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Sept.5, 2016

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Q&A 68 THE JOURNAL OF COMMERCE SEPTEMBER 5.2016 By Colin Barrett Q: WE'RE A SHIPPER. I understand that there have been some changes proposed in the standard-form motor carrier bill of lading. I've received a lot of correspondence urging me to join in opposing those changes before the Surface Transpor- tation Board. I don't quite understand what's going on. First, do shippers even have the right to oppose changes in a bill of lading form? Second, why is it impor- tant? I mean, there's no legal obligation on anyone to use the standard form. We use our own B/L, and we plan to continue doing so, therefore, why do we care what some other form provides? Finally, what's so bad about the new form that I should care about fighting it? Can you clarify? A: TAKING YOUR QUESTIONS IN ORDER: Unlike in the past, the STB no longer has jurisdiction to approve or reject carrier tariffs as when they were protected under an STB- approved antitrust exemption. But it can investigate and deem them reasonable or unreasonable, which it's agreed to do in response to a campaign spearheaded by the pro- shipper Transportation & Logistics Council. The standard-form B/L is part of the National Motor Freight Classification, a tariff in which many major motor carriers participate. The board's decision thus will have considerable importance. One of the changes proposed is that, absent a shipper-carrier ag reement to the contrar y, all NMFC-participating carriers will haul only under standard-form B/L terms. Even if a shipper uses its own B/L, the standard-form terms will apply, and shippers, by agreeing to ship under tariff provisions, will be bound by those terms. The most significant B/L change has to do with carrier negligence as related to freight loss-and-damage claims, a topic dear to the hearts of the TLC and its membership. Here- tofore, it's been up to the carrier to prove itself free from negligence, where negligence is an issue in a claim (not always). The new B/L instead would place the legal burden on the shipper to prove the carrier was in fact negligent. Now, negligence mostly isn't an issue in transportation L&D claims. The law provides that, unlike those in other economic sectors (where companies are liable only for the consequences of their own neg - ligence), transportation carriers are liable for loss, damage or delay of goods in their custody in most instances even if they did nothing wrong and weren't negligent. But under both the old and new B/L forms, carriers accept liability only for their own negligence if the claim relates to "loss, damage or delay which results: when the prop- erty is stopped and held in transit upon request of the shipper, owner or part y entitled to make such request; or from faulty or impassible highway, or by lack of capacity of a highway, bridge or ferry; or from a defect or vice in the property." So the question is whether the ship- per has the burden of proving the carrier was negligent (the new requirement), or the carrier has to prove it wasn't (the old one). It's arguable that won't matter in the first case. Carriers are liable as carriers, meaning regardless of their negligence, only when they hold goods moving under ship - ping orders. There are cases saying that's not so if the goods have been stopped in transit, so until they're back in motion the carrier is liable only as a warehouseman, meaning only if the claimant proves them negligent. The new B/L therefore won't change that situation. What troubles the TLC and its allies is the change of proof require- ments in the other cases — if there's loss, damage or delay due to some kind of road, bridge or ferry problem or the innate characteristics of the freight itself. The previous default was that the carrier would be liable unless it produced evidence that it wasn't at fault. The new one holds that the carrier isn't liable unless the claimant can show that the car - rier was. It won't affect most claims — comparatively few involve such fac- tors, in my experience — but it'll make a big difference to those it does affect. There are many — including, of course, the carrier industry — who strongly believe the present no-fault standard of absolute carrier liabil- ity for L&D is an outmoded relic of the past that should be eliminated. The TLC, though, has always been a strong defender of the law as it exists, and has a history of resisting any diminution in that standard. The new B/L would clearly water it down, albeit only a little, which is why there's all this controversy. JOC 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, Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010. WATERING DOWN TERMS OF CARRIER LIABILITY What troubles the TLC and its allies is the change of proof requirements.

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