge pay any attention to one of those things?”

Well, not so fast. When Congress abolished the ICC, it only said that tariffs were not required to be filed. It did not say they were eliminated.

Congress in fact allowed carriers to rely on tariffs to limit their liability for freight damage, establish rates and rules, and avoid showing shippers their tariffs unless asked.

Any carrier that operates without a tariff is missing a great opportunity to protect itself in a dispute with a shipper.

TODAY’S TARIFFS – WHAT ARE THEY? Under 49 U.S.C. §13710, all motor carriers are required to have a written or electronic copy of the “rates, classifications, rules and practices” upon which any rate applicable to a shipment is based.

The standard bill of lading, which almost every shipper issues, also stipulates that the shipment is subject to the “rates, classifications and rules that have been established by the carrier”.

With the elimination of agency filing requirements, requirements for standard numbering, appearance and contents of tariffs have disappeared. The modern tariff usually is a series of paragraphs describing the rules that the carrier has decided to enforce on all of its shipments, coupled with a fall-back rate schedule.

WHO SEES A TARIFF? Whoever the carriers want to see it. Carriers are not required to make tariffs available to the public. Carrier are obligated to give shippers using their service a copy of the tariff on request. They are under no obligation, however, to even indicate that they have a tariff.

Many carriers choose to make their tariffs publicly available, often by putting them on their internet websites. The fact that the tariff is publicly available makes it more palatable for a judge to enforce. From a strictly legal standpoint, however, a tariff kept in a carrier’s desk drawer is just as enforceable.

CONTENT. The contents of a tariff will vary with the carrier. Specialized carriers have specialized tariff items. Almost all tariffs, however, have the same basic items in common:

  • Limitation of Liability. Federal law specifically allows carriers to limit their liability with tariff language. Carriers typically limit their liability to a specific dollar value per pound. Courts remain divided on whether carriers must keep a “full value” option available in their tariffs for a higher price.
  • High Value Shipments. Most tariffs also contain provisions requiring the shipper to state the value of the goods on the bill of lading and indicating that goods valued at higher than a stated amount will not be accepted for transportation.
  • Consequential Damages. Tariffs usually contain language stating that the carrier will not be liable for “incidental or consequential damages”. Such language protects carriers from liability for unexpected factors such as plant closing costs.
  • Payment Protection. Carrier tariffs often contain language which enlarges the carrier’s right to withhold delivery and states that freight may be held to satisfy all outstanding unpaid claims.
  • Late Payment Charges. Most carrier tariffs assess charges for late payment. LTL carriers often use ‘loss of discount’ provisions which offer service to customers at percentage “discounts” but then cancel the discounts if freight charges are not paid on time. ICC and Surface Transportation Board rules limit such provisions.
  • Detention. Particularly with changes in hours of service rules, tariffs also should have provisions which charge shippers for unnecessary detention of equipment after specified “free time.”