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AMTR is in full support of The Transportation & Logistic Council (TLC) and the National Shippers Strategic Transportation Council (NASSTRAC) efforts to address the unreasonable bill of lading changes as set forth in the Supplement 2 to the National Motor Freight Classification (NMFC) version NMF 100-AP, that became effective on August 13th. Included in this supplement were silent but drastic changes to the Uniform Straight Bill of Lading, Straight Bill of Lading–Short Form and the NMFC rules in Item 360 regarding bills of lading. These changes were made without notice and without a comment period for shippers. Please find below the most significant changes and the impact that shippers will incur:

1. NMF 100 Item 360-B Uniform Straight Bill of Lading Terms and Conditions Sec. 1 (b)

• THE CHANGE:
Previous version: “…The burden to prove freedom from negligence is on the carrier or the party in possession.
Effective in Sup 2: “…The burden to prove carrier negligence is on the shipper.
• THE EFFECTS:
This qualification is in regard to loss or damage due to negligence of the carrier. Previously, the carrier—or the party in possession—had to prove they were not negligent. Carriers are actually in possession of freight when shipping damage occurs. Now the burden of proof has shifted to the shippers. This becomes exceedingly difficult because the shipper did not possess the freight at the time the damage occurs. They are not knowledgeable about the movement of the shipment from origin to destination, and therefore are at an unreasonable disadvantage. This is in contradiction to the Carmack Amendment. In the Amendment, the procedure is to prove that the shipment was handed over to the carrier in good condition, but was received by the consignee in a measureable, damaged condition – not needing to provide that the carrier caused damage AND that it was through negligence.
COUNTER MOVES TO PROTECT SHIPPERS:
Shippers will have to be aware of this change and protect themselves by first becoming knowledgeable about the change in wording and how it will affect their business. Next will be the understanding of The Carmack Amendment and transportation law. With this combination, shippers can include contract terms that will protect the shipper from this reversal of practice.

2. NMF 100 Item 360-B Uniform Straight Bill of Lading Terms and Conditions Sec. 1 (b)

• THE CHANGE:
Previous version: “No carrier shall be liable for any loss or damage or for any delay caused by an Act of God, the public enemy, the authority of law or the act or default of shipper.”
Effective in Sup 2: “No carrier shall be liable for any loss or damage or for any delay caused by an Act of God, the public enemy, the authority of law, the act or default of the shipper, riots or strikes, or any related causes.”
• THE EFFECTS:
There were two additions to the list of conditions in this sentence. The first was that “riots or strikes” were added to the list of conditions. This is a new common law defense, and with new additions there will most likely be trial and error by litigation. This can become overwhelmingly costly and time consuming.
Another new addition is the phrase “or any related causes.” This is extremely vague in its meaning and application. Ambiguity in this sense could be harmful to shippers when trying to prove the carrier’s negligence. It is hard to prove a case on a clause that is vague.
COUNTER MOVES TO PROTECT SHIPPERS:
This will again be on the shipper to negotiate a well-defined and protective clause in their contracts with carriers. The process will not be as simple as just adding a sentence to the contract. It will have to be a compilation of conditions created from someone knowledgeable about the history of liability and familiar with current transportation law.

3. NMF 100 Item 360-B Uniform Straight Bill of Lading Terms and Conditions Sec. 2

• THE CHANGE:
Previous version: “…carrier is not bound to transport a shipment by a particular schedule or in time for a particular market, but is responsible to transport with reasonable dispatch.
Effective in Sup. 2: “…carrier is not bound to transport a shipment by a particular schedule or in time for a particular market, but will transport the shipment in the regular course of its providing transportation services.
• THE EFFECTS:
“Reasonable dispatch” has been the standard for a century. It has gone from a standard that could be applied across all carriers to a more carrier specific time frame. This is holding shippers captive to the carrier’s chosen standards. We already see carriers offering different transit times for different prices. Some get a larger discount for taking the service that will allow the carrier to possibly hold back a shipment so that they may better use the capacity of their trailers. Then you also have expedited and guaranteed shipments that come with added costs. This leads shippers to start questioning whether this could become a big enough issue that they will be forced to pay more for services to ensure their shipments are being delivered in an acceptable time frame.
COUNTER MOVES TO PROTECT SHIPPERS:
Shippers will need to be vigilant in being involved in legislation regarding the Hours-of-Service rules. The more regulations put on carriers, the more likely that delivery time frames will become longer. Being aware and involved with the open comments period regarding these changes will also be important for shippers. The more vague these stipulations become, the more room there is for shipping problems to occur.

4. NMF 100 Item 360-B Uniform Straight Bill of Lading Terms and Conditions Sec. 3 (b)

• THE CHANGE:
Previous version: “…except that claims for failure to make delivery must be filed within nine months after a reasonable time for delivery has elapsed.”
Effective in Sup. 2: “Claims for loss must be filed with the carrier not more than nine (9) months from the date of the bill of lading.
• THE EFFECTS:
There were a few wording changes that seemed less significant, i.e.: “failure to deliver” was changed to “loss.” However, there was a significant change made regarding the timeline for filing claims for loss. Previously, it was nine months from a reasonable delivery time frame; now it is “nine months from the date of the bill of lading.” So shippers should be asking which bill of lading date is to be used. Is it the date the shipment was requested? Is it the date the bill of lading was created? Is it the date when the bill of lading was printed? Or is the bill of lading date the pickup date? What if there is a scheduled pickup date listed but the shipment was actually picked up later than that date? Again, ambiguity creates problems in these stipulations. Overall, whichever date is eventually determined to represent the bill of lading date, the time frame for filing a claim for loss has been shortened. No longer does the clock start after the loss of freight has become a possibility because it has not been delivered in a reasonable amount of time; now it starts somewhere on the front end—before loss is even a possibility.

WHO WILL THIS AFFECT?
Virtually all major motor carriers in the US—less-than-truckload and truckload—are participants to the NMFC, and freight charges based on rates dependent on classifications provided in the NMFC are required to use the Uniform Straight Bill of lading. Those who do not use the classification but are a participating carrier are also subject to such rules [NMF 100 Item 362-B]. Therefore, the impact of the changes will impact most shippers and shipments [see NMF 100 Item 360-B Sec. 1 (a) and (b)]. If shippers so choose to use their own bill of lading, per NMF 100 Item 360-B Sec. 1(h), they are still bound to all of the provisions and conditions of the Uniform Straight Bill of Lading.

SINCE THE SUPPLEMENT BECAME EFFECTIVE:
The Transportation & Logistics Council (TLC) filed a petition with the Surface Transportation Board (STB) for suspension and investigation of the Supplement on July 29th. Find that full document here: http://www.tlcouncil.org/sites/default/files/tlc_petition_7-29-16_docket_35008_0.pdf. The National Shippers Strategic Transportation Council (NASSTRAC) then filed a petition in support of TLC dated August 1st. Find the full document here: http://www.tlcouncil.org/sites/default/files/nasstrac_8-1-16_dkt_35008_0.pdf. The STB released their decision on August 12th. The STB denied the request and stated parties should file supplemental pleadings by September 12th. There is an open comments period and shippers are urged to comment in support of Docket Number IMA 35008. You can send your comments to:

Chief, Section of Administration
Office of Proceedings
Surface Transportation Board
395 E. Street, SW
Washington, DC 20423

12 Aug 2016

Captive Shippers Can Speak Freely

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On July 27, 2016, the Surface Transportation Board (STB) issued a decision on the petition to revise competitive switching rules and opened a comment period through September 26, 2016. The board has also invited stakeholders to request ex parte meetings with board members to be conducted between October 25 and November 14.

Currently, reciprocal switching can occur as a voluntary arrangement between carriers or may be ordered by the Board. However, the current regulations have proven to be so restrictive that few cases have even been brought before the board. If you are a captive shipper, now is the time to act. The Board has waived the prohibition against ex parte meetings out of concern for all affected parties and seeks input before making the final determination regarding the issue.

In May, the Commercial Vehicle Safety Alliance (CVSA) completed its annual unannounced brake check day that lead to removing 12.4% of trucks investigated out of service. This is all part of a North America program called Operation Airbrake, which is dedicated to brake system safety through carrier compliance and awareness.

The random inspection consisted of 6,128 vehicles throughout 31 U.S. states and Canadian territories and provinces. Beyond the 12.4% having brake violations, 13.9% were removed from service for other violations found during these inspections. Education, awareness, compliance of equipment and other safety regulations are necessary for safety’s sake. Don’t get caught having to pay a much higher rate to another carrier because your regular carrier has been put out of service due to violations.

12 Aug 2016

Which Price is Right?

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Rail vs. Private Cars

The Official Railway Equipment Register, published quarterly, provides all data from the UMLER system in tariff format as mandated by the government. The two main sections contain the car specifications of railroad owned reporting marks in the front and privately owned reporting marks in the back. The reporting marks should be able to tell you who owns the car and therefore what rate to pay, right? Not necessarily. Fleet management has become more complex over the years due to railroads leasing from private companies and private companies leasing railroad-owned equipment. So when your pricing contains a rail and a private car rate, choosing correctly can get tricky. Owners of equipment should update any lease arrangement through Railinc, which is one way to verify the status of the car and is also what the railroads use to create your invoice. There are also different types of leases which may or may not account for car hire and other factors. Sound complicated? If you lease equipment regularly, you might benefit from having your freight charges verified by an outside source. Let AMTR show you where unnecessary dollars might be slipping out the door.

12 Aug 2016

Which Rate is Right?

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Contract Rates vs. Quotes

A common carrier’s rules tariff usually specifies the hierarchy of rate applications when it comes to tariff, contract and quote pricing. However, this has not always been–and is still not always–the standard. So for shippers, this should beg the question of which one should apply.

Customer-specific pricing will come in the form of tariff pricing or contract pricing. For a better understanding of the difference between the two, please visit amtr.com/glossary and review contracts and truck tariffs terms. Customer-specific pricing can be customized to fit the shipper’s and carrier’s needs. Larger discounts may be given for specific locations and accessorial exceptions may be granted for services the carrier may perform on a regular basis.

The common practice for carriers currently is to have the quoted amount supersede any customer-specific pricing. Most commonly, quotes for special services such as expedited, guaranteed delivery and shipments requiring other special services will take precedence. You will have to pay for the service level you require. Once you look further into a carrier’s rules tariff, however, you will find that common quotes obtained online or through customer service via telephone are often just estimates of charges, superseded by client-specific pricing.

Many companies pay thousands of dollars more than they should when quotes are applied instead of customer-specific pricing. At AMTR, our expert auditors will save you money on your freight charges by discerning between the application rules of quotes and client-specific pricing.

In business circles, the conversations about “data” seem to be all the rage these days. Whether the topic is big data, data analytics or data mining, it is easy to get the impression that more data is better. With the right software tools, meaning can be derived from any data easily and quickly. Voila! Undoubtedly, information technology has allowed great advances in data collection and analysis, but to use some ideas from the knowledge management discipline: data without relevance or purpose is not information, and information without context and meaning is not knowledge. So where do context and meaning come from, then, to allow knowledge? It is simple–they come from humans. Data without human knowledge to make sense of it is just data. Even powerful data analysis tools and algorithms need human care and feeding in addition to thoughtful interpretation of results.

At AMTR, every audit begins with an examination of client shipping-related data. This data comes from many different sources, including client TMS systems, payment files and invoices. At first blush, the data itself often looks good, and in many cases, it has even made it through the “tolerances” set by precursor systems. However, when our auditors further examine the data using their knowledge of transportation laws, client shipping patterns, common information system errors and past auditing experiences, the data “reveals” knowledge that would not have been obvious to the casual observer, hence the “essence” of our Smart Auditing® approach. David McCandless, a self-labeled data journalist and information designer, has been quoted as asking, “Data is the new oil? No: data is the new soil.” At AMTR, we agree with this sentiment as we know data alone is not the new “holy grail,” yet it allows fertile ground for those who can understand and exploit its potential using human interpretation and application.


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